Airbnb's Business Model

In: Business and Management

Submitted By pseudonism
Words 524
Pages 3
Concept
Airbnb is an online marketplace connecting travelers with local hosts. On one side the platform enables people to list their available space and earn extra income in the form of rent. On the other, Airbnb enables travelers to book unique home stays from local hosts, saving them money and giving them a chance to interact with locals. Catering to the on-demand travel industry, Airbnb is present in over 190 countries across the world.
Value proposition * Enables owners to list their space on the platform and earn rental money. * Airbnb provides insurance to listed properties. * Gives cheap options to travellers to stay with local hosts. * Facilitates the process of booking living space for travellers. * Rating and review system for hosts and guests.

Revenue model

Airbnb offers free listings to property owners and let’s travellers browse the listed spaces and select the one which best suits their needs on the platform. The business model of Airbnb is such that the booking and monetary transactions are done on Airbnb’s platform. This is from where the company earns its share of revenue from 2 different sources which have been explained below: * Commission from Property Owners (Hosts)
Airbnb charges flat 10% commission from hosts upon every booking done through the platform. * Transaction fee from Travellers (Guests)
Airbnb charges 3% of the booking amount as transaction charges from travellers upon every confirmed booking.
Market opportunity

Competition: Competitive environment & advantage
Advantage:
Like any marketplace, Airbnb's biggest competitive advantage is its network effect.

The larger the number of hosts who list on Airbnb, the more guests it will get - and the larger the number of guests booking through Airbnb, the more hosts it will get.

While the supply (listings by hosts) can be built by a…...

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