Airbnb’s Business Model & Revenue Source

Since its inception in 2008, Airbnb’s popularity as a hotel substitute has skyrocketed. This online marketplace allows travellers to find a home-like environment in a foreign city and hosts to exchange their home for rent.

There are currently 2.9 million hosts and over seven million listings on Airbnb in over 200 countries. The site has over 150 million users, and every second, six renters check into an Airbnb-listed property.

Airbnb’s one-of-a-kind service has propelled the company to success in just a few years. Moving on, we’ll go over the Airbnb business model and revenue model in depth.

What is the business model of Airbnb?

The Airbnb business model, like Uber and OYO, is an aggregator business model. They lack the business model of hotels like Hilton and Marriott. Airbnb’s business model, like Grubhub’s, is supported by an online platform that connects each component of the model. The individuals and hosts who are key components in the Airbnb process are the company’s most valuable assets. Airbnb serves as a marketplace for both hosts and travellers. Hosts can list their property for rent, and if someone wants to stay there, the hosts will receive rent in exchange. People who stay at Airbnb have a completely different experience because they are staying close to the locals.

Airbnb Revenue Model

Airbnb’s revenue model is based on a fee charged to both hosts and travellers, which is similar to Postmates’ revenue model. Postmates also makes money through fees. Airbnb’s revenue model is based on listings and stays. Airbnb makes money by providing a platform where these listings and bookings can be made. Airbnb generates revenue from two major sources:

Airbnb takes 10% of the payment amount as commission from hosts whenever someone chooses a host’s property and makes a payment. This is a component of the Airbnb fee structure.

Travelers’ transaction fee: When they pay for their stays, they are charged a 3% transaction fee. This amount is added to Airbnb’s revenue.

Airbnb Cost Structure

There are three major costs involved in the Airbnb cost structure. They are as follows:

Salary to the permanent employees: : Anyone working in Airbnb’s physical office is entitled to a monthly salary as well as other benefits.

Technological set up and running cost:The cost of setting up and running the technology to run the business, such as the website, servers, and so on, will be borne by Airbnb. They must also pay operating expenses such as electric bills and other small rents.

Payment to freelance photographers: Airbnb has hired freelance photographers to capture the highest-quality images for its website. Airbnb must pay the photographers the agreed-upon fee for this service.

The Future of Airbnb

Airbnb was never a billion-dollar company, but it has come a long way since AirBnB. Airbnb’s business model and website have been constantly changed and modified over the years. Previously, the website was the only way to make reservations, but they have now expanded to include apps.

With the increased use of apps, Mobile Development Companies in Poland have begun to receive an increasing number of projects from businesses. And businesses are shifting to mobile apps because the cost of developing them is no longer prohibitively expensive.