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    What is Airbnb Model and how it works?

    Airbnb was started in 2008 in the month of August. The main objective of Airbnb is providing travelers with homestays during their travels. A simple idea at its roots, Airbnb is available across over 190 countries throughout the world today. It is a $31 billion business today and operates in over 34000 cities.

    Business Model
    Airbnb has a segmented business model comprising of hosts, guests and photographers of which both the hosts and travelers form its two separate customer base. Hosts are owners of the property which can be rented out to travelers as a homestay. The reason that these “hosts” flock towards Airbnb is the wonderful value proposition that Airbnb provides. The hosts not only earn money by renting out their place but also get their place wonderfully photographed by professionals to be displayed on the Airbnb website. Hosts also get insurance for their place from Airbnb once they sign up to them. All these goodies made Airbnb a very appreciable platform for people to rent out their extra space and serve as hosts to dreary travelers.

    On the other hand, guests too, get value for their money. Getting to stay at a homestay during travels has a personal touch to it. A guest gets to experience life at a new place first hand, at close quarters. That is the experience of a lifetime. Homestays also cost much less than hotels oftentimes, thus not being too harsh a pocket pinch upon the traveler’s pockets. Airbnb generates its revenue through both the hosts and guests. The hosts pay a flat 10% commission for every customer wherein Airbnb charges a 3% convenience charge off the guests. This inter-relationship has led to Airbnb’s swift and smooth growth over the years.

    Success Timeline of Airbnb


    How Airbnb Works?
    Airbnb business model is very efficient and has passed on as quite effective. Starting from procuring a property from a host to finally renting it out to a needy traveler, Airbnb works in 5 steps to achieve its goals:

    Anybody who wishes to become a host should come up to the Airbnb page and upload their details of a property. They are instructed to fill in other details also, such as time of checking in or out, amenities provided and so on.
    Once a person signs up to act as a host, Airbnb sends in a professional photographer to their location. The photographer captures the place and property that is to be rented out is astounding beauty and high definition to publish on the Airbnb page. It is noticed that places that have good quality, HD pictures are more likely to attract travelers.
    Once a traveler sets foot in a city, he/she searches for likely places to stay and looks through all available options as per their personal needs.
    Once a traveler has set their eyes on a place, they can book it through the Airbnb portal. Upon booking, they are asked to make a payment as stated by the host along with certain additional charges as transaction charges.
    Finally, when the host approves, the traveler gets a nice homestay to enjoy his travels. The host is paid the amount by Airbnb after they deduct their commission.
    Though Airbnb has gone on to become a billion-dollar business it is still growing and expanding its horizon. Having setup homestays in over 190 countries Airbnb is trying to set up more homestay options in the remotest corners of the world. With an increasing number of people choosing homestays over the traditional hotel while they are traveling, Airbnb’s powerful business model is becoming all the stronger.

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