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The Airbnb Business Model

705 Words3 Pages

Intro
As mature markets are becoming saturated, new models of collaborative consumption are surging as alternatives. The sharing economy refers to businesses that are built on the premise of shared resources, like a car or a house, for a certain period of time and a fraction of the price, replacing ownership with access. And even if the idea behind the sharing economy isn’t necessarily new (companies like Napster, eBay and Craigslist were created on the premise of peer to peer connections), Uber and Airbnb are regarded as the poster children and pioneers of a business model that is robust, scalable and profitable. Born out of the idea of helping consumers during the Great Recession, they offered new income streams for people who needed an extra …show more content…

This is a long established industry that now perceives Airbnb as a challenger that is replacing them but it is very little acknowledged that this new model is creating and shaping new markets by allowing people to use and monetize spaces that otherwise would not be used.

History & Business Model
Airbnb was founded in San Francisco, USA in 2008 and in just a few years it has been able to establish itself as a trusted community marketplace built on a sharing economy business model that allows people to discover and book unique accommodations around the world while giving property owners and easy and effective way to monetize their extra space for one night or even months. It is all done through an online platform that is available and optimized for computers, smartphones and …show more content…

The listings are so varied that include not only apartments and houses but also vans, villas, windmills and even castles which makes the offering on the platform robust with a wide range of options for all kinds of traveling budgets.
The property owners set the price or accommodation fees that are payable by the guest and the host is responsible to include in that unique price any cleaning or maintenance that they consider as well as taxes that the host determines he or she has to collect. Airbnb then collects a fee from both the guest (6-12%) and the host (around 3%) that is calculated as a percentage of the accommodation price in every transaction, including the corresponding taxes. Airbnb charges the guest once the reservation is confirmed and releases the money to the host (minus the respective fee) 24 hours after the guest checks in.
Airbnb uses live reviews so renters can evaluate the quality if the properties and the service they received from the host, such as cleanliness and overall

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