Introduction

Airbnb serves as a platform that connects individuals seeking accommodation with

those looking to rent out their extra space. It enables users to explore a wide array of
rental properties globally. Despite being the largest provider of accommodations
worldwide, Airbnb doesn't own any properties itself. This unique business model
underscores its success. It offers unparalleled convenience for both renters and
property owners, allowing renters to find suitable accommodations near their
desired locations while enabling property owners to generate additional income by
renting out their available space.

The remarkable success of Airbnb has propelled it to become one of the most
valuable companies globally, boasting a staggering valuation of $70.39 billion as of
November 11, 2022. Its continuous expansion and innovation have opened up a new
market for individuals to monetize their spare space. Moreover, Airbnb stays
relevant by introducing enticing programs and perks to attract more hosts to list
their properties on its platform.

The Airbnb business case exemplifies how a company can thrive by identifying and
addressing unmet needs in the market. Through its innovative approach, Airbnb has
carved out a niche for itself, transforming into one of the world's most valuable
enterprises.

What is Airbnb & Its Brief History

Airbnb started in 2008 when three friends, Joe Gebbia, Brian Chesky, and Nate
Blecharczky, faced financial struggles. They realized they could rent out space in
their apartment for a design conference in San Francisco. They created a website
called airbedandbreakfast.com and offered airbeds and breakfast to guests. This idea
began with just three guests paying $80 per night.

Later, they expanded their idea to accommodate travelers attending conferences.

They renamed the website Airbed and Conferences United States. However, they
soon realized their idea could apply to anyone needing accommodation beyond
conferences.
In 2009, they shifted their focus from airbeds and breakfast to just breakfast, selling
themed cereal named Obama 'O's and Cap'n McCain during the 2008 US elections.
They used the profits from the cereal to fund Airbnb.

They joined Y Combinator, a startup funding company, and changed their name to
Airbnb in 2009. With an investment from Sequoia Capital, they grew rapidly,
meeting hosts personally to build trust and a sense of community.

By 2014, Airbnb was recognized as the company of the year, having disrupted the
travel industry and built a strong brand. They celebrated their one millionth listing in
December 2014.

By 2016, Airbnb had tripled its listings and served over 150 million guests worldwide.
From starting with just three airbeds in a living room, Airbnb is now present in over
191 countries and 65,000 cities, offering a unique travel experience to users
worldwide.

Hosts

For hosts, getting started on Airbnb is straightforward. They need to create a profile
and describe their listing or services, adding photos and setting a price. Airbnb even
offers a free professional photography service, which has been shown to increase
bookings.

Hosts also need to manage availability and house rules for their listing. When a guest
books, hosts receive a confirmation message and can communicate with guests
online or through the app to plan their arrival. Hosts can choose to confirm bookings
manually within 24 hours if they prefer.

To give hosts peace of mind, Airbnb offers a $1 million guarantee for accidental
damages and Host Protection Insurance to cover liabilities if guests are injured or
cause property damage. There's also a 24/7 Trust and Safety team available for
support at no extra cost. These measures ensure hosts feel secure when renting out
their spaces.

Guests

Guests, similar to hosts, must also provide relevant information. They must have a
complete
profile with personal information and preferentially a profile photo. A complete
description
facilitates the process between guests and hosts. The more information a host can
retrieve, the
easier it will be to create a trust relationship with the guest.
To find the ideal experience, guests must select the location and the dates. If
searching for
accommodation, guests must choose between renting an entire home, a private room
or a shared
room. Guests also have the opportunity of selecting different filters to facilitate their
research.

Airbnb in 2016

Beyond just offering cool places to stay, Airbnb is always working on making its
business better. They've started focusing on another group of customers: business
travellers. Plus, they're coming up with new services to give their guests an awesome
all-around travel experience.

Business Travel

With over two million listings in nearly 191 countries, Airbnb is known for its unique
places to stay. But they've gone beyond that by offering a service for business travel.
This lets companies book and handle accommodations for their employees.

To qualify for this business travel service, both hosts and places to stay are checked
against certain standards. For instance, hosts need to have responded to 90% of
booking requests within a day and have a five-star rating for cleanliness and
accuracy. Places to stay must have amenities like self-check-in, smoke and carbon
monoxide detectors, and internet access. Listings are regularly reviewed, and they
might lose their business travel status if they don't meet all the requirements.

According to Skift, as of July 2016, about 10% of all Airbnb bookings were for
business travel.

Airbnb Experiences

Airbnb is making its accommodation service even better by introducing something

new called Airbnb Experiences. Now, hosts can offer guests cool local activities along
with a place to stay. These experiences could be workshops, tours, or other fun stuff
organised by locals.

Hosts who offer these experiences have to pay a fee, but if it's organised by a non-
profit, Airbnb doesn't charge anything, so all the money goes to the non-profit.

According to Brian Chesky, Airbnb's CEO, they've started this in 12 cities and plan to
expand to 50 cities by 2017.

Airbnb Places

Along with offering their places to stay, Airbnb hosts can suggest cool spots for their
guests to check out using guidebooks. These guidebooks are like personal
recommendations from the hosts, giving guests insider tips to enhance their stay.
Guests can also find free audio-guided tours called Audio Walks in these guidebooks,
thanks to a partnership with Detour.

By checking out these guidebooks, guests can skip the touristy places and explore
hidden gems, making them feel like they're living more like locals during their visit.
Airbnb business model

Airbnb works like an aggregator, which is a type of business model where the
company gathers information about different providers offering a specific product or
service. Then, Airbnb partners with these providers and sells their services under its
own brand.

Since Airbnb acts as a brand, it needs to ensure that the services provided by its
partners maintain consistent quality and pricing. This is achieved by entering into
contracts with these partners. Think of it as a business model where you earn money
by connecting customers with service providers, without needing to own any
inventory yourself.

Unlike the traditional model where you needed to own property like hotels to start
booking, Airbnb has changed the game by linking people who need space with those
who have it. This has fueled its rapid growth.

Homeowners with extra space can list their rooms on the website to earn extra
income. What sets Airbnb apart is that it sells not just space but an experience. Many
travellers prefer this cozy, home-like feeling when exploring new places, and it's
often more budget-friendly than hotels.

Airbnb also offers personal profiles and a review system, helping travellers choose
hosts and accommodations wisely. This builds trust within the community.

Apart from travellers and hosts, Airbnb also involves a network of freelance
photographers worldwide. They take high-quality photos of properties, which
increase visibility and attract more guests. Airbnb directly pays these photographers
for their services.
Airbnb Distribution Strategy

Airbnb has revolutionised how people find accommodation online, becoming the
world's largest experience host. They keep costs low by doing most of the work in-
house, helping hosts build their brand so guests can easily find them again. Let's see
how their distribution strategy has evolved:

- In 2008, they started with Bed and Breakfast services in the US, later becoming
Airbnb.
- By 2011, they expanded globally, opening offices in London and Hamburg to reach
more hosts.
- They continued expanding, with offices in Paris, Milan, Barcelona, Moscow, Sao
Paulo, and Copenhagen by 2012.
- In Australia, they saw rapid growth potential, opening an office in Sydney.
- Partnering with home-cleansing services in 2014 boosted listings and ensured well-
maintained homes.
- In 2015, they introduced the "Business Travel Ready" badge, attracting big
companies.
- In 2018, Airbnb Plus offered verified homes with added amenities, catering to
luxury travellers.
- Partnering with SiteMinder allowed listing hotels and accommodations.
- Lower commissions for boutique hotels strengthened their distribution channel.
- They have many software partners to enhance user experience and are available in
62 languages.
- Acquisitions helped expand their network and improve listing quality.
- Now, they list various accommodations, from homes to boutique hotels, totaling
over 5.6 million listings and serving over 800 million guests worldwide by 2020.
Marketing Strategy of Airbnb

Social Media Marketing

Airbnb is present on popular social media platforms like Instagram, Facebook, and
Twitter. By August 2023, their Facebook page had gathered an impressive 16 million
likes. On Instagram, they have 5.4 million followers, while their YouTube channel
has 636k subscribers. Additionally, Airbnb has amassed a following of 880.5k on
Twitter.

Let’s now analyse how their posts are:

● Airbnb uses its social media platforms to tell stories and inspire its audience.
They share travellers' experiences, along with photos, tips, and
recommendations for trip planning and finding accommodations. By
leveraging user-generated content and posts from customers, Airbnb
effectively connects with and engages its target audience through its
marketing efforts.

● Airbnb raises awareness about social issues and seeks support through its
non-profit branch, Airbnb.org.
● Airbnb has teamed up with MotoGP champion Marc Marquez to offer fans a
unique opportunity to spend a night in his squad's motorhome during the
Catalan Grand Prix. To spread the word about this exciting experience, Airbnb
is using storytelling and sharing behind-the-scenes content. They're posting
photos and videos of the motorhome and the race track, giving potential
guests a sneak peek of what they can enjoy if they decide to book this special
experience.
Experiential marketing X Brand collaboration

Experiential marketing gets customers involved with a brand by giving them

memorable and emotionally engaging experiences.

They really amp it up with their partnerships with movies and shows. Remember the
Barbie house they made to promote the movie? And the house of Monica, the main
character from Brazil's 'Monica and Friends'?

Before the release of the "Barbie" film by filmmaker Greta Gerwig, Airbnb offered
tourists a chance to stay at Barbie's Malibu DreamHouse. They promoted it through
Instagram and interactive social media content, asking people about their
experiences. The tickets were free, and Airbnb got a lot of attention from this
campaign.

This collaboration benefits both brands by promoting them to a wider audience.

Content Marketing Strategy of Airbnb

Airbnb's website demonstrates effective content marketing for a service-based

business.

Rather than simply selling their services, they highlight and sell the unique
experiences customers have had with Airbnb. They do this through blogs and video
content, showcasing the diverse and memorable experiences available through their
platform.

Airbnb India

Airbnb has high hopes for the Indian market, with its co-founder stating that
Millennials will be the main drivers of growth in the country. They're active in many
tourist hotspots like Goa, Delhi, Mumbai, and Rishikesh. Recently, they even
invested around $200 million in Oyo Rooms. More than one million Indians have
travelled using Airbnb globally.

In India, Airbnb has over 30,000 listings, which is a 115% increase from the previous
year. The number of nights booked on Airbnb in India has nearly doubled since 2016.
Additionally, there has been over 100% year-on-year growth in inbound guests from
around the world between 2017 and 2018.
Airbnb statistics

Airbnb has 31 offices worldwide and has hosted around 400 million guests since its
inception. With over 150 million users and more than 5 million listings globally, it's a
popular choice for travellers, especially millennials who make up about 60% of all
guests.

The platform offers million-dollar insurance coverage for hosts and has 1.9 million
listings available at any given time. With 1000-5000 employees, Airbnb is constantly
improving its product through acquisitions and has raised about $4.4 billion in
funding.

Despite spending $23.5 million on advertising in the U.S., the cost of renting an
average home on Airbnb is often cheaper than a single hotel room. Moreover, the
company has reported profits of around $93 million in both 2017 and 2018, showing
its financial success.

How Airbnb Works?

Airbnb serves as a bridge between travellers and local hosts. By offering a spare room
in your home on Airbnb, you can generate income through bookings. This
arrangement benefits both travellers, who can enjoy affordable lodging with a
homely touch, and hosts, who earn income by providing accommodation.
Additionally, hosts have the option to offer extra services such as breakfast, guided
tours, or a pet-friendly environment, with the freedom to set their own rates for these
offerings.

The platform's rating and review system fosters trust between hosts and travellers,
often resulting in long-term connections between them based on positive
experiences.

Airbnb vs Uber vs Oyo Rooms

Airbnb, Uber, and Oyo Rooms all operate on the aggregator model, but each has
distinct approaches and focuses. Oyo Rooms has notably transitioned to managing
entire buildings independently and has expanded into co-living and co-working
spaces.

Uber simplifies travel by acting as a mediator between drivers and riders, ensuring a
consistent level of service. However, unlike Airbnb, where travellers choose
accommodations based on discoverability and reviews, Uber assigns drivers without
user choice and offers less detailed reviews.

While Uber suspends users with low ratings, it mainly compensates drivers through
fixed commissions per ride. Oyo Rooms emphasises quality control and
standardisation, with bookings made under the brand rather than individual hotels.
Recently, Oyo has taken over full property leases, allowing day-to-day operations
under its brand.

Unlike Oyo, Airbnb lacks direct control over the quality of accommodations and
primarily earns through commissions.

Conclusion

Airbnb has emerged as a standout success story in the past decade, revolutionising
the way people travel and disrupting the hotel industry. Its unique platform allows
individuals to rent out their homes, offering travellers a more affordable and
personalised lodging experience. Leveraging technology, Airbnb has rapidly
expanded its reach and attracted a large user base through innovative marketing
strategies.

The company's future appears promising, especially with its recent foray into the
business travel segment, positioning itself as a key player in online travel booking.
Airbnb's disruptive business model and technological advancements have already
reshaped the traditional hotel landscape, and this trend is expected to continue.

While Airbnb faces challenges from the conventional hotel sector as it expands into
new markets, its ability to innovate and curate distinctive guest experiences will
likely sustain its influence in the travel industry for years to come.