Airbnb - Success Story of a Hospitality Company Valued at $100 Billion

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Have you ever felt anxious about accommodation when you’re planning on a trip out of the city or country? The uncertainty of stay, their hospitality, and their safety often give us the creeps. Leaving the comforts of our home alone causes massive distress, which is further coupled with the apprehension of staying outside whenever we decide to stay outside. Therefore, staying in a place that is decent enough and secure is something that most of us look up to.

What if we could find a place that makes us feel at home when we are on a vacation or a business trip? Wouldn’t that be great?

Modern technological advancements have made that possible and simple to find suitable accommodations for any kind of trip we make with the emergence of dependable lodging companies, and one of the most popular of such companies is Airbnb.

Right from choosing the quarters to offering support around the clock until we part, it brings all sorts of convenient measures right into our hands. Airbnb is one such wonderful platform that serves as an online marketplace to help people find accommodation during their trip as per their needs. Airbnb serves over 220 countries and regions across the world today.

You have certainly heard of Airbnb already, and thus if you are wondering to know more about this brand, then here we bring you all about Airbnb, which includes "when Airbnb started?", Airbnb founders and creators, Airbnb company history, Airbnb success stories, Airbnb parent company, funding and valuation, growth, revenue, competitors, future plans and more.  

Airbnb - Company Highlights

Airbnb - About
Airbnb - Industry
Airbnb - Founders and Team
Airbnb - Startup Story
Airbnb - Mission and Vision
Airbnb - Name and Logo
Airbnb - Business and Revenue Model
Airbnb - Challenges Faced
Airbnb - Funding
Airbnb - Acquisitions
Airbnb - Growth
Airbnb - Awards
Airbnb - Competitors
Airbnb - Future Plans

Airbnb - About

Airbnb expanded as Airbed and Breakfast is an online marketplace to connect people in need of accommodation with the people (host) who are willing to rent their home or space in a particular locality.

Airbnb is based out of San Francisco, California, and offers the convenience of a website and a mobile app for users from around the world to list, discover and book accommodations.  

The idea was originally conceived in 2007 by Brian Chesky and Joe Gebbia which was brought into shape in August 2008 along with Nathan Blecharczyk. Starting with 2 hosts, Airbnb has over 4 Million hosts with about 5.6 Million listings scattered across the globe today. They claim to have served more than 1 Billion guests as of September 2021.

Airbnb offers a significant advantage over hotels in terms of cost, amenities, customer satisfaction, service, and many more. They create value for both the Host (free listing of their asset) and the Guest (offering a unique and authentic experience at an affordable cost).

There are numerous Airbnb subsidiaries including Luxury Retreats International Inc., Tilt.com, Accomable, Aibiying, Trooly Inc., Deco Software Inc., Trip4real Experiences, S.L., Lapka Inc., Airbnb UK Limited, HotelTonight, and more. Airbnb with the help of these subsidiaries operates a platform for stays and strives to transform experiences for guests worldwide.

Airbnb - Industry

Airbnb falls under the lodging sector of the hospitality industry. This industry is expected to reach a Compound Annual Growth Rate of 8% to reach $5891 billion by 2022's end. The hospitality industry is broadly classified into the following sectors: lodging, event planning, recreation, travel and tourism, and food and beverage services. This industry is considered to be more of leisure than basic needs.

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Airbnb - Founders and Team

Brian Joseph Chesky

Brian Joseph Chesky is the CEO and one of the co-founders of Airbnb. He attended the Rhode Island School of Design (RISD) and has a Bachelor’s degree in Fine Arts, Industrial Design. The Airbnb founder started his career with 3DID as an Industrial Designer and then became the Principal of Brian Chesky Design before founding Airbnb.

He was acknowledged as TIME’s 100 Most Influential People in 2015. At the age of 35 in 2016, he became the youngest one to be named on the Forbes 400 list. Chesky also joined 'The Giving Pledge' campaign initiated by Warren Buffett and Bill Gates.

Joe Gebbia

Joe Gebbia is known as the co-founder of Airbnb, who is also the chairman of Samara, Airbnb's design studio, and of Airbnb.org. He too attended RISD and secured a Bachelor’s degree in Fine Arts in Graphic and Industrial Design. Before founding Airbnb, Gebbia served as the industrial designer at Chronicle Books.

This Airbnb founder is a member of RISD’s trustee board and has donated $300,000 for a scholarship fund. Joe joined 'The Giving Pledge' campaign in 2016.

Nathan Blecharczyk

Nathan Blecharczyk is another co-founder of Airbnb. He earlier worked as an engineer in OPNET Technologies before joining Airbnb. At Airbnb, he was initially designated as Chief Technology Officer and designed the company’s website. In addition to CSO, he is the chairman of Airbnb China. He is also a member of 'The Giving Pledge' campaign.

Blecharczyk is a Harvard University graduate with Computer Science. Starting as a Bioinformatics Programmer at the Brigham and Women’s Hospital, Blecharczyk had served as the Intern Program Manager for Visual Basic .NET at Microsoft Corporation, and then as a Research Assistant at the Harvard Kennedy School of Government, and eventually became a Teaching Fellow at Harvard University. Blecharczyk had also previous experiences of serving as a Software Engineer at OPNET Technologies, Inc. and Batiq. The Airbnb founder was then the owner of Consult Mavens, LLC. and then joined hands with the other co-founders and founded Airbnb.

When last reported in 2020, Airbnb had an employee strength of over 5597 employees.  

Airbnb - Startup Story

The startup story of Airbnb or the Airbnb origin is quite interesting. The Airbnb company history started in 2007 in San Francisco, when Brian Chesky and Joe Gebbia were roommates. They were worried about their rent, which was due because they didn’t have money at that time. While thinking of ways to pay the rent, they came across the design conference scheduled to be held in San Francisco that weekend and found that all the hotel bookings in SF were sold out.

An idea picked up and they immediately decided to host some guests from the conference in their room. They got three airbeds and hosted three guests, thus planting a seed for Airbnb. Later when the guests left, Joe and Brian gave further thoughts to this idea and decided to move further.

Joe Gebbia reportedly wrote a letter to Brian Chesky informing him of his idea. Here's a copy of the subletter;

Nathan Blecharczyk joined them in early 2008 and they together rooted Airbnb firmly in the market.

The idea for Airbnb was planted when Brian Chesky and Joe Gebbia managed to host three guests for $80 per night. However, then they lacked the investment to construct the idea further. So, they decided to crop ‘Breakfast’ from Airbed and Breakfast for the time being and started selling breakfast targeting the 2007 presidential election campaign. This helped them keep their dreams alive.

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Airbnb - Mission and Vision

Airbnb mission statement focuses on creating "a world where anyone can belong anywhere”. They were keen on attaining this purpose through their dedicated employees and loyal hosts. Airbnb has evolved as it grew. With their earlier statement of ‘Unlocking unique experiences worldwide’, they evolved into a vision of “Belong Anywhere”. They strive continuously on their vision to make their customers feel at home always, irrespective of the place they are in exploring the world of their dreams.

Airbnb - Name and Logo

The name Airbnb was derived from the company’s initial name Airbed and Breakfast. The company was addressed as Airbed and Breakfast even before its formal inception in 2008. The founders reasoned the name as a reference to air mattresses rented out to three guests they hosted in 2007. Later in 2009, the name was changed from Airbed and Breakfast to Airbnb.

Earlier, Airbnb’s logo carried the entire name of the company, Airbed and Breakfast. When the company was renamed in 2009, the logo too was reduced to Airbnb written in blue.

The logo was again changed in 2014 with a symbol, which the company calls The Belo, saying it is the universal symbol of belonging. This logo, when dissected, depicts four other symbols that represent People, Places, Love, and Airbnb, when combined together forms the Belo logo.

Airbnb - Business and Revenue Model

Airbnb is an online platform that connects people (guests) in search of accommodation with the hosts who are interested in renting out their place. They help the host to find guests by allowing them to display their place on Airbnb's platform for free of cost. On the other side, the customers get a chance to choose their accommodation from myriad places showcased, as per their needs. Airbnb collects the payment online, retains it until 24 hours after guest check-in, and then pays the host.

Airbnb’s revenue comes from the two-way commission charged from both the host and the guest. They charge 3% from the hosts and typically around 14% from the guests for every transaction made.

Airbnb - Challenges Faced

Local Laws and Regulations

There are different rental laws and regulations for every country and sometimes even city. For example, New York rental laws prohibit renting properties for less than 30 days, unless the tenant is living there. Airbnb took the issue to court but finally, in 2019, they agreed to share information of listings that New York City laws demanded.

Racial Discrimination by Hosts

There were widespread complaints faced by Airbnb on hosts discriminating against guests on racial and other backgrounds. As a result, Airbnb hired Eric Holder, a former Attorney General, to create and regulate anti-discrimination policy to resolve this issue.

Fraudulent Listings

A travel blogger named Asher Fergusson found that some hosts used fake and fraudulent information to get through Airbnb’s background check. This unauthenticated hosting resulted in a number of negative incidents like privacy invasion, booking cancellation, refund refusal, and some rare incidents of corpses spotted on the lawn and even murder. Airbnb is still struggling to completely eradicate such fraudulent listings.

Logo Controversy

When Airbnb introduced a new logo in 2014, it received a heavy backlash and sparked controversy saying that the logo has sexual connotations. However, Airbnb stood firm to their Belonging theory, and the issue faded away slowly.

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Airbnb - Funding

Since its inception in 2008, Airbnb received a total funding of $6 Billion. Airbnb’s market valuation surpassed $100 Billion after the company went public in December 2020 and is considered to be the biggest trading debut in the United States so far.

Airbnb - Acquisitions

Airbnb has made around two dozen acquisitions and the most important ones were Hotel Tonight and Luxury Retreats. Here's checking out the other acquisitions of Airbnb:

Airbnb - Growth

Started in a room in San Francisco, today they’ve their listings in over 1,00,000 cities around the world. Airbnb is one of such companies, which grew from nothing to a $30 bn firm in just 11 years.

The funding started to flow in gradually from $20,000 in the form of the Pre-Seed round to the highest amount of $1.5 Billion in Series G. The Covid-19 pandemic came as a terrible disaster to their business operation. However, when the company went public in December 2020, Airbnb made a remarkable achievement by entering a $100 Billion market valuation right on the first day of their IPO. The Airbnb share value surged to a record high of 113% from $68 per share to $144 per share. This was one of the highest first-day rallies in US history.

The number of guests going Airbnb has grown tremendously year on year. Where Airbnb saw around 540,000 guests on new year's eve back in 2014, it welcomed close to 4.5 mn guests on 2019's new year's eve.  

Airbnb is nothing but an accommodation marketplace that provides access to over 6 million unique places to stay comfortably and at their leisure in nearly 100,000 cities and 191 countries. Interestingly, Airbnb also offers access to local communities and interests through more than 30,000 activities run by hosts across over 1,000 markets around the world so that you can be a traveler and not just a tourist. It entered India in 2016. Since its inception in India, the company has had around 45,000 listings with Goa being the most popular Airbnb haunt with 6000+ listings.

Airbnb has last been valued at over $75 bn in December 2020.

Airbnb - Awards

Airbnb won the ‘App’ award in the South by Southwest Conference in March 2011. Later in 2020, employee work satisfaction was analyzed through ratings and reviews, and Airbnb secured the Best Company Perks & Benefits award.

Airbnb - Competitors

Although Airbnb commenced its operation with a unique idea, they’ve gained a handful of rivalries as they grew by. Here are some of the top competitors:

Vrbo - Vrbo or Vacation Rentals By Owners is a subsidiary of HomeAway and focuses primarily on vacation rentals. HomeAway was later acquired by Expedia Group in 2015 and they provide a competitive environment to Airbnb.

FlipKey - FlipKey is another vacation rental site that provides a safe and easy marketplace for customers to find the best place of their choice. It is a subsidiary of TripAdvisor, a travel booking company.

OYO - OYO and Airbnb have a common goal but operate with different business models. Since Airbnb hasn’t rooted deeply in India, OYO stands to be their replacement and holds a good market position.

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Airbnb - Future Plans

Airbnb aims to transform Travel into a Living. To achieve this, Airbnb introduced more than 100 upgrades and innovations to its existing services that ensure flexibility among hosts and guests.

Airbnb is keen on creating a new kind of travel for its guests in the post-pandemic situation. They recently launched 4 new property types namely, Vacation Home, Unique Space, B&B, and Boutique for a flexible user experience.

Brian Chesky said that Airbnb is concentrating beyond traditional connotations of work travel and leisure for its success in the future.

FAQs

What is Airbnb?

Airbnb is an online marketplace to connect people in need of accommodation with the people (host) who are willing to rent their home or space in a particular locality. The Airbnb founded date is listed as August 2008.

When Airbnb started?

Though the Airbnb idea was germinated in the minds of Brian Chesky and Joe Gebbia in 2007, it was only after Nathan Blecharczyk joined them in 2008 that the journey started for Airbnb. The company was founded in August 2008 by the Airbnb creators.

What is the Airbnb origin story or the story of Airbnb?

The Airbnb origin or the Airbnb story is closely connected with the Airbnb founder story, which began in 2007 when Brian Chesky and Joe Gebbia were roommates and they lacked the money that was due as their rent. While thinking about how they can pay their rent, they were to attend a design conference in San Francisco on the weekend, where they soon discovered that all of the hotels in SF were booked. This helped them with the idea that they also host some guests by themselves. In no time, Brian Chesky and Joe Gebbia arranged for 3 airbeds for 3 guests, which was the start of the hospitality business that would later be known as Airbnb. Soon they were joined by Nathan Blecharczyk in 2008 and Airbnb was founded.

How many users are using Airbnb currently?

There are over 4 Million hosts with 5.6 Million listings around the world. They’ve hosted more than 1 Billion guests so far.

What is the average earning of the host?

The all-time earnings of the hosts until October 2020 were recorded at $110 billion. The average earning of a host stand at $9,600 per year.

What is the commission rate charged by Airbnb?

Airbnb charges a 3% commission from hosts. Guests are charged typically around 14% for every successful transaction.

Who are the top competitors of Airbnb?

Some of the top Airbnb competitors in India are:

• FlipKey
• OYO
• Vrbo
• HomeToGo
• OneFineStay
• HouseTrip