Airbnb is one of the most successful sharing economy-based businesses in the world. So much so that it’s already available in more than 190 countries and has one of the highest customer bases in the market. Which is interesting since many people don’t know that this is due to their business model. What does it have that differentiates it from the rest…?

Airbnb and its business model

This company offers a service that consists of connecting travelers with local hosts anywhere in the world. It was born because its creators were unable to pay the rent of an apartment to stay. The app then allows anyone to stay with a host that offers accommodation on Airbnb.

It goes without saying that it has expanded around the world and that by March 2017 it was valued at $31 billion. Taking this into account, it’s worth reviewing in detail the broad business model of this company. Which has absolutely nothing in common with some of the best hotels in the world.

1. Its model isn’t conventional

Airbnb uses what some call “aggregator business model”. Namely, the company looks for services/goods providers (in this case the hosts that offer their homes) to turn them into their partners and “aggregate them” to themselves. And then, have them sell those services/goods under their brand name.

Hotels must spend a huge amount of money to maintain their properties and real estate. Airbnb doesn’t need to do this since its partners (the hosts) are those who offer their homes on behalf of the company. Which makes it grow very quickly and with almost nonexistent marginal costs.

2. Connect with people

One of the main virtues of the Airbnb application is that its source of income comes from the people. What does this mean…? Each time a person from anywhere in the world becomes a host or traveler with this app, it allows you to meet many others and make your brand known.

how to travel with airbnb
With Airbnb, anyone can stay in local homes. Which in turn allows them to learn from the culture of the place where they stay.

In fact, the results of interactions between travelers and hosts are one of the forms of income of this platform. And this consists of charging a commission out of the money charged by the hosts of the travelers.

3. It’s profitable anywhere in the world

With the exception of some legal regulations, there are no barriers that limit the operation of Airbnb. It’s only a matter of both parties (hosts and travelers) respecting the terms and conditions of this company so that the business can be carried out. This is one of the reasons why it is available in more than 190 countries.

This makes it possible for Airbnb to expand its business so that it benefits them at the end of the day. The use of its platform does not suppose any limitation or major inconvenience for travelers or hosts.

4. It’s based on trust and security

Airbnb is aware that offering a house for strangers or staying overnight with someone you don’t know is dangerous. Therefore, the platform offers several options to increase trust among its users. Travelers can see the public profile of hosts and vice versa.

user profiles on airbnb
This is how the profile of a user on Airbnb looks like. Showing a description, all contact methods that are verified and reviews of hosts and travelers about that person. Source: Wherever the Wind Takes Me

A host can request identification documents from travelers who wish to stay in their homes. And the hosts can also establish rules inside their homes to avoid any inconvenience. In case of material damage, Airbnb offers insurance of up to one million dollars.

5. It’s flexible for its clients and partners

The application allows to offer lodging at fairly cheap prices. Which makes travelers from around the world see it as an attractive option in the face of economic difficulties. Anyone can offer their home for the price they consider. Or if not, Airbnb has a system to recommend a price based on amenities, location and benefits.

Airbnb is growing to become one of the most efficient and prepared companies in the world. Through a business model that undoubtedly adapts very much to the times and circumstances that surround it.

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Airbnb allows you to stay wherever you want!