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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 give us an insecure ambience. Moreover, leaving the comforts of home alone can cause big distress. So 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. Right from choosing the quarters to offering support around the clock until we part, they brought 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.
Airbnb - Company Highlights
| Startup Name | Airbnb |
|---|---|
| Headquarters | San Francisco, California |
| Industry | Hospitality, Lodging |
| Founders | Brian Chesky, Joe Gebbia, Nathan Blecharczyk |
| Founded | August 2008 |
| Revenue | $4.387 Billion (as of September 2021) |
| Website | airbnb.co.in |
Airbnb - Origin and Evolution
Airbnb - Latest News
Airbnb - Industry
Airbnb - Founders
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 - FAQs
Airbnb - Origin and Evolution
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.
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).
Airbnb - Latest News
October 28, 2021 - City Portal, a service platform launched by Airbnb, to help local and city governments to take actions on short-term rental and tax policies for adjusting their tourism market. As of now, 100 City Partners have started using this platform.
October 28, 2021 - Airbnb has added 11 languages to its Urgent Support Line which was earlier availed only in English. Those 11 languages are Czech, Brazilian Portuguese, Dutch, French, German, Hungarian, Italian, Japanese, Korean, Malay, and Spanish.
October 14, 2021 - Airbnb joined hands for a pilot program with Holaluz, a renewable electricity and gas company based in Barcelona, to create awareness among hosts to adopt green energy for providing sustainable hosting services in the future.
Airbnb - Industry
Airbnb falls under the Lodging sector of the Hospitality industry. This industry is expected to reach a Compound Annual Growth Rate of 18.5% in 2021, with a market valuation of $4132 Billion as reported by Statista. The hospitality industry is broadly classified into the following sectors namely, lodging, event planning, recreation, travel and tourism, and food and beverage services. This industry is considered to be more of leisure than basic needs.
Shubham Kumar
Airbnb - Founders
Brian Joseph Chesky is the CEO and one of the co-founders of Airbnb. He attended Rhonda Island School of Design (RISD) and has a Bachelor’s degree in Fine Arts. 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, Chief Product Officer and co-founder of Airbnb, was born on August 21, 1981. He too attended RISD and secured a Bachelor’s degree in Fine Arts in Graphic and Industrial Design. He 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 is the Chief Strategy Officer and 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.
Airbnb - Startup Story
The startup story of Airbnb is quite interesting. In 2007 in San Francisco, Brian Chesky and Joe Gebbia were roommates and they were worried about their rent due as they didn’t have money. 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 hotels 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.
Nathan Blecharczyk joined them in early 2008 and they together rooted Airbnb firmly in the market. Started in a room in San Francisco, today they’ve their listings in over 1,00,000 cities around the world.
Arbaz Sayed
Airbnb - Mission and Vision
The mission of Airbnb is “To create 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 corpse 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. But Airbnb stood firm to their Belonging theory and the issue faded away slowly.
PV Vyshnavi
Airbnb - Funding
Since its inception in 2008, Airbnb received 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.
| Date | Round | Money | Investors |
|---|---|---|---|
| September 5, 2020 | Series G | $635K | Global Secure Invest |
| April 14, 2020 | Debt Financing | $1 Billion | Fidelity, T. Rowe Price, BlackRock, Oaktree Capital Management, Apollo Global Management, Benefit Street Partners, and Owl Rock Capital |
| April 6, 2020 | Private Equity Round | $1 Billion | Silver Lake, Sixth Street |
| September 22, 2016 | Series F | $555.5 Million | TCV, Glade Brook Capital Partners, Geodesic Capital, FirstMark, CapitalG, Altimeter Capital |
| November 20, 2015 | Series E - 2 | $100 Million | FirstMark |
| June 28, 2015 | Series E - 1 | $1.5 Billion | Kleiner Perkins, Sequoia Capital, GGV Capital, Horizons Ventures, T. Rowe Price, Wellington Management, Fidelity Investments, Tiger Global Management, General Atlantic, Temasek Holdings, Baillie Gifford, Groupe Arnault, Hillhouse Capital Group, China Broadband Capital, Manhattan Venture Partners, Slow Ventures, Tim Ringel |
| April 16, 2014 | Series D | $475 Million | Sequoia Capital, Andreessen Horowitz, T. Rowe Price, Dragoneer Investment Group, TPG, Sherpa Capital, Smile Group, Shervin Pishevar, ACME Capital, 137 Ventures |
| October 28, 2013 | Series C | $200 Million | Sequoia Capital, Tuesday Capital, Founders Fund, A-Grade Investments |
| June 25, 2011 | Series B | $112 Million | Sequoia Capital, Andreessen Horowitz, DST Global, CrunchFund, Jeff Bezos, Oliver Jung, Ashton Kutcher, General Catalyst Partners, Y Ventures, Tuesday Capital, SV Angel, GreyLock, Axel Springer Digital Ventures |
| November 10, 2011 | Series A | $7.2 Million | Sequoia Capital, SV Angel, Greylock Partners, Ashton Kutcher, Jeremy Stoppelman, Elad Gil, Keith Rabois, Y Ventures, Dave Holmes |
| April 1, 2009 | Seed | $600K | Sequoia Capital, Y Ventures |
| January 1, 2009 | Pre-Seed | $20K | Y Combinator |
Airbnb - Acquisitions
Airbnb has made around two dozen acquisitions and the most important ones were Hotel Tonight and Luxury Retreats.
| Acquiree Name | Date of Acquisition | Price |
|---|---|---|
| Accoleo | June 2011 | - |
| CrashPadder | March 2012 | - |
| DailyBooth | July 2012 | - |
| NabeWise | July 2012 | - |
| Fondu | October 2012 | - |
| Localmind | December 2012 | - |
| Pencil Labs | December 2014 | - |
| Vamo | September 2015 | - |
| Lapka | September 2015 | - |
| Trip4real | September 2016 | - |
| Luxury Retreats | February 2017 | Under $300 Million |
| Tilt | February 2017 | Around $50 Million |
| ChangeCoin | April 2017 | - |
| Deco Software | May 2017 | - |
| Trooly | June 2017 | - |
| Accomable | November 2017 | - |
| AdBasis | November 2017 | - |
| Koko | November 2018 | - |
| Luckey | December 2018 | - |
| Gaest | January 2019 | - |
| HotelTonight | March 2019 | $400 Million |
| Urbandoor | August 2019 | - |
Airbnb - Growth
The idea for Airbnb was planted when Brian Chesky and Joe Gebbia managed to host three guests for $80 per night. But when they lacked 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.
Then the funding started to flow in gradually from $20,000 in Pre-Seed to the highest amount of $1.5 Billion in Series G. The Covid-19 pandemic came as a terrible disaster to their business operation. But 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. Their 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.
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.
Vidhi Punamiya
Airbnb - Future Plans
Airbnb aims at transforming the Travels 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.
Airbnb - 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.
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 is $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
Author: Bharath
Source : https://startuptalky.com/airbnb-success-story/
Date : 2021-11-30T15:00:50.000Z