Oct 23, 2021

Entrepreneur lessons of the AirBnB Business Model

Business Model Idea
by Maximilian Böger

What is AirBnB?

Airbnb is a community marketplace for people where unique spaces around the world can be listed and booked through mobile phones or the Internet. The listing of accommodation is free of charge for hosts and travellers are able to book accommodations from a list of verified hosts. To connect guests and hosts, Airbnb provides a private messaging system as well as an user recommendation feature. The charging occurs after the reservation has been made. The company promises security and reliability based on user reviews and ratings as well as on a secure payment system. Hosts are granted a property insurance coverage for offering their free space.

Which Entrepreneur Lessons can be Learned of AirBnB?

The entrepreneur lesson can be learned from the origins of Airbnb. Two of the co-founders were not able to pay their rent living in the expensive city of San Francisco. The idea of how to bring in some money focused on renting out some air matresses and let people sleep on them. After the first customers had come, the idea started to grow into a more elaborated website. The contribution of photos of the rental places helped to attract more customers which proves how crucial it is to collect information from customers in order to become aware of their needs. Today, several competitors exist with a similar business model. Airbnb does not limit its idea of shared economy to spare rooms only but tries to extend it by including new programs, such as the dinner program. With this, a new way is created to connect travellers with locals, and the company improves as an authentic brand.

However, this business model is also facing some legal problems as it can avoid certain regulatory mechanisms which usually concern the hospitality industry. The main issue is that hosts generate income by using privately held resources. With this, they compete with hotels but they do not need to pay taxes or deal with the zoning and safety regulations. This fact and regulations regarding renting are subjects to controversy in several cities.

AirBnB’s Premium Analysis For Free