Airbnb is a website on
which travelers can search, find and rent accomodation. There are
different types of lodging such as extra-rooms, entire homes and
unique accomodations, like castles and igloos. More than 34 000
cities in over 190 countries are proposed.
This privately owned
company was founded in August 2008 by Brian Chesky (an American
internet entrepreneur), Nathan Blecharczyk (an American billionaire
businessman) and Joe Gebbia (an ex-designer) in San Fransisco,
California.
This service is very
successful earning the title of Inc's (American monthly magazine)
2014 company of the year.
Which
elements make the company succesful ?
About 20 million people
and 10 million in 2014 alone used the platform for booking
accomodation. The website also surpassed 800 000 listings worldwide.
Airbnb now offers more types of accomodation than any other hotel
chain in the world.
One if the key elements of
the company's success is that they're serving a previously unmet
market need.
In addition, the interface
on the website is easy to use because it has a high developed search
functionality. You can choose the dates of the stay you wish, the
room type, the price range, the size (number of bedrooms,bathrooms
and beds), neighborhods, a superhost making your trip “memorable”,
amenities (wireless internet, pool, kitchen,etc.), the property type
(apartment, house, even a boat,etc.), and the host language.
Moreover, the website is
well designed. The designers really try to put themselves in the
user's shoes by making it very modern and attractive. You can also
notice that the photos, which are shown on the website, are beautiful
and colors are warm.
Another important element
is user trust. There are user-reviews about the company, the living
conditions, the hosts, etc... This allows the company to make some
improvements if they need to.
The last important aspect
which makes the company successful is the scalability, which is the
ability to expand the business to other market segments.
Some Airbnb statistics in 2015
- 50 million Airbnb users
- 640 000 hosts
- 500 000 stays per night
- Airbnb is active in 57 000 cities and in 150 countries
- The average amount an Airbnb host earns annually from temporarily renting out their space is $7 350
- The top city for active Airbnb listings is the city of Paris which counts 40 000 listings
The
company's success story
At the very
beginning, the concept was called Airbed and Breakfast. The website
proposed accomodation for those who wanted a short stay. The
breakfast was included in the price. This process was very useful for
those who were unable to book a hotel because of the saturation in
the market.
When Chesky and
Gebbia were roommates in San Fransisco,they transformed their room
into a guesthouse hosting three people on air mattresses and offering
homemade breakfast..
In october 2007,
they also created special edition breakfast cereals in order to fund
the company. The 2008 presidential candidates Barack Obama and John
McCain were present on the product packaging.
In two months, the amount of 800 boxes of cereals was sold at a price of $40 each. These ones were sold until January 2009.
In March 2009, the
name airbedandbreakfast.com was changed into Airbnb.com and the
site's content also changed.
In June 2015, Airbnb
decided to sponsor Manor F1 Team. Their logo appeared on the cars on
the front nose and on other areas. It also appeared on team wear and
the drivers' overalls.
The international
expansion for Airbnb started in May 2011 when they acquired a German
competitor, Accoleo. The first international office was launched in
Hamburg.
In May 2012, six
additional international offices were opened in Paris, Milan,
Barcelona, Copenhagen, Moscow and Sao Paulo. Existing offices were
located in San Fransisco, London, Hamburg and Berlin.
They announced
in September 2013, that their European headquarters would be located
in Dublin.
In November 2012, an
office was also opened in Sydney where Australian consumers account
for one tenth of the Airbnb userbase.
And finally, Airbnb
expanded to Cuba in April 2015. This is one of the first US companies
to do so.
Illya G.
I like to use Airbnb when I travel in Europe. I find that it’s usually cheaper and more comfortable than the hotels which are at the same price. Airbnb offers us a new way when we consider the accommodation problem. I used to suggest my Chinese friends to use Airbnb when they travel, but it seems that they don’t like it. They think it’s not safe and convenient to live in a stranger’s house, they do really prefer to living in a hotel, even it’s much more expensive. And I know Airbnb does not do very well in its Chinese market. Thus, I think that the culture can really affect the success of one company.
ReplyDeleteBAO Mengwei
Hello Mengwei,
DeleteThank you for your comment.
Indeed, as I saw on some forums, Airbnb is unpopular in China.
They prefer hotels for the reasons you mentionned. This is also because of the fact most of Chinese students don't have credit cards to pay in Airbnb.
However, Airbnb is a very recent company which is only 7 years old and their international expansion started 4 years ago. I think that they need time to improve their strategy to expand and to adapt to different cultures.
Illya G
Hello Illya,
ReplyDeleteI really like the new sharing economy model and I think Airbnb is a great invention.
However I think it is an unfair competition to the traditional industry players such as hotels, hostels and bed and breakfasts who are strictly regulated and can't compete with Airbnb. The latter is beyond the scope of the law, only commissions are charged with VAT, hosts can easily hide their business from their tax authorities and not pay taxes.
As a matter of facts Airbnb encourages the underground economy and we observe an increase of the price of the night rentals in some touristic areas as some hosts prefer to let their properties for short-term than to find long-term occupants.
Lucile R.
Hello Lucile,
DeleteThank you for your comment.
It'a shame some hosts do not pay taxes at all and this encourages the underground economy.
Nevertheless, some efforts are made by the authorities to prevent such things from happening. For example, according to an article from Los Angeles Times published in March 2015, "a California state senator, a Sonoma County Democrat, wants to give cities the authority to collect taxes from people who rent private rooms and even houses through online services like Airbnb. A fellow state senator, a Compton Democrat, wants full disclosure requirements for online house-sharing firms, including any fine-print leases banning such subletting".
Illya G.
Hello Illya
ReplyDeleteI find your article very interesting. I was also thinking of writing something about Airbnb, because as you know I work in a Hotel and the owners are always complaining about the unfair competition between hotels and those new internet applications. I do think it's important to have some competition in the market but those companies proposing services like that are really "harming" the traditional hotel business, it forces hotels to reduce their prices more and more, charging for extra services like breakfast or amenities that before they used to offer for free to clients. We also need to remember that hotels pay high taxes and the staff to work contributing to the local economy. The owners of appartements insted of renting it to local people looking for a place to live, they prefer to rent it on Airbnb because they get more money, so they are also contributing to a raise of the rent in the cities.
Alonso B.
Hello Alonso,
DeleteThank you for your comment and those details.
Indeed, there are few other Airbnb advantages over hotels:
- You can find bigger spaces at a lower price
- There are kitchens. This allows to prepare meals and spend less money
- Airbnb proposes better amenities than hotels
- Presence of a washing machine
- Free wifi
etc...
Illya G.