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Airbnb business model


AirBnB model

we are going to discuss about Airbnb business model

You might have not heard about it, but it has just launched in India

A model similar to Oyo Rooms

and a Bit Different in other sense

Oyo Uses its Own investment whereas they Don’t

Air Bnb is Similar to OLX


On Olx, we can sell any item

and post an Add Accordingly, and if someone wants to buy it, then can buy

And that too in free, and They earn money Through Adds

But Air Bnb have a different approach

If you want to Post an Add, and you get a Buyer for it

I’ll take commission from you as well as from the other party

Lets logically think about how they take commission from us

If someone buys it Online

then there will be a transaction

Maybe from the card, and you have to pay to the Payment Gateway

and if you know that gateway usually takes 2 Percent for it

and They are taking 3 Percent

and If Someone gets a Buyer

They take upto 20%

and They take around 12% of the commission from the buyer also

Which i think is Wrong

If Customer wants to buy a product from you


Then he/she have to give 12% Commission

Personally, i don’t like it

I told you in the Oyo Rooms Model

that they take the hotel and makes changes accordingly

and they list that Hotel in their Website

and Customer takes the Service from their website

and Apply Discount coupons , other offers

But what happen here is

Suppose you have a Vacate Room, and you aren’t getting anything from it

You can List Yourself in their Website

Now Customer will see Your Hotel Listing

just like what happens on Olx

you will see a Listing

If someone wants to come to your location

and cant Afford the expensive Hotel

He will come to your location and accommodate at relatively less price

And This in whole creates a demand

This will affect the Hotel’s foot fall

as their room are much expensive compared to the Oyo rooms

And they will take rooms from Oyo

and take a vacate room for even a day

and ill offer multiple services to them

like Tea, A Shared Air Conditioner, wifi


and can uses the other available facilities

I have to Pay more price to the hotels than what i am paying

and lets Think About the Pros and the Cons

First of all they are creating opportunities for the Room owners

as they can earn by listing to the OYO

and the Customer is also getting an Opportunity

to take a less expensive room from OYO

at Lesser Price

They also have a Experience and the Review Section

Just like what we can see on Amazon and other E commerce sites

But if we talk about OLX, The doesn’t offers anything like that

and In OYO rooms, you can read the Reviews

But what if i stayed in someones room and they try to Kidnap me

and beat me, then?

or any Mishap. happened

If a Girl stayed in the room and Boy tried to do something Wrong, Something bad could be happen

so for that, they have an Insurance Facilities too

to insure you Upto 1 Million Dollar

Nearly 6.5 Crore INR

When you accommodate in a room through them

and something bad happens like a Kidnap or a Murder

or something like that

You don’t have to worry about anything, Your parents will get 6.5 Crore INR

and lets try to understand another thing

that our Homes comes in the Residential sector

not in the Corporate sector

So legally i can’t open any shop or Business in my Home

That what we can usually see in Delhi

But legally I cant do it, So i Converted my

Room into a Hotel

I am paying House tax Only, not the commercial Tax

and If I registered myself

Goverment can takes some action against us

Like a Sue or a Case

Europe has seen a lot of cases like this

and People have suffered several cases

In India, Its new so we have to wait to see long term affect

If you have a vacate room

and wants to earn by giving an accommodation to someone for a day Or Ten or Even for a Month

Even you can add. a service for Boat Sailing

If you have some Skills

They have an option for experience also

Like a Body Massage

and they have different categories for different service and skills

Suppose i am going to USA for a Trip

and i dont think anything about the USA

I am a Homie Guy

and Habitual of living with my Parents only

But if stayed in the hotel, i might get scared during a Thunder

Their website also offers a room

with the different native families

and The family i get most comfortable with through their website, i can book the Room accordingly

I was reading some reviews and i really likes it

There were two brothers

and i went to meet a cousin and he wasn’t available so i meet the younger one

and i really liked it

you can understand the level of Attachment people are getting through this was

Think about it, How you felt if you read a comment

and gets a Similar Experience

You will consider them as a Celebrity

So list yourself, and be a Celebrity

and you will be on Internet

and people will going to talk about you

that this perosn is very good and a great human

and i was talking about the service, they will take 20% Commission.


If you are going for Massage service for 1000Rs., Their commission will be 200Rs Flat

From the Service Hoster

Not from the one who is taking the Service

But If we talk about the rooms

They will take commission from both the party

The one who is taking it will give 3% and the one who is Hosting their add will give upto 2O%

From the 2008, when the company started

They have served more than 26 Crore Guest

11 August, 2008 is their Founded Date

and Brain, Joe and Nathan

Three friends started this Company

I’ll tell you later about their Journey, Idea

Its a California and a USA Based Company

and have been through 12 Funding Rounds

and till F funding, have received 4.4Billion Dollar Funding so far

and they have Acquire around 17 Companies

and if we Check their Acquisition

They have Acquire similar and a Related Industries

Like a Search based or Review based Industry

Basically they are developing their Model

and what have analysed so-far is that they do investment also

So they are making money from that thing also

buy Reinvesting their Profit

There were two friends Brain and Joe who used to study together

and moved to San Francisco and becomes the Roommate

and They did not have much money

So they rent a room in that Area

Due to some Financial issues and their Expenses

They think of renting their Another Vacate Room

So they Bought only Air bed as a Furniture

that what we usually see in Tv commercials

and placed it in that Vacate room

and They Publicise that room for the one who are in seek of staying it for a day or so

and They named it Air bed and Breakfast( Air Bnb)

Air BnB, Thats how the name originates

What actually happened later

They were Doing it Offline, and then their Friend came into the Business on 2008 Feb.

He came into Business as the C.T.O Chief Technical Officer

Basically, He designed their Website

Like what happens in Friends usually, that ill make you the CTO, If you do a work for me

He become the CTO By making their Website

Now they were listed online

and they got some increase in the reach

Now they planned a new strategy

of Providing a Breakfast also, as they had Breakfast in their Name

They made a Cereal Box

and sold 800 boxes of 40 Dollars each

and their strategy of selling it was very unique

as their were elections happening in the USA

And used Obama and McCain in their Label

Their Product marketed by this very easily

and they earned 30,000 Dollars

and they Re Invested this money in their Bussiness

Till March 2009

They got a listing of around 2500

and had around 10,000 Registered Users

After this, they start getting Funding

and you can see the data of the Funding

from where and when they got it

So this was the Case Study of the Air BnB and i hope you liked it

I tried my best to write this article , i apologize for any error 

if you appreciate my work then plz share it .

                                                          ________________________Gauhar Ali

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