Airbnb Business Model

Airbnb was founded in 2008 as an online marketplace to connect travelers looking for an authentic, unique place to stay with hosts that had extra room to rent. Airbnb operates as an intermediary, matching these two distinct customer segments.

The company has a radically lighter cost structure than the hotel chains with which it competes, because it does not own any of the rooms it lists on its website, nor does it manage a large hospitality staff. Airbnb’s main costs are platform management and marketing, which explains how they have scaled so quickly.

The success of Airbnb’s business model is based on a resource-light cost structure. It found an innovative way to partner with owners of idle assets (empty rooms) and help them monetize those assets via their matchmaking platform.

Airbnb differs from other matchmaking sites like booking.com or hotels.com, in that travelers associate the listed properties and rooms with the Airbnb brand as if it was a traditional hotel chain.