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How do home improvement contractors make money

We as travelers are changing the way we travel, and brands clearly are taking note of it. Checking off must-see lists & taking selfies is very passé, travelers are opting for the actual experiences that every city in the world has to offer. This right here is what Airbnb is all about. Airbnb urges you to actually live like a local when you visit your dream destination. The concept of Airbnb has been growing in India as well as across the globe, but the brand took a giant step towards expanding its Indian footprint by announcing their latest partnership with Jet Airways.

Business Concept

Just like Uber, Airbnb utilizes a platform business concept. This means they facilitate the exchange between consumers (travelers) and producers (homeowners). Because the consumers aren’t Airbnb employees, and because there’s practically an infinite number of homes that could potentially go up on the site, Airbnb can scale at an incredibly fast rate at zero marginal cost.

That’s where the platform business model trumps linear business models (Marriott, Hilton, and other traditional hotels). These linear businesses have to invest millions into building new hotels, while Airbnb doesn’t have to deal with that

Value Proposition & Customer

Airbnb is a community-based, two-sided online platform that facilitates the process of booking private living spaces for travelers. On the one side it enables owners to list their space and earn rental money. On the other side it provides travelers easy access to renting private homes. With over 1,500,000 listings in 34,000 cities and 190 countries, its wide coverage enables travelers to rent private homes all over the world. Personal profiles as well as a rating and reviewing system provide information about the host and what is on offer. Vice versa, hosts can choose on their own who to rent out their space to.

Mission & Core Values

Airbnb is more than an affordable travelling accommodation option. Through facilitating access to distinctive spaces and local culture, Airbnb aims to enable travelers to “feel at home anywhere you go in the world” by building connections with local hosts, gaining access to distinctive spaces and culture of their destinations.

Value Formation & Core Activities

Airbnb operates as a transaction facilitator between hosts and travelers who are looking for comfortable accommodation at a cheap price. By providing host protection insurance, as well as a rating and review system, the platform builds trust within the community of users and lowers transaction costs. Profiles and user reviews help to create reputation and trust among participants of the marketplace.

Revenue Model

Airbnb receives commissions from two sources upon every booking, namely from the hosts and guests. For every booking Airbnb charges the guest 6-12% of the booking fee. Moreover Airbnb charges the host 3% for every successful transaction.

Organisation

While Airbnb was at the Y-incubator, Paul Graham told them “it’s better to have 100 people who love you than having a million of people that sort of like you.” Therefore, Airbnb focuses on “making what people want” and cultivating a “sense of belonging”, by engaging its community through story-sharing on the Airbnb website and by inviting users to be part of its logo redesign campaign. Airbnb also interacts with the local community beyond the virtual space, through partnerships with city authorities in San Francisco and Portland.

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