Income generation : There are different cases.

Compare this to the other extreme of resort holidays where people may not experience anything authentically. This can start with the fact that guests and hosts meet each other but goes far deeper.

Authentic stays & experiences: one of the earliest and still present propositions is to experience the location more authentically.

kitchen, coffee machine, washing machine, etc) can save cost on ancillary items, such as breakfast, meals and more.

Often cheaper than comparable sized hotel rooms: We will see a comparison later, but often Airbnb homes are cheaper or provide more value (cost vs what you get).

Somewhere in the middle are boutique hotels with different interior design in each room but it’s not the norm. Hotels on the other side, need to have some sort of commonality to achieve economies of scale and apply repeatable processes.

The amount of choice & variety : Airbnb has an unmatched amount of variety simply based on the fact that each home is different (exterior, interior and amenities).

We recommend you also read the companion article on Uber's Business Model. It was a major stress test for Airbnb's business model and we will elaborate throughout this article including their financial results that allow some interesting conclusions to this end. The most relevant changes since our last update are related to the pandemic.

$150b+ generated for hosts in over 1b guest arrivals all time (and $13.8k earned by typical US host in 2021).

Listings in 100k+ cities in 220+ countries.

6m active listings (it was over 7m before the pandemic).

In the last 14 years, Airbnb has grown to an ample competitor for even the largest hotels chains and online travel agencies. This is also our 3rd major update since with the latest update in 2020. This is our 2022 update of Airbnb's business model since we covered them first over 5 years ago.

The early-day motivations still are some of Airbnb’s most pertinent value propositions for their users. Like Uber and WeWork, Airbnb was founded around the time of the GFC (or Great Recession). The founders rented out an air mattress in their living room - a cheap alternative for guests who needed to save money staying in San Francisco as an additional income source for the hosts to help pay their rent in one of the most expensive cities in the US.

Airbnb rental business