Houseguests are always welcome at Airbnb.
With the rise of the internet and an apparent lack of connection between individuals, one place that there has been a surprising connection is with people inviting strangers into their homes overnight. This business model is one that shook the hotel industry and catapulted the company to fame with its low prices and easy to access interface.
Bed and Breakfast
Airbnb is a shortened version of the original name, airbedandbreakfast.com. Classmates Brian Chesky and Joe Gebbia were having trouble making their rent in San Francisco and so decided to put an air mattress on the floor of their living room and try to rent it out. Essentially, they turned their home into a bed and breakfast.
The idea of renting a room to travelers to make extra money isn’t new, and there had been online versions of this kind of model before. What Airbnb did differently was to give a unified, accessible online platform that would better guarantee the safety of both parties.
The company launched in 2008 and has revenues of more than two and a half billion dollars per year. It has acquired a wide range of subsidiaries including Crowdtilt, HotelTonight, and Accomable. The company has raised more than three billion dollars in capital throughout its existence.
Airbnb has had its fair share of controversies, which shouldn’t be surprising given that the company is facilitating individuals coming into the homes of strangers. If anything, it’s shocking that there hasn’t been more controversy.
Housing discrimination is a major problem in traditional rental settings, and there have been widespread accusations that this has extended to Airbnb. The Harvard Business School even did a study of Airbnb that showed that guests with names that sounded more African-American were less likely to be rented rooms through the site. It’s not just happening in the U.S. either, as there have been accusations of unfair housing practices in China as well.
Another accusation levied at Airbnb is that it’s contributed to rising housing costs in markets where the service is popular. Long term rental markets are negatively impacted by landlords giving their rooms over for Airbnb guests in an attempt to make higher profits.
Safety is of course a major concern for Airbnb. Though the site includes background checks, there have been reports of rodent infested rentals and other extreme conditions. Airbnb’s response to the roughly one thousand negative reports has been that they are insignificant given the quarter of a million rentals that the company has facilitated.
What always set Airbnb apart from its hotel competitors was its innovative business model and its usable platform. It relies on online advertising to spread the word about its offerings.
Users and renters must provide identification information and payment methods prior to booking. There is a secure messaging system that allows users to chat with potential rental property owners, and hosts are required to provide images and a whole host of important information.
Airbnb services all kinds of lodging spaces. There are single room and shared rentals, as well as whole home luxury rentals. There is a system of badges that allows guests to evaluate what the history of a rental is and to get a better understanding of their hosts. Airbnb has created a way for hotels to become less impersonal and increasingly more intimate. Many travelers appreciate that they can get to know a city they are visiting in less of a corporate environment by staying with someone who is local. In an age of digital interaction, that personal lodging connection has helped Airbnb to become a giant in the industry of travel and lodging.