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How Does Airbnb Make Money (Business and Revenue Model)

The Airbnb business model

How Does Airbnb Make Money?
Here’s what you should know:
  • What is Airbnb, and how does Airbnb work?
  • How does Airbnb make money?
  • Airbnb Service Fees
  • Interest Income
  • Airbnb’s Subsidiaries, Acquisitions, and Exits
  • Airbnb’s profit and revenue
  • What is the Airbnb business and revenue model?
  • Airbnb’s funding and market cap

How does Airbnb make money? Here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Airbnb business model, their year-over-year revenue, and how Airbnb works.

What is Airbnb, and how does Airbnb work?

Airbnb is an online peer to peer marketplace for booking vacation rentals, tourism activities, and more.

Founded in 2008 by Brian CheskyNathan Blecharczyk, and Joe Gebbia, Airbnb began trading on the NASDAQ on December 10, 2020, under the ticker symbol “ABNB”.

To date, Airbnb has now had over 4 million hosts, 6 million listings, and 1 billion guests on its platform, making it the largest online vacation rental marketplace in its industry.

How Airbnb works is: Users can start by browsing “Stays” and or “Experiences” by first entering a location and customizing the filter presets on Airbnb’s homepage. Once the user finds a rental or experience they are interested in, they can either save it to their favorites wishlist or book it.

Some of Airbnb’s competitors include Vrbo, HomeAway, and other vacation rental companies.

Airbnb App in Apple App Store | Airbnb Business Model | How Does Airbnb Make Money? | How Does Airbnb Work?
Source: Apple App Store | Airbnb

How does Airbnb make money?

According to Airbnb’s about page, Airbnb has had more than 4 million hosts, 6 million listings, and 1 billion guests all time on its platform.

So how does Airbnb make money off of all these listings, hosts, and guests?

Below is a breakdown of how much money Airbnb makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Airbnb makes money (in 2022):

Airbnb has a revenue model that makes money in two (2) ways – service fees and interest income.

#1. Airbnb Service Fees

Airbnb makes the majority of its money by collecting service fees from each booked stay and or experience on its platform.

In 2021, according to page 54 of Airbnb’s 2021 Form-10K, Airbnb facilitated 300.6 million booked “Nights and Experiences” totaling roughly $46.9 billion in Gross Booking Value (GBV) through their platform. Of which, Airbnb collects a service fee from all of that booked revenue.

Airbnb offers two (2) types of service fee structures to its hosts: Split fee and Host only fee. Both of which add up to roughly 14% to 17% in service fees paid to Airbnb. You can find the breakdown of each structure laid out below or read more about it here.

Airbnb Service Fee Percentage:

  • Split fee: hosts pay 3%, guests pay ≤ 14.2%
  • Host only fee: hosts pay 14% to 16%, guests pay nothing
Airbnb Service Fee Percentage | Airbnb Business Model | How Does Airbnb Make Money? | How Does Airbnb Work?
Source: Airbnb

#2. Interest Income

Airbnb also makes a small portion of its money through interest income. In fact, $85.9 million or just 2% of Airbnb’s total revenue came from interest in 2021.

Interest income, according to page 60 of Airbnb’s 2021 Form-10K, is “interest earned on our cash, cash equivalents, marketable securities, and amounts held on behalf of customers.”

Airbnb’s Subsidiaries, Acquisitions, and Exits

To date, Airbnb, Inc. has made a total of 24 acquisitions, 18 investments, 12 lead investments, and 2 successful exits.

Airbnb Acquisitions | Airbnb Business Model | How Does Airbnb Make Money? | How Does Airbnb Work?
Source: Crunchbase | Airbnb

Airbnb’s profit and revenue

In 2021, Airbnb reported $5.99 billion in revenue.

Note: Because Airbnb, Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Airbnb’s publicly released financial reports, including annual reports, through Airbnb’s investor section on their website.

What is the Airbnb business and revenue model?

Airbnb makes money through a few revenue models that they combine within their company, they are:

  • Commission based business model
  • Interest revenue model
  • Mergers & acquisitions (M&A) business model

Airbnb’s funding and market cap

According to Airbnb’s Crunchbase profile, Airbnb has raised $6 billion over 33 rounds and has a market cap of $103.02 billion as of April 2022.