THE GLOBAL AIRBNB PHENOMENON
Airbnb is one of the largest and most recognised short-term rental platforms in the world, originally founded in 2007 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. While the name Airbnb is now renowned around the world, it first went live in 2008 under the name Air Bed and Breakfast. The idea behind the venture was first born after Chesky needed to travel to another city for business.
He found few accommodation options available in a heavily saturated marketplace comprised of hotel chains. Since its inception, the platform has hit over 4 million hosts worldwide, with listings in over 100,000 cities. This is a huge step from the company's humble origins, where it begun as an air mattress set up in the CEO’s living room. The founding trio raised an initial $30,000 in cash to kickstart the company by selling cereal boxes named after presidential candidates.
Airbnb grew to 6.6 million global active listings at the end of 2022, with over 3 million in the Asia Pacific region - second only to Europe. Every second of each day, six guests will check into an Airbnb. That’s over 188 million check-ins per year, making this global platform one of the biggest travel success stories in the last decade. Following the end of the world’s pandemic recovery, Airbnb took in nearly $2 billion in profits for 2022. Data has shown an increase in net income of 153% year-over-year for the twelve month period ending March 31 2023, indicating a full recovery from its initial Covid-19 losses.
A NEW ERA OF TRAVEL
More recently, the global travel company laid its groundwork for their “live anywhere, work anywhere” philosophy, allowing their staff to live in any location throughout their country of employment and to travel overseas while working. While this is a stark contrast to 2020 when a quarter of their workforce was cut, this new mantra came into fruition when a new world of remote work and travel emerged from the global pandemic.
“The world is becoming more flexible about where people can work. We see this in our own business. We wouldn’t have recovered so quickly from the pandemic had it not been for millions of people working from Airbnbs.
Two decades ago, Silicon Valley startups popularised the idea of open floor plans and on-site perks, which were soon adopted by companies all around the world. Similarly, today’s startups have embraced remote work and flexibility, and I think this will become the predominant way that we all work 10 years from now. This is where the world is going.”
- Brian Chesky, Airbnb Newsroom
The growing popularity of remote work and travelling both for business and whilst still working has generated a new era of travel demand for short-term rentals. According to Airbnb, in 2015, over 250,000 companies had signed on to use the rental platform for work. This figure hit 700,000 only three years later in 2018. Today, numbers have increased exponentially and created all new ways of travelling for work. As short-term rentals have risen in popularity over the years, more and more companies have made the switch from hotels to Airbnbs and short-term rentals for business trips.
Bleisure - combining business trips with leisure activities and sightseeing on the weekends.
Team trips - employees travelling together for business to bond and collaborate.
Extended stays - employees travelling to other countries or cities on an extended business trip or for off-site training sessions.
Traditional business trips
While the Airbnb Headquarters is located in San Francisco, the company also has a number of satellite offices based outside of the United States. Locations include Beijing (China), Gurgaon (India), Dublin (Ireland), Montreal (Canada), Toronto (Canada), São Paulo (Brazil), Sydney (Australia), Berlin (Germany), Amsterdam (Netherlands), Paris (France), Barcelona (Spain), and London (UK). Their United States offices span everywhere from New York and San Francisco to Portland and Los Angeles.
Alongside the rising demand for remote working and business travel, another trend dominating international travel is the desire for more intimate and private accommodation options. This was no doubt born from the devastating impacts of Covid-19 rippling across the globe. In 2020, Airbnb reported a total of 251.12 million total nights booked in their rental properties. Despite total listings dropping around the world from the pandemic, figures grew significantly to almost 356 million nights in 2021. This increased a further 31% in 2022, with the majority of countries closing the door on Covid-19 restrictions in the second half of the year.
WHY HAS AIRBNB BECOME SO SUCCESSFUL?
According to Statista.com, Airbnb’s market capitalisation held a value of 73.34 billion as of April 2023. This is up from 54.13 billion in 2022. In the most recent market data available for online travel agents, Apptopia has listed Airbnb’s global market share as just shy of 26% - second only to Booking.com at 34.57%. In the United States, Airbnb holds the number one spot with a market share of 21.36%.
Given their phenomenal success, it might then come as a surprise to many to learn that the concept behind Airbnb was not an original idea. Before its inception in 2007, over ten years earlier, Vrbo launched the first travel platform that catered to the short-term rental market in 1995, while the likes of HomeAway.com, BedandBreakfast.com, and Couchsurfing.com already existed by the time Airbnb was first launched. So, why then was it Airbnb that turned into a global travel giant in such a short span of time?
For starters, the Airbnb website was envisioned and designed by the original founders, all graduates of the Rhode Island School of Design. The rental platform’s user interface and customer experience is clean and simple to use, but bold and striking at the same time, with its strategically designed rental pages that showcase a range of large and visually pleasing imagery.
When it was built from the ground up, the first generation of hosts were given access to free professional photography as part of the original Airbnb marketing strategy. Images and copy that are both strategically placed and enticing are two essential factors in creating a successful short-term rental listing. Along with a no-fuss payment system built into the website, host profiles, and an intricate review process, the website was an instant hit with travellers. It crafts a personalised connection between its users and hosts, who could learn about their Airbnb and its owner prior to booking and leave their own feedback once their stay was complete.
The company makes the bulk of its money by taking a percentage of each booking, utilising a simple but effective process. While other large hospitality companies have a myriad of expenses both on and offline, the only resource that Airbnb needs to offer its customers is the technological requirements and features of the platform used to list its properties. This means they can adapt easily and efficiently to crises such as the Covid-19 pandemic, along with current travel trends and technological advancements, becoming more efficient as technology continues to evolve.
Hosts are responsible for their listings, along with the marketing, cleaning, and maintenance involved in having a short-term rental. While this can be demanding, with the right time and effort, the rewards can be abundant for property owners. A short-term property management company like The Stay Hub can help you get one step ahead of the already vast number of listings on Airbnb, taking away the grunt work and time involved in creating a successful short-term rental that brings in optimal returns.
At The Stay Hub, we offer a full range of services, from global marketing to cleaning, inspections, maintenance, professional styling, and managing the full customer experience with a team of professionals available around the clock.
We'd love to give you a free rental appraisal so you can learn what you could earn!
The Stay Hub offers a FREE assessment service for property owners who are interested in finding out how much they can earn in the short-term rental market. Fill in our property assessment form and we will organise a time for one of our experts to assess your property. In most cases, this will be done in person with a visit to your property. We will then put together an appraisal with your property's short-term rental value.