Journey from Air Mattresses to a Global Phenomenon.

In 2008, founders Brian Chesky and Joe Gebbia rented out air mattresses in their apartment during a design conference in San Francisco. Later, Nathan Blecharczyk joined and co-founded a peer-to-peer room and home rental company with Joe & Brian in 2008.This marked the beginning of Airbnb, originally named "Air Bed & Breakfast." Over the years, it evolved into a global hospitality platform connecting hosts and travellers worldwide.

1.?Business Model- Airbnb operates on a platform business model. It charges guests a service fee (between 5% and 15% of the reservation) and collects a commission from hosts (generally 3%). For instance, on a $100 booking per night, Airbnb might make as much as $15, split between host and guest fees.

2. Revenue Insights: How Airbnb Makes Money ?- As a two-sided marketplace, Airbnb generates revenue by charging fees when transactions occur. In 2022, Airbnb generated $8.4 billion in transaction revenue, with an average take rate of 13.3%.

3. Unit Economics- Airbnb's unit economics involve collecting fees from both hosts and guests. For example, from a $100 booking per night set by the host, Airbnb might collect $3 as a hosting fee and charge the guest $116 ($16 above the host's price) to collect its guest fees of $12 and taxes. In 2022, Airbnb generated $63.2 billion in gross booking value, with an average revenue per booking of $161.

4. Key Metrics: Nights and Experiences Booked- Airbnb uses two key metrics to measure performance: Nights and Experiences Booked and Gross Booking Value. In Q1 2023, Nights and Experiences grew to $121.1 million, an 18.6% increase, while Gross Booking Value also increased by 18.6% to reach $20.4 billion.

5. Business Segments: Airbnb Around the World- Airbnb breaks down its revenue by geography into four regions: North America, Europe, the Middle East, and Africa, Latin America, and Asia Pacific.

6. Recent Developments: Airbnb's Summer Release- On May 3, 2023, Airbnb unveiled its "Summer Release," which includes exciting features such as Airbnb Rooms, designed to offer affordable travel with an average nightly cost of $67. Other enhancements include the Host Passport, total price display, new pricing tools for hosts, transparent checkout instructions, increased payment flexibility, and more affordable monthly stays.

7. The airbnb ecosystem in India- India is an exciting new market, with 1,000 employees onboard, and it's believed to be one of the biggest growth markets. What is exciting about India is its robust culture of hospitality. A unique aspect of Indian culture will only help to further business growth in the country.

That's all for this edition of the Airbnb Newsletter. stay tuned for our next newsletter, where we'll continue to uncover the fascinating aspects of this dynamic platform. Until then, remember, with Airbnb, you can truly "Belong Anywhere."

Safe travels & Happy hosting!

Warm regards,?

Gunnreet Kaur?

(Content Lead)