Let’s us discuss what is Airbnb is all about ??
Airbnb is an online marketplace which directly connects travelers with local hosts. On one side, this sharing platform enables local hosts to list their available space in their property and earn extra income in the form of rent. On the other, Airbnb enables travelers to book unique home stays from local hosts, saving more money and giving them a chance to interact with locals and also it is plus point because they know more about the local place.
Catering to the on demand travel industry, Airbnb is present in around 190 countries across the globe.
Value Propositions is another topic to talk about
First of all it enables owners to list their available space in their property on the platform and earn rental money.
Secondly Airbnb provides insurance to already listed properties on the platform.
Next it provides more cheaper options to travelers to stay with local hosts.
It also facilitates the process of booking living space for travelers.
Additionally there is integrated system for Rating and review system for hosts and guests.User-friendly app and web based structure increased it importance.This application useful
for easy payment modes.
Let’s Discuss about how Airbnb Business Model Canvas Works
The business model canvas of Airbnb explains about the key partners, key activities, key resources, value propositions, customer relations, channels and customer segments of Airbnb. Along with this,additionally there is the cost structure and revenue streams of Airbnb have also been listed.
Let’s take a tour how this Airbnb works:
Hosts list out their property details which they want to give on Airbnb along with other factors like pricing, amenities provided etc.Airbnb sends a professional photographer (if available) to the property location in order to take high quality photographs of the space.Travellers search for a property in the city where they wish to stay and browse available options according to price,space, amenities etc.
Booking is made through Airbnb platform where traveller pays the amount mentioned by host and some additional money as transaction charges.Host approves the booking on the Airbnb system. Traveller stays in the Airbnb booked room and finally Airbnb pays the amount to the host after deducting their commission.The host and the traveler can rate and review each other based on their experiance.
Revenue model: To Understand How Airbnb makes money in the sharing sharing economy.
One of the keen feature of Airbnb is to offers free listings to property owners and let’s travellers browse the listed spaces and select the one which best suits their needs and which is good for them financially on the platform. The business model of Airbnb is such that the booking and monetary transactions are easilly done on Airbnb’s platform. This is from where the company earns its share of revenue from 2 different sources which have been explained below:
Commission taken from Property Owners which is hosts.
Airbnb charges flat 10% commission from hosts on each and every booking done through the platform.
Transaction fee from Travellers which is guests.
Airbnb charges 3% of the booking amount as transaction charges from each travellers upon every confirmed booking.
How to target the Customers using Airbnb.
A customer for Airbnb is the one who adds some value to the company’s revenue. He can be a host who offers his vacant space in his room for rent and lists it on the platform or he can be a traveler who books a space or which satisfies it need. It is interesting to know from where does Airbnb find hosts and travellers? Well, Airbnb was founded in year 2008 and its first customers came through a simple user interface which iswebsite built by the owners.
Since then Airbnb has grown around 1.2 Million listings on the platform. The major sources to accumulate hosts and travelers include:
Social Media : which is a connection of the millions of users.
Through Word of Mouth.
Digital Marketing including Internet ads which is used to promote these sites.
Promotional offers are another source for the popularity of this Airbnb model.
Affiliate Model / Refer and earn offers.
Some Key problems to Tackle and their efficent Solutions:
The biggest problem which is particularly faced by travelers or hosts using Airbnb is the trust factor.
After all giving your space to a stranger as a host and living with strangers at their ow place as a traveler might not be easy.
But the verification process is in place for each and every host and traveler on its platform. Apart from the verification process,
Airbnb also motivates people to sign up with their Facebook account or at least link it with their account for better transparency of system.But this is not all with this system.There are some more factors which going to be taken in consideration which is In case something goes wrong,
an insurance policy is available too for the owner.
Another problem being faced by the company is the retention problem. In order to expand their business, the company needs to retain its travelers so that they do not choose a hotel on their next vacations they choose company’s home for their place In order to retain them, it gives offers, promotional codes,discounts and some extra credits to frequent travelers.
Solution to this problem,is that it also sends such promotions to hosts as to motivate them to take a vacation and stay in an Airbnb at their favourite destination.
In the last of this article let’s discuss what is The Future Of Sharing Means You’ll Never Have To Buy Anything Ever Again.
According to me the sharing economy model will continue to expand and evolve with newer technologies like Artificial Intelligence and Deep Learning. Smartphone apps, especially, will see significant growth in relation to sharing economy platforms because they are simpler and cheaper than the other platforms.
For those who is already present in the vacation rental business, it will be increasingly vital to pay a special attention to the way their properties are presented. Pictures and features for vacation rental homes should be optimized for mobile app presentation to stay as competitive as possible because with the passage new startups. come it this field with some uniquess.
So be alive in the industry it is important to continuously update your system .Additionally, I see this type of collaborative consumption growing into different sectors like in automobiles and in hotels.
Those who have an excess use of these services are finding ways to share their resources. Homeowners may even discover ways to Wi-Fi sharing and electricity sharing into their vacation rentals for the cost effectiveness.Finally, according to me this model of collaborative goods and services will breakthrough for new one out into newer markets around the globe, specifically for the developing asian countries like China and India. These countries, which are experiencing massive growth in industry and tourism, are primed for vacation and home rental sharing services
like Airbnb and the other rental services. For potential property owners, these spots may be a top investment potential.
Coming to some More important advantages or we called it future of the rental vacation services, people are more likely to buy from people they have a connection with. Showing transparency in what you’re offering and creating a nice story people want to be a part of it will add to the likelihood that they will choose to rent from you only over competitors with less personal messages.I also stresses the importance of powerful content in the sharing economy online marketplace. Interacting and completing transactions between private individuals needs to be driven by content that is original, touching ,compelling also that attracts the new one to your property. That way, the product
you’re offering coming out and stands among the thousands of others house owners or others who have joined in on this online method of generating income.
Finally, I stresses that social media will continue to play a big role in the future of the sharing economy business model because in today’s almost all the people connected with this network. With the rise of various platforms for social media sharing, more users are driving organic content and sharing stories
with their friends and followers. This may also help push or to make popular shared services and goods further beyond the traditional means of ordering and