You know of it, even if you haven’t stayed in it. Airbnb provides a platform for hosts to accommodate guests with short-term lodgings, in exact locations of their choice. From spare rooms to granny flats, to castles and unique homes.
The company do not own any of the accommodation, they make their money through commissions in each booking.
Founded in 2008 by Brian Chesky, Nathan Blecharczyk, Joe Gebbia.
Cash strapped ex students Brian and Joe came up with the idea after seeing the hotels were all full due to the huge industrial design conference in town. They purchased blow-up airbeds, to rent, on their apartment floor.
They rented the beds – and made breakfast- for $80 a night.
Good idea ?
Its is viewed by the hotel industry as a competitive threat. And they are out to stop them if they can.
Neighbours near to let properties often complain about noisy, uncaring customers staying.
Airbnb has been criticised for allegedly resulting in increased housing prices.There have been several reported scams – lodging that doesn’t exist, luxury priced lodgings that were switched to substandard lodgings at the last minute. The FBI have investigated numerous cases. London council refused to investigate a scam like this in Wandsworth Borough Council area.
However, the savings made staying in Airbnb can be considerable. The quirky location of some of the properties mean that so many hotels cant compete.
Good people –
In November 2012, Airbnb partnered with New York City Mayor to help house people displaced by Hurricane sandy. Service fees were waived, while the host guarantee was maintained.
In January 2017, the company offered free housing to refugees not allowed into the United States because of the start of Donald Trump’s executive order 13769 – temporarily banning refugees from the USA. Since the Taliban took control back in Afghanistan Airbnb have offered free accommodation to 20,000 afghan refugees.
It took two years for the company to get off the ground – they turned to funding loans and investment.
In jan 2009 the company received training and funding of $20,000 from computer programmer Paul Graham and his company Y Combinator in exchange for a small interest in the company. Wise move!
In April of that year the company received $600,000 from Sequoia Capital. November 2010 Airbnb raised $7.2 million in financing from Graylock partners. In September 2016 they raised funding of $555.5 million from Google Capital and TCV. In march 2017 they raised $1billion in further funding.
Location, Location, Location
In July 2011 they received investments from companies Digital sky technologies, and venture capital firm General Catalyst Partners. This allowed them to open their London office.
By 2012 they opened offices in San Francisco, Paris, Milan, Barcelona, Copenhagen, Moscow, Berlin, Hamburg and São Paulo.
By the end of that year they added Sydney and Singapore
Excitedly the Obama administration’s easing of US businesses operating in Cuba, in 2015, saw Airbnb become one the first US companies to do so.
At the time of writing, Airbnb has over 5.6 million listings, in over 220 countries. There are 4 million hosts.
During the start of the Covid pandemic bookings were down by as much as 96% in cities. However bookings rose in many rural areas.
The CEO wrote to all Airbnb hosts pledging millions to compensate for guests cancelling due to the pandemic.
They sent a memo to all employees however, announcing the redundancy of 1,900 employees – or about 25% of its entire workforce.
Acquisitions and Growth
Early on Airbnb acquired a German competitor, Accoleo.
They cleverly acquired a London based rival just before the London 2012 Olympics, adding not only 6,000 London properties but the monopoly of the UK lodging market at exactly the right time.
November 2012, Airbnb acquired NabeWise, an online city guide that curates information for specified locations. This move caused the whole company to shift to exact and very specific locations and requests. Further enhanced in December 2012, by Airbnb announcing the acquisition of Localmind, a location-based Q&A platform.
In 2017, the company acquired Luxury Retreats International, a Canadian-based villa rental company, and also Accomable; a small start company focusing on accessibility tourism.
During 2019, the company acquired HotelTonight, a website for booking last-minute hotel rooms, for over $400 million.
As you can see by raising funds at the right times, they have quite simply driven out or bought up all competitors.
Almagrove can help raise funds for your business or personal venture. Its easy straight forward and you can read all about it here.