Can you believe there was a time when staying in a hotel was often the only option for many travellers? Oh those times, before COVID-19 when travelling was still easy! Back before the sharing economy was a thing and Airbnb, like Uber, was just a scrappy startup, that would later shake up how we travel.
When Airbnb launched in 2008 as airbedandbreakfast.com, no one could predict how it would change the travel market, so dramatically. Back in those days, it was not common to rent from a private individual for short stays. For many at the time, this felt odd and risky, as this 2008 CNET article about airbedandbreakfast.com shows, oh how attitudes have changed!
Airbnb founders, Brian Chesky, Nathan Blecharczyk and Joe Gebbia, learned many investors felt the same way about this concept. In all fairness, it didn’t help that the original service was a host providing a mattress in a room and maybe breakfast, as the domain name suggested.
While renting rooms with air mattresses for short stays was a novel way for some young men to make money fast, it wasn’t really a product that could compete with hotels.
The path to Airbnb we know today
In 2009, the company listened to investors and revised their strategy. Accordingly, the company removed much of the air mattress/couch surfing aspects from the product and rebranded as Airbnb. While the live-in host section of Airbnb stayed, they began to focus more on listings with absent hosts. This allowed it to compete with hotels more directly. Guests had the premises to their selves, while also enjoying the homeliness that a hotel stay rarely can offer. As a result, investors came and the company grew. By 2011, the service was in nearly 90 countries worldwide. Furthermore, it passed it’s 1 million nights booked milestone.
Fast forward to today, 500 million guests have already used Airbnb, with 6 million listings across 100 thousand cities and more than 190 countries. In addition, the company has diversified its services, such as the introduction of Airbnb Experiences and even agree to acquire Hotel Tonight, furthering its agenda to become an end-to-end travel platform.
How Airbnb works
As mentioned, Airbnb is trying to diversify, though, right now, it’s primary know for its listing website and app. The website has been around since its inception and the App was launched in 2012 for Android and later for iOS. Let’s look at how this works.
1. Signing up
Users and hosts can sign up by making an account with Airbnb itself or by logging with Facebook or Google or Amex account. Furthermore, User’s don’t need to pay any fee’s to sign up. All that is needed, is to fill out some personal details and upload or import a photo form social media. In addition, you can also register your payment details for speeder booking later on. Once this is all done, you verify your account by SMS or Email and that’s it. Once this is all done, it’s basically a 3 click booking, thereafter.
For Hosts: There is an additional setup screen to list their property or properties. As expected, they are asked questions about the property, amenities and what they offer guests. Of course, they are expected to add photos and write about their property and themselves. Over the years Airbnb also introduced various ways to verify hosts and tackle scam-listings.
Nothing too groundbreaking here, their website and app work similar to any hotel search engine. Just select a room, book and pay. The main difference is there are three primary types of listings which potential guests can choose from, which are:
Shared room – sharing with a room only with another unknown guest. The host may or may not be onsite.
Private Room – This is (you guessed it) a private room, in a property where the host or other guests also are staying onsite.
Entire Place – as the name suggests, the entire property is just for the guests in your booking to use. Often it’s the host’s home, left vacant for the guests. In other cases, it may be their second home or one part of a corporate property portfolio.
In the early days, it was mandatory for guests to contact hosts and write a request to stay, before booking. While this option is still available for hosts, direct booking without making contact is now possible. That said, guest’s can always contact hosts to ask questions both before and after booking. However, it’s against company policy for hosts and guests to talk outside the Airbnb platform.
Of course with the exception being arrival day, as using the app may not be practical. It should be noted, that host’s who insist speaking on a third party app throughout booking should be avoided, as this indicative of a scam.
4. The Stay and Check-in/Out process
The host or a trusted person tends to either check guests in at a set time or else leave a key in a drop box or provides the guests key codes to access the property.
Similarly, the host or a contact person will help with any queries during the stay. Furthermore, some hosts provide cleaning and provide food, while other’s let guests look after themselves. Check out works similar to check in, just in reverse. Some degree of tidying is custom upon checkout, even if cleaning is offered.
5. The Review and Reputation
This is part that makes or breaks guests and hosts. It also the part of Airbnb that gives user’s trust in each other. If a conflict arises, Airbnb recommends trying to work amongst each other first or failing that via Airbnb dispute resolution centre, before posting. Conversely, a host will want plenty of outstanding reviews as this gets them closer to ‘Super Host’ status, comparable to getting 5* in the hotel industry.
Airbnb and Technology
For hosting, Amazon Web Services (AWS) is the powerhouse behind, using services like S3, EC2 and RDS to help keep their online services going. Meanwhile, it’s data is managed by Presto, Druid and Airpal. As one can imagine, a company like Airbnb deals with huge amounts of user data, so storing this correctly is paramount.
The future of Airbnb
As mentioned Airbnb is diversifying into other areas like providing experiences and moving towards listing hotels. The core product itself, however, does not seem to be slowing down despite objections from both national and local governments around the world.
The platform faced criticism for driving up rents and undercutting local hotels. Many cities around the world, particularly in Europe and North America have introduced new laws for Airbnb and similar providers. Local government in places like New York City are using obscure building codes to control the short stay rental market in their cities.
While other cities like Los Angelas and Amsterdam, have restrictions on many days the host can list on Airbnb, per year. Some Airbnb hosts have attempted to circumvent local laws by asking guests to not declare they are from Airbnb. Furthermore, in some cases, this has resulted in evictions of guests and fines placed on hosts, with even police being sent to properties.
Meanwhile, Airbnb said in the past, it wants to work with cities to find a solution for their concerns, meanwhile, it’s still being accused of being at war with local governments. Despite these conflicts, Airbnb is growing and cutting into the profits of hotels, especially those part of a chain.
Recently the company introduced ‘Airbnb’ Luxe to target people who would normally stay in 5* hotels but want a unique experience, instead of the same old chain hotel experience. This service offers services like a concierge-like feature included in the price, to work one and one with the guest. Additionally, properties and hosts have to meet stringent requirements to be accepted into the programme.
Airbnb is also seeing an uptake in it’s ‘experiences’, which sets out to compete with traditional tour operators and search engines. Now it’s launching multi-day ‘experiences’, which really will help it compete with the likes of TripAdvisor Trip booking service and Viator. As the company expands, many expect Airbnb to launch an IPO or a direct listing this year. Just as other ‘tech unicorn‘ companies have like Uber and Spotify and Slack have.
Airbnb had an exciting decade, it revolutionised travel forever. While it may be hitting some speed bumps in the form of government intervention, it is fighting back, while making sure that it doesn’t have its eggs all in one basket.
It is hard to know if it will shake the travel industry in the same it did in the past decade, but only time will tell. However, with talk of going public, it is looking good. If we hear any more on that, be certain to give you our take on it. For now, why not check out our website to read the latest developments in tech.