People from different nations make it a point to travel on a tight budget. In addition, they search for options to improve their flexibility and get a more significant benefit for their investment. Thus, apps like Airbnb have gained notoriety as a platform for renting out leading houses to tourists as lodging in the last several years.

Did you know? People can use this site to rent their homes to generate extra revenue. Travelers can also benefit from the cozy atmosphere that hotels lack. With the idea of letting people stay in other people’s homes, Airbnb has grown into a billion-dollar business.

But is it worthwhile to run an Airbnb?

A peer-to-peer marketplace called Airbnb charges hosts and visitors a service fee ranging from 5% to 15% of the total booking price. By charging an average of 13% on an average booking value of $156, Airbnb made $6 billion in service fees in 2021.

How?

To understand and build an app like Airbnb, let us have a look at the business and revenue model:

Business Model of Airbnb

The Airbnb business model exemplifies the sharing economy, which the firm views as a community based on sharing. In that situation, the sharing economy sector enables people to increase the value of idle or underutilized assets in their lodging areas.

The main selling point of the Airbnb business model is the opportunity to give tourists a taste of local life. Here are a few ideas that accurately summarize the Airbnb business strategy and can help you grow your own company.

• The hosts initially post their houses on the site, including information about the facilities and costs.
• Thereafter, Airbnb dispatched a skilled photographer to the location to capture stunning pictures of the home.
• Then they look at the prices and facilities offered after finding the houses in the cities or locations they want to visit.
• Bookings are also made through the Airbnb app, where guests pay the amount specified by the host plus additional processing fees.
• After the visitor confirms their reservation, the host authorizes the booking, and Airbnb pays the rent or other sum to the hosts after subtracting their commission.

Additionally, Airbnb maintains a section for ratings and reviews. Here, the tourist and the host may rate one another, improving the app’s user interface. You can hire on-demand app development services for the same.

Revenue Model of Airbnb

The performance of Airbnb demonstrates how well its business concept and revenue model align. After looking through the business model, it must have been evident that bookings and financial transactions happen on Airbnb’s site. The corporation generates its portion of the income during this synchronization.

Airbnb’s primary sources of income are as follows:

• Commission from Hosts:

This cost ranges between 3 and 5% of the rent paid. Hosts can offer their houses free, and Airbnb deducts a percentage from each booking. The commission is 20% for hosts who provide experiences (events and activities).

• Fees from Visitors:

As for processing fees, Airbnb deducts 0% to 20% of the total booking cost. Each reservation comes with this fee, which varies depending on the courses taken. It is important to note that compared to Uber for short-term rentals, Airbnb is presently a multimillion-dollar business. Further, despite the presence of several rivals in the market, none has come close to overtaking it.

Build an App like Airbnb with Zimble Code!

To become the billion-dollar company as it is today, Airbnb has gone a long way. The first stop on its voyage was AirBed and Breakfast. Over the past few years, this business platform has seen constant evolution. Since the website was the only way to make reservations, it continuously updated its business strategy. But now that they have applications, it is much easier for folks worldwide.

On-Demand App Development companies in the USA receive more and more projects in this manner from various industries as the use and availability of applications grow. On the other hand, businesses are turning to them because the cost of developing mobile applications has significantly decreased.

People now find it much simpler to find economical lodging as it offers prices that are less expensive than those of hotels. On this site, most visitors openly declare that they use Airbnb to save money. Well, the increasing number of bookings on this site clearly indicates that it is time to seek the assistance of the best mobile app development company in the USA and get your app started.