Airbnb: an aggregator business model in lodging
A created opportunity turned into a platform business model that competes with hotels without owning any rooms.
- Sector
- Travel and accommodation platform
- Source
- Tutorial 2 resource
The case in brief
Airbnb was started in 2008 by Brian Chesky and Joe Gebbia, two friends who struggled to pay their rent and had a spare room. They rented out a mattress, marketed it offline and later added breakfast. They also sold 800 cereal boxes for around $40 each during the presidential campaign and reinvested the money in the business.
Airbnb is a marketplace where travellers stay at properties listed by local hosts. The case describes it as an aggregator business model: a network model that makes providers its partners and sells their services under its own brand, earning commission without owning inventory. Instead of buying hotels, it connects demand and supply — one reason the case gives for its rapid growth.
The company expanded from its San Francisco headquarters through international offices from 2011 (including Hamburg, via the acquisition of rival Accoleo), partnerships and new services such as Business Travel Ready (2015) and Airbnb Plus (2018). According to the case it operates in more than 190 countries and over 34,000 cities, had more than 5.6 million listings by the end of 2020 and has served over 800 million guests.
Key facts
- Founded
- 2008, by Brian Chesky and Joe Gebbia (as airbedandbreakfast.com; airbnb.com the next year)
- Headquarters
- San Francisco, California
- Business model
- Aggregator (asset-light, commission-based)
- Reach (per case)
- 190+ countries, 34,000+ cities, 150 million+ users
- Listings (per case)
- 1.9 million+ bookable at any time (undated, alongside the 150 million+ users figure); 250,000 in 2013; over 5.6 million by the end of 2020
- Host commission
- Flat 10% plus 1% extra processing charge (elsewhere, in a passage on lower commissions for boutique hotels, the case says Airbnb takes only 3–5% from hosts)
- Guest service fee
- Up to 20% of the booking total, non-refundable
- Other revenue
- Airbnbmag ($15, with Hearst); business travel; 20% commission on Airbnb Services
- Languages
- Website in 62 languages as of 2019
- 2015 floating house stunt (London)
- 340 UK press pieces, 10,000 new users, 200 million+ social impressions
Analysis through module theory
Created opportunity (Zucchella, Hagen and Serapio, 2018)
Tutorial 2 treats Airbnb as a created opportunity: the founders’ own actions produced a new way of booking accommodation — “booking unique homes and experiencing a city like a local resident” — rather than responding to an outside shift. Later entrants such as CitizenM then filled gaps that Airbnb had created.
Business Model Canvas
The innovation sits mostly on the left of the canvas and in revenue: partners (hosts, photographers, cleaning services, SiteMinder) replace owned rooms, key resources are the platform, brand and review data, and revenue comes from commissions and service fees from both sides of the market.
Innovation type
This is business model (revenue model) innovation: Airbnb changed how value is created, delivered and captured in lodging. It is not primarily product innovation — the room itself already existed — nor process innovation inside an existing hotel operation.
Dynamic capabilities (Teece, 2007)
Sensing: spotting growth in Australia. Seizing: opening international offices and acquiring Accoleo to enter Europe. Transforming: adding business travel, premium homes, hotel listings and 62 language versions to fit new customers.
Four framework strategies (Barringer & Ireland, 2019)
Its customer interface differs from Uber and Oyo: Airbnb relies on discoverability and elaborate two-way reviews rather than standardised service, which builds trust but leaves it without control over the quality of each stay.
Discussion questions
- 1.Which block of the canvas would a hotel chain find hardest to copy, and why?
- 2.Is Airbnb’s lack of control over quality a weakness or part of its value proposition?
- 3.Which of the four framework strategies best explains Airbnb’s international growth?
Takeaways
- An asset-light aggregator model lets a firm scale internationally by partnering rather than owning.
- Trust mechanisms (profiles, ratings, reviews) are a key resource in a two-sided marketplace.
- Business model innovation can reshape an industry even when the underlying product already exists.