Question

Describe how Airbnb company can make extra revenue from value added services rather than relying on fixed commission from host and guest ( 300-500 words no plagiarized content)

Answer 1

What is Airbnb?

Airbnb is a community based two-sided online marketplace that helps connect travelers with local hosts. What started as a problem for their founders when they could not pay rent, snowballed into this massive venture. They had built a simple website with a map offering mattresses and home-made breakfast. As more and more people started pouring in, they refined the website with money they earned from selling cereal boxes during the 2008 presidential campaign. The click rates improved too as the images of the rented space kept getting better.

Airbnb Business Model

Airbnb utilises a Aggregator Business Model, like Uber or the Indian company Oyo Rooms. It does not have a linear business model like the traditional hotel chains such as Marriott, Hilton etc. The traditional hotel businesses have to invest millions in building and maintaining their properties. Airbnb’s key resources are people and therefore does not have to do any of that. This enables it to grow incredibly fast at zero marginal cost.

People can list their available space on the platform and earn extra money from what they get as rent for their properties. As a platform, it also enables travelers to connect with local hosts and book home-stays instead of expensive hotels, saving them money and letting them “live like a local”. Personal profiles and rating/reviewing systems help travelers make an informed decision about the hosts and what is on offer. Hosts too can choose who to rent out their space to. These help to build trust and reputation in the community.

Besides the travelers and hosts, Airbnb business model also includes a huge network of freelance photographers in all major cities of the world. They visit a property and get high-definition photographs of the property. These high-definition photographs improve the click-rate and help in getting more responses. Airbnb pays these photographers directly.

Additional Value Added Services to Sell to Guests :-

Airbnb, renting your property is the job, but not only the way of making money with Airbnb. In fact, you could also tack on additional value added services to your listing that could increase the profits that you make from every booking. Here is how you sell additional services to make more money with Airbnb.

Guided tours :- Most tourists will likely end up paying for local guided tours once they arrive in your area so why not offer your Airbnb guests tickets for a tour? By including a guided tour in their stay, you can help them achieve something that was probably on their list of things to do already and make money with Airbnb in the process.

Motorcycle rental :- Make it easier for your guests to get around by providing bicycle or motorcycle rental as an additional service. The guests will likely need to rent some type of vehicle for the duration of their stay at your property. Bike or motorcycle rental is a popular option to make money on Airbnb for many hosts and it can significantly increase your earnings.

Airport pickup/dropoff :- Business and leisure travelers alike will appreciate the fact that you are making it convenient for them to get to and from their flights. The best part is that you don’t have to drive them yourself and you can simply charge them for the convenience. Use a local transportation service to arrange rides for your guests and just collect a fee for the convenience to make more money on Airbnb. Make sure that it is reasonably priced, otherwise, guests will prefer to call Uber or another car service.

Tickets to events :- Choose events that out of town guests probably won’t know about or something big that is going on in your area. By using tickets to events as a perk for booking a reservation, you can help guests to choose your place over the competition. You’ll also probably get a shoutout on social media for being the cool Airbnb host that made it all happen.

Cooked meals (breakfasts, lunch, dinners) :- Many Airbnb guests appreciate cooked meals, as well as, a stocked refrigerator when traveling with Airbnb. Offering food service as an additional option is perfect for guests who are willing to pay for convenience. If you are going to be preparing the meals as well, you’ll make even more money on Airbnb by including the time you’ll spend cooking and shopping for food as a part of the additional service cost.