Airbnb, Inc., headquartered in San Francisco, operates a global online marketplace and hospitality service accessible via its websites and mobile apps. Members can use the service to arrange or offer lodging, primarily homestays, or tourism experiences. The company does not own any of the real estate listings, nor does it host events; as a broker, it receives commissions from every booking.
|Privately held company|
|Founded||August 2008San Francisco, Californiain|
|Headquarters||888 Brannan Street, |
San Francisco, California
Peer-to-peer property rental
|Revenue||$2.6 billion (2017)|
|$450 million (2017)|
|$93 million (2017)|
Number of employees
|Subsidiaries||Luxury Retreats International Inc.|
Deco Software Inc.
Trip4real Experiences, S.L.
Airbnb Uk Limited
|Footnotes / references|
The company's name is a shortened version of its original name, AirBedandBreakfast.com; the company got its start after its founders put an air mattress in their living room and turned their apartment into a bed and breakfast.
Guests can search for lodging using filters such as lodging type, dates, location, and price. Before booking, users must provide personal and payment information. Some hosts also require guests to go through the "Verified ID" identity verification system, which requires three layers of customer identification: telephone, photo of ID (such as passport or driver's license), and verification of Facebook, LinkedIn or Google+ account. The company also provides travel guides, entitled "Neighborhoods", which provide details about staying in specific neighborhoods in various major cities.
On certain of its websites, such as its mobile websites in the United States, Airbnb uses drip pricing; when customers search for lodging, Airbnb displays per-night prices that exclude its service fees and cleaning fees and the total charges are not revealed until later in the booking process. On some of its websites, such as its desktop websites and mobile websites in Australia and the European Union countries, Airbnb shows the total amount including all fees at every stage of the booking process.
Hosts provide prices and other details for their rental or event listings. Pricing is determined by the host, with recommendations from Airbnb. Hosts may be required to report income and pay income taxes on income received via Airbnb. In the United States, homeowners who refinance their mortgages with some agencies are able to count income they earn from Airbnb rentals on their refinance loan applications.
Legality of hosting
Some jurisdictions have restrictions on subletting for a short period of time and regulate lodging rental companies such as Airbnb. Airbnb has published a list of regulations and requirements for cities in the United States. For examples of such regulations by jurisdiction, see Lodging#Regulation of commercial lodging. The hotel industry, particularly the American Hotel and Lodging Association, has lobbied governments asserting that the hotel industry is subject to unfair competition from Airbnb. These lobbying efforts have resulted in additional regulations being imposed on the company and its hosts. In some cities, collection of a transient occupancy tax by Airbnb is required. In many cities, hosts must register with the government and obtain a permit or license.
Landlords or community associations may have restrictions on short-term sublets. In some jurisdictions, landlord–tenant law limits the rights of tenants who sublet in violation of their leases. To entice landlords and homeowners associations to be more accommodating in allowing their tenants and residents to sublet via Airbnb, Airbnb has a program in which landlords and homeowners associations can receive a portion of the profit generated from Airbnb.
In January 2018, a federal court in the United States ruled that Airbnb is not responsible for illegal sublets by tenants. The court defended Airbnb under Section 230 of the Communications Decency Act which does not hold Internet based services liable for the actions of their users.
Founder Joe Gebbia has said that Airbnb is specifically "designed for trust" and provides a variety of safety mechanisms, including US$1,000,000 of secondary insurance, which covers property damage by guests due to vandalism and/or theft, and connection to multiple social media channels such as Facebook, which allows hosts and guests to see if they have common friends.
Shortly after moving to San Francisco in October 2007, roommates and former schoolmates Brian Chesky and Joe Gebbia could not afford the rent for their loft apartment. Chesky and Gebbia came up with the idea of putting an air mattress in their living room and turning it into a bed and breakfast. The goal at first was just "to make a few bucks". In February 2008, Nathan Blecharczyk, Chesky's former roommate, joined as the Chief Technology Officer and the third co-founder of the new venture, which they named AirBed & Breakfast. They put together a website which offered short-term living quarters, breakfast, and a unique business networking opportunity for those who were unable to book a hotel in the saturated market. The site Airbedandbreakfast.com officially launched on August 11, 2008. The founders had their first customers in town in the summer of 2008, during the Industrial Design Conference held by Industrial Designers Society of America, where travelers had a hard time finding lodging in the city.
To help fund the site, the founders created special edition breakfast cereals, with presidential candidates Barack Obama and John McCain as the inspiration for "Obama O's" and "Cap'n McCains". In two months, 800 boxes of cereal were sold at $40 each, which generated more than $30,000 for the company's incubation. It also got the company noticed by computer programmer Paul Graham, who invited the founders to the January 2009 winter training session of his startup incubator, Y Combinator, which provided them with training and $20,000 in funding in exchange for a small interest in the company. With the website already built, they used the $20,000 Y-Combinator investment to fly to New York City to meet users and promote the site. They returned to San Francisco with a profitable business model to present to West Coast investors. By March 2009, the site had 10,000 users and 2,500 listings.
In March 2009, the name of the company was shortened to Airbnb.com, and the site's content had expanded from air beds and shared spaces to a variety of properties including entire homes and apartments, private rooms, castles, boats, manors, tree houses, tipis, igloos, private islands and other properties.
One year later, there were 15 people working from Chesky and Gebbia's loft apartment on Rausch Street in San Francisco. To make room for employees, Brian Chesky gave up his bedroom and lived at lodging booked via the Airbnb service until the company moved into its first office space. In April 2009, the company received $600,000 in seed money from Sequoia Capital and, in November 2010, raised $7.2 million in financing from Greylock Partners and, again, from Sequoia Capital, in a Series A round, then announcing that out of 700,000 nights booked, 80% had occurred in the previous six months.
In February 2011, Airbnb announced its 1,000,000th night booked. In January 2012, the company announced its 5,000,000th night booked. In June 2012, Airbnb announced its 10,000,000th night booked, doubling business in the previous five months. Of these bookings, 75% of the business came from markets outside of the continental United States.
In mid-2011, Airbnb began offering US$50,000 of secondary insurance, called its "host guarantee", which covers property damage due to vandalism and theft. In May 2012, the company increased the amount to US$1,000,000.
Due to the growth of international end-users, in early 2012, Airbnb opened offices in Paris, Milan, Barcelona, Copenhagen, Moscow, and São Paulo. These openings were in addition to existing offices in San Francisco, London, Hamburg, and Berlin. In September 2013, the company announced that it would establish its European headquarters in Dublin. Prior to the 2012 Summer Olympics, Airbnb acquired London-based rival CrashPadder, subsequently adding 6,000 international listings to its existing inventory. This acquisition made Airbnb the largest lodging website in the United Kingdom.
In November 2012, Airbnb opened an office in Sydney, Australia, its 11th office location, and announced plans to launch the service in Thailand and Indonesia. In December 2012, Airbnb announced its strategy to move more aggressively into the Asian market with the launch of an office in Singapore.
In November 2012, Airbnb acquired NabeWise, a city guide that aggregates curated information for specified locations. The acquisition shifted the company focus toward offering hyperlocal recommendations to travelers. Also in November 2012, Airbnb launched "Neighborhoods", a travel guide of 23 cities that provides in-depth information via collaborative filtering to help travelers choose a neighborhood in which to stay based on criteria such as public transportation, dining, peace & quiet, nightlife, tourist attractions, and shopping.
In December 2012, Airbnb announced the acquisition of Localmind. Localmind is a location-based question and answer platform that allows users to post questions about specific locations online. These questions are then answered in real-time by experts on the specified territories.
By October 2013, Airbnb had served 9,000,000 guests since its founding in August 2008, and in December 2013, the company reported it had over 6,000,000 new guests in 2013, and nearly 250,000 properties were added in 2013.
In July 2014, Airbnb revealed design revisions to the site and mobile app and introduced a new logo. Some considered the new logo to be visually similar to genitalia, but a consumer survey by Survata showed only a minority of respondents thought this was the case.
In the summer of 2016, at the request of three members of the United States Senate, the Federal Trade Commission began investigating how Airbnb affected housing costs. In October 2016, New York Governor Andrew Cuomo signed a bill charging Airbnb fines for violations of local housing laws. The New York Times reported that these events were related and part of a "plan that the hotel association started in early 2016 to thwart Airbnb".
In February 2018, Brian Chesky said that the company is considering launching an airline.
In February 2018, the company announced Airbnb Plus, a collection of homes that have been vetted for quality of services, comfort and design, as well as Beyond by Airbnb, which offers luxury vacation rentals.
Airbnb has offices in the following 21 cities:
In November 2010, it raised $7.2 million in a financing round led by Greylock Partners. In July 2011, it raised $112 million in financing led by Andreessen Horowitz. Other early investors included Digital Sky Technologies, General Catalyst Partners, and A Grade Investments partners Ashton Kutcher and Guy Oseary.
In April 2014, the company closed on an investment of US$450 million by TPG Capital at a company valuation of approximately US$10 billion. Additional funding was provided by Andreessen Horowitz, Sequoia Capital, Dragoneer Investment Group, T. Rowe Price and Sherpa Capital.
In June 2015, Airbnb raised US$1.5 billion in a Series E funding led by General Atlantic, and joined by Hillhouse Capital Group, Tiger Management, Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital, and Horizons Ventures.
In March 2017, Airbnb raised US$1 billion in funding, bringing total funding raised to more than US$3 billion and valuing the company at US$31 billion.
For the third quarter 2018 the company announced revenue of more than $1 billion.
In November 2012, Airbnb partnered with New York City Mayor Michael Bloomberg to offer free housing for people displaced by Hurricane Sandy. Airbnb built a microsite, where victims registered for housing and property owners offered free housing. Service fees were waived, while the host guarantee was maintained.
In 2013, Airbnb launched its Global Citizenship Champion program in cities where its offices are located.
In January 2017, the company offered free housing to refugees and any others not allowed into the United States as a result of Donald Trump’s Executive Order 13769, which temporarily banned refugees from the United States.
In June 2017, Airbnb launched Open Homes, to connect hosts offering free or low-cost housing to uprooted people, such as refugees and those fleeing natural disasters.
All employees receive four hours of paid time off each month to volunteer in their local communities, resulting in "11,000 hours of service to 250 projects worldwide" in 2018, according to the company.
Fair housing implications and discrimination
In July 2016, former Attorney General Eric Holder was hired to help craft an anti-discrimination policy for Airbnb after the company faced many complaints related to racism, including a study by Harvard Business School that showed widespread discrimination by hosts against guests whose names suggested that they were black.
Objectivity of guest review system
Airbnb features a review system in which guests and hosts can rate each other after a stay. Hosts and guests are unable to see reviews until both have submitted a review or until the window to review has closed, a system which aims to improve accuracy and objectivity by removing fears that users will receive a negative review in retaliation if they write one. However, the truthfulness and impartiality of reviews may be adversely affected by concerns of future stays because prospective hosts may refuse to host a user who generally leaves negative reviews. In addition, the company's policy requires users to forego anonymity, which may also detract from users' willingness to leave negative reviews. These factors may damage the objectivity of the review system.
Airbnb is criticized for its impact on housing affordability, sparking protests, and for its related data management. As of the beginning of 2018, several studies found that rental prices in many areas increased due to Airbnb, as landlords kept properties off the longer-term rental market and instead get higher rental rates for short-term housing via Airbnb. Landlords have been accused of illegally evicting tenants in order to convert properties into Airbnb listings. In San Francisco, the issue led to protests in November 2015.
A study published in 2017 found that increasing Airbnb listings in a given neighborhood by 10% leads to a 0.42% increase in rents and a 0.76% increase in house prices. According to an analysis conducted in 2016, while commercial listings comprised only 10% of Airbnb's total listings in 25 largest U. S. markets for the period between June 2015 and May 2016, they constituted about a third of host revenue. In markets such as Los Angeles and Portland, Oregon, the share of revenue from commercial listings reached nearly 50%.
Use of double Irish arrangement
Fraudulent hosts and Airbnb loopholes
In 2017, travel blogger Asher Fergusson analyzed 1,021 negative experiences by guests. He found that there are ways for hosts to use fake information to circumvent Airbnb's background checks. He noted several reported incidents including last minute cancellations, moldy or rodent-infested lodging, theft, invasion of privacy, and even rape and murder. Airbnb responded that the 1,021 incidents are statistically insignificant compared to 260 million check-ins at the time and that the company tries to remedy any problems.
Unite the Right rally booking cancellations
In August 2017, Airbnb cancelled numerous bookings and closed accounts belonging to attendees of the white nationalist Unite the Right rally in Charlottesville, Virginia, citing its terms of service in which members must "accept people regardless of their race, religion, national origin, ethnicity, disability, sex, gender identity, sexual orientation, or age." The move was criticized by Jason Kessler, organizer of the rally.
Delisting of West Bank settlements
In 2018, Airbnb announced that it will remove the approximately 200 "listings in Israeli settlements in the occupied West Bank that are at the core of the dispute between Israelis and Palestinians". Listings in Israeli settlements in East Jerusalem or the Golan Heights were not affected. The move was praised by the Boycott, Divestment and Sanctions movement, Palestinians, Human Rights Watch, and Amnesty International. The move was criticized by the Israeli Tourism Minister and the Simon Wiesenthal Center, which decried the move as antisemitism. A class action suit in the Jerusalem district court alleging discrimination based on place of residence was filed against Airbnb by affected property owners.
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