Not every new business sees the kind of revolutionary growth that Airbnb has witnessed in its journey. Airbnb is a peer-peer vacation rental marketplace that connects guests with local hosts to rent a space and get homelike amenities depending on their needs and preferences. Today, Airbnb is present in over 81,000 cities across 191 counties across the globe. Not just that, it offers more than 5 million accommodations and unprecedented access to local experiences through thousands of activities run by local hosts. In the past decade, Airbnb has come a long way in terms of the number of users, reach, and revenue. When Airbnb was launched in 2008, it didn’t enjoy the popularity and reach it enjoys now. But, fast forward to 2020, it has 2.5 million rental listings and has already served over 260 million guests across the globe. It started quite small but has grown significantly then.
From a business perspective, these numbers are pretty impressive and inspire many businesses to enter into the industry. But with its unique business model, Airbnb is the biggest name in the hospitality industry. For the same reason, it is not easy for startups to compete with the giant and establish their name in the market. However, the increased demand for affordable vacation rentals among millennials opens up plenty of opportunities for businesses to run an Airbnb business. If you are a business that asks yourselves, should I invest in Airbnb? then this blog post will help you find out an answer. Let’s get started.
Airbnb Business model
To know whether running an Airbnb is a lucrative business in 2020, let’s take a closer look at its business model. Unlike traditional hotel groups, Airbnb doesn’t follow a linear business model that demands investment in millions in owning and maintaining rental properties.
Airbnb’s fundamental resources are its people and there it doesn’t require a huge investment to start your Airbnb business. Airbnb offers a platform for people to list their unused space and make an extra income from the rent they get from travelers. As a vacation rental platform, it allows travelers to connect with hosts and book accommodations and live like locals when in another city. Review and rating systems allow travelers to make better decisions about the hosts and vice versa.
How does Airbnb make money?
In the first quarter of 2019 alone, Airbnb’s revenue grew 31% to $9.4 billion compared to the previous year. So being a free platform for vacation rentals, how does Airbnb make money? Here is how it functions. The hosts list their properties on Airbnb which travelers can book on preferred locations according to their requirements and budget. Both booking and financial transactions take place on Airbnb’s platform. Airbnb gets the main share of its revenue from transactions through two user groups as follows.
Commission from property owners
Airbnb takes a flat 10% commission fee from property owners or hosts for each successful booking. Hosts are also required to pay a 3% processing fee for processing the payments of the guests.
Transaction fee from guests
Airbnb deducts a 6-12% non-refundable transaction fee for travelers or guests for every booking. As Airbnb has entered a number of complimentary services including experiences, it also earns revenue from those businesses as well.
Will running an Airbnb be worth it in 2020?
Any startup planning to start an Airbnb business must ask this question- Is Airbnb investment strategy a lucrative business idea in 2020? The answer is yes. 2020 without a doubt is the best time to invest in Airbnb business. Here is why Airbnb is a lucrative business in 2020.
The demand for budget travel will continue to grow
One of the most promising trends that have influenced the vacation rental industry in recent years is the increasing demand for budget travel. The demand for spacious rentals among millenials for family vacations has skyrocketed as well. People prefer experiencing a budget friendly local stay rather than expensive hotel stays. This encouraging trend is expected to continue beyond 2020.
Airbnb will beat traditional hotels
Ever since the launch of Airbnb, one of the consistent trends in the vacation rental market has been the increasing demand for budget-friendly vacation rentals. 2020 will be the year Airbnb accommodations surpass traditional hotels. Businesses who enter right now into Airbnb business will reap the complete benefits of the most popular upward trends in the vacation rental market.
Unique stays are becoming popular
Modern travelers prefer to get indulged in a truly out-there experience by staying in a treehouse, a castle, a yacht, or an Igloo during their vacation. While these aren’t luxury stays by any means, they will place you straight in the middle of the places you will visit. Airbnb offers a variety of unique stays like bubble suit, bamboo house, sheep wagon, treehouses, adobe domes, caves, etc. for an immersive vacation experience, you won’t get anywhere else.
The future of Airbnb
Airbnb is a giant in the vacation rental industry with its global presence in almost all countries. The unique revenue model of Airbnb is proven to be really strong as travelers prefer Airbnb over traditional hotels for comfortable and cheap stays. Airbnb also has leveraged technological innovation to create a peer-peer platform that connects people across the globe. Airbnb’s profit continues to grow exponentially as the listings and short-term rental bookings increase every day even though it charges a nominal service fee.
Businesses looking forward to entering the vacation industry can take inspiration from Airbnb’s success to build a similar platform for renting out accommodations. Not just vacation rentals, you can adopt Airbnb’s business model to start a peer-peer rental platform for cars, boats, buses, bikes, machinery, coworking spaces, parking spaces, etc. The Airbnb clone script allows you to launch your peer-peer rental marketplace like Airbnb with the same features and functionalities easily and cost-efficiently. This could be a great idea as starting an Airbnb business doesn’t call for huge investments and ownership of assets.
Airbnb for x business ideas
The success of Airbnb has given rise to the concept of Airbnb for X, just like Uber for X. If you want to start an Airbnb but have a niche idea, you can adopt the same business model to start your own Airbnb for more niches than vacation rentals. An Airbnb clone script is quite beneficial in building your Airbnb platform as it can be customized to any level to suit your business requirements and goals. Here are some of the rental business ideas to start a lucrative Airbnb business in 2020.
Airbnb for parking space
Just like Airbnb for vacation rental, Airbnb for parking space connects individuals and parking space owners offering free parking lots. Parking owners can list their parking lot allowing car drivers to book empty parking spaces at the location of their choice.
Airbnb for car rentals
Even before Airbnb, this was one of the most profitable businesses in the market. Car rental marketplaces can facilitate business between car drivers and riders with reliable rental services. This business has the potential to earn high revenue when compared to other rental businesses.
Airbnb for equipment
Airbnb is one of the most trending businesses that allow people to rent equipment like office equipment, hunting equipment, water gears, camera, anything, and everything. As buying equipment is a huge investment, it is mostly not affordable for many of the people who need them. By starting a peer-peer rental marketplace for equipment, you allow people to rent equipment in a convenient and cost-effective manner.
Airbnb for Boat rentals
Boat rental business is one of the popular rental businesses in the U.S and the U.K. As more people prefer going for recreational activities on a boat for vacation, this business has more demand and helps in earning a significant amount of revenue.
Airbnb for clothing
Another Airbnb business that has high potential is clothing rental. This could be more helpful for people who like to wear designer pieces which otherwise are not very accessible and affordable for all.
Airbnb for sports goods
If you are looking to specialize in a unique niche, invest in Airbnb for sporting goods that offer a wide variety of sporting goods like training equipment for different sports and related activities.
Airbnb for furniture
This is another valid pee-peer rental business as people who follow a minimalist lifestyle would like to rent expensive furniture rather than owning them. Therefore, you have a niche scope on this rental.
Airbnb for camera equipment
As new model cameras and related accessories get launched frequently, the previous models become outdated soon. That is exactly why Airbnb for camera rentals is a great business idea. Build a rental platform based on Airbnb’s business model that connects people who want to rent their camera equipment to people who are looking for the same on a rental basis.
Airbnb for event venue
Launch an Airbnb for event venue rentals that allow customers to book event spaces for a short span of time for events like baby showers, wedding functions, office celebrations, business dinners, workshops, meetings, etc.
Wrapping it up!
The peer-peer rental industry is expanding and growing like never before. With the rising popularity of on-demand rental platforms like Airbnb, where anyone can rent and book a
Vacation rental has disrupted the industry. While Airbnb is already a multibillion-dollar brand and is sure to grow further, if you have a similar idea where you can make the process of rental easy, reliable, and efficient, it’s possible to thrive in the industry with your Airbnb business.
Though the vacation rental industry is becoming more commercialized, the future of rental marketplaces, in general, looks promising and is predicted to grow bigger. To establish a successful peer-peer rental marketplace like Airbnb, entrepreneurs need to traverse that extra mile and leverage the latest technologies to provide top-notch services.