How profitable is Airbnb

How Airbnb is generating profit

Airbnb has revolutionized the hospitality industry by connecting people with housing needs with landlords who have properties to rent. Its business model has generated significant returns for investors and owners. Take a look at how it is making money and what it means for the future of the industry.

Airbnb stock

Source: Google Finance(30 Dec 2022)


In 2008 when the economy of the entire world was going down, in the USA alone 2.6 million jobs were lost and a recession (a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.) was declared. The world economy had gone down by 2 trillion. In these devastating times, Airbnb was founded,  and it was the company that used the recession itself to make billions of dollars.


Before the 2008 recession, most people would never allow a stranger to live in their house no matter how high they were willing to pay. Still, in 2008, most people were suffering from unemployment and bankruptcy. They were not able to pay their bills as well, even the Airbnb founders had to rent out their apartments to pay their fees,  this was seen as a golden opportunity by the founders and they launched their service since people had to become a bit more welcoming to make them both ends meet Airbnb was able to find business during the time.

Why Airbnb

So the question arises that why only Airbnb was able to capitalize on this, well they did not just launch the right service at the right time they were the first to ;


When this model of renting out homes for strangers was relatively new people could not gain each other’s trust, Airbnb then shifted their focus on this problem, they tried and tested many ways to enhance the trust model between host and guest and they figured out that if the guest and the host actually introduce themselves in a nice way rather than in a formal way and telling about themselves the guest would feel very comfortable. They also discovered that if the guest and host had more things in common they will be more satisfied with the experience,  For example, if the guest is a 23-year-old from Houston and the host in new york is a 45-year-old with no similar interests there is a high chance this meeting won’t go so well, however, if the new yorker is also a relatively young and lively person who is native from Houston the experience would go smoother.


AIRBNB allowed the listed hosts and guests both to introduce themselves and share their feedback and experience with Airbnb, according to modern business reports this is the best way to improve;  by taking out the problems and solutions directly from the consumers and service providers.

3. Deep work

When Airbnb was in its initial days its founders were told by one of their experienced investors that they should go out and talk to the hosts themselves physically since there was no concept of online meetings back then, so the Airbnb founders went to New York from where most of their hosts were from.

They did a very unconventional move as they went to all of the hosts during their three-week stay in new york to discuss the company’s future, about what improvements they could bring to their rentals 

For example; Airbnb founders found out that despite having a very good and well-decorated room it wasn’t looking up to the mark in pictures,  that was due to the low camera quality which was affecting their sales so these guys went out and rented a camera and photographed many of the rooms themselves, this was the level of effort they had put and this helped the founders to make a loyal consumer system, all of the hosts that had signed up for the Airbnb service stayed with the Airbnb service since this next level of empathy was achieved between them. This helped the Airbnb founders to form a company that rose from the ashes during a time like a recession when only a fool would go on to build a company from scratch.

4. Word of mouth

Airbnb founders chose the most powerful tool for marketing that word of mouth these guys had put in a lot of effort even in basic things. This effort combined with the model of suitable timing, designing trust and most importantly an effect of empathy laid the foundation for a self-sustainable method of marketing that is word of mouth. Soon after the new york designation, listings from hosts and guests around the world started taking place via Airbnb.


With the combined effort of Airbnb developers, consumers, and providers it became one of the largest companies in the world of its type.

Airbnb reached a $10 billion market value in 2014. There are approximately 6 million Airbnb properties around the world. It has main offices in 31 cities. There have been 400 million guests served by Airbnb since its launch. Airbnb is active in 98% of the world. The country with the most Airbnb demand is the United States, with 99.5 million nights booked in 2021. Airbnb made about 4.7 billion dollars in 2019 alone despite being in an extremely low-margin business.



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