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Airbnb Com Files for IPO: Here’s all you need to know

In 2007 two San Francisco roommates search for their way to make rent one month. Subsequently, most local hotels are getting booked up because of a conference held in town. Holding on to the opportunity, these two advertise their available air mattress and breakfast in their own living room. As they gain a few customers to stay, the Airbnb idea was born.

Furthermore, Airbnb officially founded in 2008. The company its starting challenges unto becoming a home-sharing enterprise. Its current value is at about $31 billion and is expected to grow more upon going public planned in the second half of 2019. The said roommates, Joe Gebbia and Brian Chesky, currently are the chief product officer and CEO, respectively. Moreover, the firm currently hosts more than two million people per night. In addition, historically, the firm hosted about 400 million already.

Sharing Economy

Similar to Uber, Lyft and other mobile-generated companies, Airbnb is a pioneer in its sharing economy. Their industry emerges upon leveraging the capability of mobile technology and opening the value of misspent assets. Now looking at Airbnb’s case, its business is to connect travelers to a renting space host, mainly on a short-term basis.

Airbnb might often view among direct competitors to hotels, but it offers a different experience. Its guest can choose a wide range of option. Want a shared or a private room. Also, to rent an entire house or an apartment. Furthermore, differentiating it from the usual hotel, Airbnb listing also includes options such as castle, treehouse, yurts or boathouses. Airbnb’s platform provides travelers access to homes and neighborhoods including areas where hotels are very hard to find.

How Airbnb works

The firm works as the medium that connects guest and host. Its platform provides listing and message exchange that collects and transfers payment. At the same time, it mediates any disagreement or conflicts arising. The firm also motivates host and guest to provide a review of each other. With that, it could provide future guests with better information about the place. And the other hosts could also provide information on the behavior of individual guests.

Similarly, as an online marketplace model, Airbnb proves its capability to be profitable. It profits by charging each guest a commission of 0% and 20% of their stays. Also, it charges host about 3% to 5% fee for each booking transaction.

Airbnb: The success

The company’s business model has been a success. According to the company, it brings in “substantially more” than a  $1 billion profit during the third quarter of 2018. Furthermore, it was about to report a second year straight of confident Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for 2018. Despite that, there are a few indications of slowing growth within its developing markets. In a memo, Airbnb says that guest stays still surge in cities. That includes Beijing, up by 91% in the third quarter, and Mexico City, up by 79%. Additionally, Birmingham, England up by 20%.

Airbnb also expands its business in order to provide “experiences” from individual hosts. For instance, tours, classes, food tastings, and hikes. Some rumors go around that the company is to move to flight-bookings, yet it has to do so. Above all, the company’s extensions to experiences show an  ambition of growth to open up its full potential

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