How Airbnb makes money?

Service fee is the main way how Airbnb generate revenue. There’s host fee, guest fee and for booked experiences 20% service fee. Company was incorporated in 2008 and has incurred net losses in each year since the inception.

A few days ago Airbnb applied for IPO and made S-1 form publicly available on Securities Exchange Commission. This form provide insight into company’s financial and operational data that that previously was confidential

Airbnb will be listed on NASDAQ under proposed symbol “ABNB”. In total four series of common stock (4,736,000,000 shares) will be available:

  1. Class A (2.000.000.000 shares) entitled to one vote only.
  2. Class B (710,000,000 shares) entitled to 20 votes.
  3. Class C (2,000,000,000) entitled to no vote.
  4. Class H (26,000,000)entitled to no votes and will convert into a share of Class A on a share-for-share basis upon the sale of such share of Class H to any person or entity that is not company’s subsidiary.
  5. 10,000,000 shares of preferred stock.

According to Crunchbase Airbnb has raised a total $6.4B in finding. Among big investors are JP Morgan Chase ($1B); CapitalG & TCV ($555.5M in 2016 and $447.8M in 2017); Silver Lake & Sixth Street ($1B); TPG Capital ($475M), etc. Full list of investors I didn’t find.

In 2019 Airbnb generated gross booking value of $38B: $31.3B in hosts earnings, $5.3B in Airbnb service fees, $1.4B in taxes. During the nine months ended September 30, 2020, Airbnb generated gross booking value of $18B.

While writing this article I came across charge called “cleaning fee”. So far I’ve never seen this type of fee in my travel bills from many places (from 1* accommodation to luxury 5*). For me it’s weird because cleanliness is crucial during the pandemic and company charge for it. In New Zealand I’ve seen flat where staying 9200Rs but cleaning more than 10000Rs. That’s ridiculous.

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1 Comment

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