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Airbnb, Inc.
""Airbnb Logo Bélo.svg
Type of site
"Privately held company[1]
Available in 26 languages
Founded 2008; 9 years ago (2008)
Headquarters "San Francisco, "California, "United States
Area served Global
Key people [2]
Industry "Travel, "hospitality service
"Services "Homestay, "vacation rental
Website airbnb.com
"Users 150,000,000
"Native client(s) on "iOS, "watchOS, "tvOS, "Android

Airbnb is an "online marketplace and "hospitality service, enabling people to lease or rent short-term "lodging including "vacation rentals, "apartment rentals, "homestays, "hostel beds, or "hotel rooms. The company does not own any lodging; it is merely a "broker and receives percentage service "fees ("commissions) from both guests and hosts in conjunction with every booking.[3][4][5] It has over 3,000,000 lodging listings in 65,000 cities and 191 countries,[6] and the cost of lodging is set by the host. Like all hospitality services, Airbnb is a form of "collaborative consumption and "sharing.

Contents

How it works[edit]

Fees charged by Airbnb[edit]

Registration and account creation is free.[7] On each booking, the company charges guests a 6%-12% "guest services" fee and charges hosts a 3% host service fee.[8][9][10][11][12]

Booking lodging[edit]

Users can search for lodging using a variety of filters including lodging type, dates, location, and price.[13] Before booking, users must provide a valid "email address, telephone number, and in some cases, a scan of a government-issued ID.[14][15]

Offering lodging[edit]

Users can create a listing by selecting "list your space" after logging in.[16] A listing will not go live until the host is ready to publish.[17] Pricing is determined by the host, with recommendations from Airbnb.[17] Hosts can charge different prices for nightly, weekly, and monthly stays as well as make adjustments for seasonal pricing.[17] Hosts add descriptions of the residence, "amenities, available dates, cancellation policies, and any "house rules.[18] Hosts are advised to upload at least a few photos of the lodging that is offered.[19] For eligible hosts, Airbnb offers free professional photography.[20] Interested parties are required to message the property owner directly through Airbnb (and not via another method) to ask questions regarding the property. Unless the host has enabled "instant book", in which case requests for stays are accepted automatically, a host has 24 hours to accept or decline a booking.[21][22] After the reservation, hosts coordinate meeting times and contact information with guests.[17]

Legality of offering lodging[edit]

Some cities have restrictions on subletting for a short period of time.[23] In some cities, collection of a "transient occupancy tax by Airbnb is required.[23] In many cities, hosts must register with the government and obtain a permit or license.[23] Airbnb has published a list of regulations and requirements by city; however, only cities in the United States are included. In addition, many landlords or community associations also have restrictions on short term sublets.[24]

Mobile app[edit]

""
""
Airbnb iPhone app screenshot

In addition to the Airbnb website, the company offers "mobile applications for "iOS, "Apple Watch, and "Android.[25][26] These offer "geolocation and much of the functionality of the website, including (which allows faster response times) "private messaging. The mobile apps have received several awards.[27]

Safety mechanisms[edit]

References and reviews[edit]

After the guest completes a stay, the host and guest have the option of leaving references for each other and reviews of their stay, which are posted publicly, providing for an "online reputation.[28][29][30][31]

Insurance[edit]

Airbnb recommends that hosts obtain insurance which covers damages caused by guests.[32] Airbnb offers secondary insurance, called its "host guarantee".[33] The guarantee covers "property loss and damage due to "vandalism and "theft. When first launched in August 2011, the program covered up to US$50,000.[34] However, the maximum was later increased to US$1,000,000.[35] Members in the following countries are eligible for the Host Guarantee: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Malaysia, the Netherlands, Norway, Puerto Rico, Singapore, South Korea, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom, and the United States.[36] The company also initiated a 24-hour customer service hotline, established a task force to review suspicious activity, and implemented additional security features.[37]

Logged private messaging system[edit]

The site provides a private messaging system as a channel for users to message one another privately before booking and accepting reservations.[38] Hosts are never required to accept a reservation.[39][40]

Secure payments[edit]

Airbnb facilitates "online payments from guest to host through its Security Payments feature which processes payment transactions 24 hours after check-in.[41]

Security deposits and cleaning fees[edit]

At the option of the host, Airbnb facilitates security deposits and mandatory non-refundable cleaning fees, the former of which is held until the property is vacated.[42]

Verification of identity[edit]

Any Airbnb host can require their prospective guests to obtain "Verified IDs" before booking, meaning that they are required to scan a government-issued ID to verify their identity.[43]

Linking to social network accounts[edit]

An Airbnb account can be linked to accounts on "social networking services such as "Facebook.[44] As of May 2011, the site uncovered over 300 million connections between Airbnb and the Facebook "user groups.[45][46]

Wish list feature[edit]

In June 2012, Airbnb launched a "wish list feature, offering users the ability to create a curated catalog of desired lodgings that they would like to visit.[47] Co-Founder and "Chief Product Officer, Joe Gebbia and his team conceived the idea of changing the website from an "online marketplace to a source for inspiration. Users can organise their favorite destinations into organized lists and share these with other users.[48]

Neighborhoods feature[edit]

In November 2012, Airbnb launched the "Neighborhoods" feature.[49] This feature is a "travel guide that provides in-depth information for selected neighborhoods in 23 major cities through photos, essays, maps, tags from locals, and assessments of various criteria that would be of interests to guests such as public transportation, dining, peace & quiet, nightlife, tourist attractions, and shopping, thereby helping travelers choose the ideal neighborhood to stay in via "collaborative filtering.[50][51][52] The Airbnb product team hand-mapped hundreds of neighborhoods within these cities and had local editors curate content for each neighborhood. Airbnb also added 70 "street photographers who generated 40,000 photographs for the project.[53]

Taxation of income received by hosts[edit]

In the United States, Airbnb sends tax forms to hosts that have earned over $20,000 in rents via Airbnb in a calendar year.[54]

In 2016, the Spanish treasury department sent letters to property owners that have not declared income associated with Airbnb.[55]

In Australia, insiders said in 2016 that the hosts of the 75,000 properties listed on Airbnb would likely face increased chances of being audited.[56]

History[edit]

""
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Airbnb founder Joe Gebbia (right)

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.[57][58][59] The goal at first was just "to make a few bucks".[60][61]

In February 2008, "Nathan Blecharczyk, Chesky's former roommate, joined as the Chief Technology Officer and the third co-founder of the new venture, called AirBed & Breakfast.[59][62]

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.[63] The site Airbedandbreakfast.com officially launched on August 11, 2008.[64][65]

In the summer of 2008, during the Industrial Design Conference held by "Industrial Designers Society of America, it was hard for travelers to the city to find lodging and the founders had their first customers: a group of 3 people in town for the conference.[59][66]

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".[67] In two months, 800 boxes of cereal were sold at $40 each, which generated more than $30,000 for the company's incubation.[68][69] It also got the company noticed by computer programmer "Paul Graham, who invited the founders to the January 2009 winter training session of his prestigious startup incubator, "Y Combinator, which provided them with training and $20,000 in funding in exchange for an small interest in the company.[60][70][71] 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.[72] 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.[71]

In March 2009, the name of the company was changed 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.[73]

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.[74][60]

In April 2009, the company received $600,000 in "seed money from "Sequoia Capital.[60]

In November 2010, the company raised $7.2 million in financing from "Greylock Partners and "Sequoia Capital in a "Series A round and announced that out of 700,000 nights booked, 80% had occurred in the past six months.[75]

In February 2011, Airbnb announced its 1 millionth booking since its inception in August 2008.[76][77] In January 2012, Airbnb announced its 5 millionth night booked internationally. In June 2012, the company announced 10 million nights booked, doubling business in the previous 5 months.[78][79] Of these bookings, 75% of the business came from markets outside of the continental "United States.

On May 25, 2011, actor and partner at "A-Grade Investments "Ashton Kutcher announced a significant investment in the company and his role as a strategic brand advisor for the company.[80]

In May 2011, Airbnb acquired a German competitor, Accoleo. This "takeover, as well as other similar acquisitions, launched the first international Airbnb office, in "Hamburg.[81] In October 2011, Airbnb established its second international office in "London.[82][83]

Due to the growth of international "users, in early 2012, Airbnb opened offices in "Paris, "Milan, "Barcelona, "Copenhagen, "Moscow, and "São Paulo.[84] These openings were in addition to existing offices in "San Francisco, "London, "Hamburg, and "Berlin.[85] Airbnb announced in September 2013 that its European headquarters would be located in Dublin.[86]

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.[87]

In November 2012, in the aftermath of "Hurricane Sandy, Airbnb partnered with New York City Mayor "Michael Bloomberg to offer free housing for persons displaced by the storm.[88] Airbnb built a "microsite for this effort alone where victims register for housing and meet property owners with free housing.[89] Additionally, Airbnb waived all service fees associated with these listings while maintaining the Host Guarantee for all properties listed.[90]

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.[91] At that time, Australian consumers accounted for 10% of the Airbnb user base.[92]

In November 2012, Airbnb acquired NabeWise, a city guide that aggregates curated information for specified locations.[93] The acquisition shifted the company focus toward offering "hyperlocal recommendations to travelers.[94]

In December 2012, Airbnb announced the acquisition of Localmind.[95] 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.[96]

In December 2012, Airbnb announced its strategy to move more aggressively into the Asian market with the launch of an office in "Singapore.[97]

By October 2013, Airbnb had served 9 million guests since its founding in August 2008.[98]

In December 2013, the company reported it had over 6 million new guests in 2013, and nearly 250,000 properties were added in 2013.[99]

In July 2014, Airbnb revealed design revisions to the site and mobile app and introduced a new logo.[100] Some considered the new logo to be visually similar to "genitalia,[60][101] but a consumer survey by "Survata showed only a minority of respondents thought this was the case.[102]

In April 2015, following the "Obama administration's easing of restrictions on U.S. businesses to operate in Cuba, Airbnb expanded to Cuba, making it one of the first U.S. companies to do so.[103][104]

In June 2015, Airbnb sponsored the "Manor F1 Team and the Airbnb logo appeared on the front nose of the cars and on team wear including the drivers' overalls.[105]

In August 2015, Airbnb partnered with "Tesla Motors to provide chargers at certain host houses, first in California.[106]

In October 2015, "Jersey City, New Jersey became the first city in the "New York metropolitan area to officially legalize Airbnb, and add it to the existing body of hotels and motels that pay "transient occupancy tax. Mayor "Steven Fulop stated that rapid-evolving technology such as Airbnb made enforcing rental restrictions in existing zoning laws impossible. Under the legislation, Airbnb pays the city a 6% "transient occupancy tax on each short term booking of a residential property. The laws were estimated to bring $1 million in revenue to Jersey City and expand tourist capacity beyond the city's 13 existing hotels. The laws did not prevent condominium associations from voting to prohibit use of Airbnb in their buildings.[107]

In January 2017, Brian Chesky, CEO of Airbnb, tweeted that the company will give 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.[108][109] AirBnB also led an investment in reservation-booking app, Resy, along with serial entrepreneurs "Gary Vaynerchuk, Ben Leventhal and Mike Montero.[110]

In January 2017, it was reported that Airbnb was profitable during the second half of 2016, making it the first profitable period in company history. Airbnb's revenue grew more than 80% from 2015 to 2016, and the company is expected to remain profitable throughout 2017.[111]

Corporate information[edit]

Management[edit]

The Airbnb founding team acts as the key staff for Airbnb: Brian Chesky, Co-Founder and "Chief Executive Officer; Joe Gebbia, Co-Founder and "Chief Product Officer; and Nathan Blecharczyk, Co-Founder and "Chief Technical Officer.[112]

Office locations[edit]

""
""
Airbnb office in "Toronto, Ontario, "Canada
""
""
Airbnb North American headquarters at 888 Brannan St, "San Francisco, CA.

Airbnb has 19 offices: in Amsterdam (Netherlands), Barcelona (Spain), Berlin (Germany), Beijing (China), Copenhagen (Denmark), Dublin (Ireland), London (UK), Miami (Florida, USA), Milan (Italy), Moscow (Russia), New Delhi (India), Paris (France), Portland (Oregon, USA), San Francisco (California, USA), São Paulo (Brazil), Seoul (South Korea), Singapore, Sydney (Australia), Tokyo (Japan), and Toronto (Canada).[113]

The opening of the Portland office was announced in 2014.[114]

Funding[edit]

As of July 2011, the company had raised US$119.8 million in "venture funding from "Y Combinator, "Greylock Partners, "Sequoia Capital, "Andreessen Horowitz, "Digital Sky Technologies, "General Catalyst Partners[115][116] and undisclosed amounts from Youniversity Ventures partners "Jawed Karim, "Keith Rabois, and "Kevin Hartz,[117] and from A Grade Investments partners "Ashton Kutcher and "Guy Oseary.

In April 2014, the company closed on an investment of $450 million by "TPG Capital at a company valuation of approximately $10 billion.[118] Additional funding was provided by "Andreessen Horowtiz, "Sequoia Capital, Dragoneer Investment Group, "T. Rowe Price and "Sherpa Capital.[119][120][121]

In March 2015, Airbnb raised funding at a $20 billion company valuation.[122]

In 2015, Airbnb raised $1.5 billion in funding led by growth equity firm "General Atlantic, and joined by "Hillhouse Capital Group, Tiger Global Management, "Kleiner Perkins Caufield & Byers, "GGV Capital, China Broadband Capital, and Horizon Ventures.[123]

In September 2016, Airbnb raised at least $555 million in new funding from "Google Capital and Technology Crossover Ventures, valuing the company at $30 billion.[124]

In March 2017, Airbnb raised $1 billion in additional funding, bringing their total funding raised to date to more than $3 billion and valuing the company at $31 billion.[125]

Benefits[edit]

Cost savings to guests[edit]

A September 2016 study showed that the cost of renting an entire house via Airbnb was similar to the cost of renting a single room at a hotel.[126]

Additional income to homeowners faced with foreclosure[edit]

Many people who were on the brink of losing their homes through foreclosure due to financial hardship, have come to depend on Airbnb for additional income.[127] In a survey, 53% of hosts said that the additional income from Airbnb has provided them with the financial means to stay in their home.[128]

Lodging options in under-served areas[edit]

74% of listings on Airbnb are outside the main hostel districts, providing lodging to travelers in areas where they would not otherwise find any.[128]

Economic impact[edit]

Studies have shown that Airbnb guests stay 2.1 times longer than and spend 2.1 times as much as typical visitors.[128][129]

In November 2012, Airbnb commissioned HR&A Advisors to conduct a study which measured the "market impact of collaborative consumption by users in "San Francisco.[130] The study found that from April 2011 to May 2012, guests and hosts using Airbnb contributed $56 million in spending within the San Francisco economy, $43.1 million of which supported local businesses.[131] Over 90% of hosts surveyed rented their "primary residences to visitors on an occasional basis, and spent nearly half the income they make on living expenses. The study also found the average guest stay was 5.5 days, compared to 3.5 days for hotel guests, and the average guest spent $1,100, including $360 on lodging, during their stay, compared to the $840 spent by hotel guests.[132]

Sponsorships[edit]

In 2014, Airbnb was the official jersey sponsor for the "Australia men's national basketball team at the "2014 Basketball World Cup.[133]

Airbnb has sponsored the "New York City Marathon since 2014.[134]

Criticism and controversies[edit]

Fair housing implications and discrimination[edit]

The United States "Civil Rights Act of 1968 prohibits property owners, financial institutions, and landlords from discriminating based on personal attributes such as race and religion, but there is confusion as to whether someone subleasing a home is subject to these provisions. Users are encouraged to build online profiles to "build" trust, and studies have shown that (after accounting for location and housing quality) non-black hosts charge on average about 12% more than black hosts.[135]

Certain hosts have been accused of discrimination because they have rejected or cancelled lodging requests from certain people, while accepting the same exact requests from others with a different skin color.[136]

In July 2016, former Attorney General "Eric Holder was hired to help craft an anti-discrimination policy for Airbnb.[137]

Crimes committed by users[edit]

While almost all Airbnb experiences work out perfectly, there have been many crimes committed by users, ranging from vandalism committed by guests to sexual assault committed by hosts.[138][139][140][141][142][143][144][145][146][147]

Legality of Subletting[edit]

Subletting (the practice of tenants renting their rented space to other people) without the landlord's prior permission is often prohibited by residential leases. [148][149][150]

New York[edit]

New York's state legislature passed a law in July 2010 making it illegal to rent out "Class A residential space for less than 30 days. However, the bill's sponsor, State Senator "Liz Krueger said Airbnb and its competitors are not the law's target.[151][152][153]

A 2011 New York State law prohibits renting residential units for less than 29 days, with certain exceptions.[154][155][156] In May 2013, a New York City judge penalized Airbnb user Nigel Warren with a $2,400 fine.[157] In April 2015, Airbnb asked the New York state legislature for legalization, in return for the collection of "transient occupancy tax.[158][159] In October 2016, after New York Governor Cuomo signed a bill that would impose fines of up to $7,500 on Airbnb hosts who break local housing regulations, Airbnb filed a federal lawsuit charging the new law would cause it “irreparable harm.”[160]

A July 2014 ruling nixed a landlord's eviction plans after his New York City tenant sublet her unit through Airbnb. The judge found that local laws prohibiting short-term sublets only apply to landlords, potentially opening the doors to many more sublets through Airbnb in the coming months and years. Though this ruling sets a pro-sublet precedent, landlords who ask tenants to stop their practices will still expect compliance.[161]

Germany[edit]

In January 2014, the Federal Court of Germany ruled that a transfer of residence to tourists is not covered by a permission to sublet. In this case the tenant was previously warned by the landlords. A pending new case centers around the question if even a termination without notice is possible if no explicit permission from the landlord is obtained.[162]

San Francisco[edit]

In San Francisco, Airbnb's home city, Airbnb hosting was illegal under most circumstances and Airbnb hosts had been fined by the city and received eviction notices from landlords.[163] This situation changed in October 2014, when San Francisco Mayor Ed Lee signed a law legalizing short-term rentals in San Francisco. The law received the nickname of "Airbnb law" as Airbnb was the most affected company. The law requires renters to register as hosts with the city, carry liability insurance, and pay the city's 14% hotel tax.[164] According to a study commissioned by Airbnb itself, in fiscal year 2011-2012, Airbnb should have collected and remitted $1.9 million to the City of San Francisco, but they have yet to do so as of 2014.[165] In 2015, the company put up a set of ads suggesting various ways the city of San Francisco could use the company’s "transient occupancy tax payments. The ads, which were "undoubtedly aiming to drum up good will" suggested ways which the city could use the taxes it was contributing for social good.[166] They were met with criticism, with readers calling them "tone " and "passive aggressive."[166]

Ireland[edit]

In Ireland, "An Bord Pleanála ruled in 2016 that an address let via Airbnb where the owner was no longer resident needed "planning permission for change of use from residential to short-term letting. "Simon Coveney, the "Minister for Housing, Planning, Community and Local Government, said his department would issue guidelines based on the ruling.[167]

Quebec[edit]

On April 29, 2015, "Quebec's Tourism Minister "Dominique Vien said that the province will crack down on rentals through housing brokers such as Airbnb.[168] Effective December 1, 2015, a bill required the payment of a lodging tax of 3.5% on all Airbnb rentals.[169]

Austin[edit]

In 2016, a company called "BNB Shield" entered the market to track and report on illegal and unlicensed Airbnb short-term rentals in Austin.[170]

Barcelona[edit]

In December 2016, a judge invalidated a fine to an Airbnb host in the first such case in Barcelona.[171]

Berlin[edit]

In 2014, Berlin's government passed legislation intending to limit the rentals of entire apartments on Airbnb; owners are allowed to rent only rooms. The law took effect in April 2016, and threatens to fine individuals up to €100,000 if found renting without a permit.[172]

Chattanooga[edit]

In "Chattanooga, Tennessee, subletting lodging via Airbnb is generally illegal; however, the law is not enforced unless someone complains.[173]

Privacy and terms of use[edit]

The new identity verification system "Verified ID" (initially announced in April 2013)[174] has been perceived by many customers as excessively intrusive.[175][176][177] It 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.

Linguist "Mark Liberman has criticized the extreme length of the legal agreements that Airbnb members are required to accept, with the site's "terms of service, "privacy policy, and other policies amounting to "55081 words, or about the size of a short novel, though much less readable", requiring several hours of reading time.[178]

Despite having no explicit ban on hosts filming guests, Airbnb updated its terms of use in November 2014 to require that hosts fully disclose the use of surveillance equipment and security cameras to guests.[179] Previously, no such disclosure was required.[180]

Lack of pricing transparency[edit]

When customers search for lodging, Airbnb displays per-night prices that exclude its own per-night service charges as well as possible additional costs such as cleaning fees. The total price is not revealed until the customer selects an individual property and is ready to book.[181]

In late 2015, the "Australian Competition and Consumer Commission took action against Airbnb for this form of "drip pricing. Consequently, users of Airbnb's Australian web site now see the total price of a stay including all unavoidable charges at every stage of the booking process.[182][183] However, no changes were made to the displayed pricing in other markets.

Boycott over Israeli settlements[edit]

Airbnb is on the "Boycott, Divestment and Sanctions list of companies.[184] The company was added following media reports that lodging listings included settlements in the "occupied Palestinian territories that are advertised as being in Israel or in Israeli neighborhoods.[185][186]

Housing affordability[edit]

In San Francisco, protesters accused Airbnb of contributing to rising rental rates, as landlords keep properties off the longer term rental market and instead get higher rental rates for short term housing via Airbnb.[187] However, Proposition F, which would have restricted short term rentals in San Francisco, failed to pass by a vote of 55% opposed compared to 45% in favor.[188]

Compliance with laws by users[edit]

The company claims it only provides a platform for hosts and guests to do business and is not responsible for compliance with local laws by its users.[189]

Awards and accolades[edit]

Airbnb won the "app" award at the 2011 "South by Southwest conference.[190]

See also[edit]

References[edit]

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External links[edit]

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