To create a website like Airbnb, it is important to focus on the right features, effectively manage your budget, and ensure a great user experience. This can be achieved by combining custom development, marketing strategies, and careful team selection.
However, these tasks may be difficult for new entrepreneurs. In this article, we will guide you through the process of building an app and website similar to Airbnb. We will start with a minimum viable product and gradually develop it into a fully-functional platform. Before we begin, let’s take a closer look at Airbnb’s business model and approach to understand its success.
Airbnb’s Business Model and Structure Explored
Airbnb connects homeowners with travelers looking for short-term rentals worldwide. It offers a wide range of affordable lodging options that encourage local experiences and help property owners earn extra income. Users can easily search, book, and pay for accommodations using the website or mobile app.
Airbnb in the United States and Europe
Airbnb is becoming more popular globally, even though it has encountered problems such as rental shortages, illegal subletting, and safety worries. This private accommodation rental and sharing service provides cheaper and more genuine options compared to hotels. Consequently, Airbnb has experienced a notable rise in users in the U.S. and Europe, its key markets, in the last six years.
Airbnb in Emerging Markets
Latin America, the Middle East, Africa, and North America are among the top markets for Airbnb. In 2020, guests stayed an average of four nights per Booking in these regions.
Airbnb links hosts and guests for a unique travel experience. Here’s how it benefits both parties:
Hosts’ Experience
Hosts provide information about their property, including its location, size, amenities, and availability, when creating a listing. They can set their own rates and additional fees, and they also have the option to use Airbnb’s Smart Pricing tool for recommendations.
Guests can send booking requests to hosts, who have the ability to review and either accept or decline them. Hosts then make necessary preparations for the guest’s arrival, share relevant details, and coordinate check-in and check-out timings. Once the stay is over, hosts have the opportunity to leave reviews for their guests.
Guests’ Experience
Travelers look for places to stay that match their preferences, like where they want to go, when they’re traveling, and what type of property they prefer. They can request to book, use Instant Booking if it’s an option, and enter their payment details.
Visitors choose accommodations based on what they like, such as the location, dates, and type of property. They can request to book, use Instant Booking if it’s offered, and input their payment details.
Explanation of Airbnb’s Business Model
Here is an overview of Airbnb’s business model canvas, illustrating how the company functions and earns money.
Target Customers
Airbnb caters to travelers who want special places to stay at a good price and property owners who want to make extra money by renting out their spaces.
Unique Selling Point
Airbnb offers a variety of accommodation choices for travelers, usually at more affordable rates compared to regular hotels. Hosts can use the platform to make extra money by renting out their properties.
Platform Channels
Airbnb uses its website and mobile app to link travelers and hosts, simplifying the process of searching, booking, managing, and paying for accommodations.
Establishing Trust
Airbnb builds trust by using user profiles, reviews, secure messaging, and customer support to address transaction problems.
Generating Revenue
Airbnb makes money by charging a commission on bookings. This commission is usually collected from both guests (booking fee) and hosts (hosting fee).
Important Resources
Airbnb’s most crucial assets are its platform, user base, and the data it collects on user behavior and preferences.
Core Activities
Airbnb is dedicated to enhancing its platform, entering new markets, and ensuring customer satisfaction with support and quality control.
Partnerships
Airbnb collaborates with businesses and groups to improve services such as payment processors, tourism boards, and additional service providers such as experiences or car rentals.
Are Airbnb-style businesses still profitable to start?
Many rental platforms are making money, raising millions in funding. Let’s start by looking at Airbnb’s financial achievements.
Airbnb’s Financial Review
To grasp Airbnb’s financial situation, we must examine its worth, including leadership, financial setup, potential earnings, and asset value in the market.
Valuation
In 2021, Airbnb’s worth increased to $113 billion from $75 billion in the previous year. However, by 2023, the company’s value slightly decreased by 1.08% to $109.6 billion. Analyzing important metrics will offer a deeper understanding of its financial standing.
P.E. Ratio Compared to Peers
Airbnb’s P.E. Ratio is 36.6x, which is higher than its competitors’ average of 27.1x, indicating that it is more costly.
P.E. Ratio vs. Industry Average
Airbnb’s P.E. Ratio is 36.6x, which is higher than the U.S. Hospitality Industry’s average of 19.7x, indicating that Airbnb is pricier.
Share Price vs. Fair Value
Airbnb’s current share price is lower than its estimated fair value, indicating that it is undervalued by more than 20%.
PE Ratio vs. Fair PE Ratio
Airbnb’s P.E. Ratio is less than its estimated fair P.E. Ratio, indicating it is a good deal.
Analyst Target Prices
What do analysts predict for the next year, and how confident are they in the consensus price target?
The consensus price target is over 20% higher than the current share price, with analysts in agreement within a statistically confident range.
Management
CEO Experience and Alignment
Brian Chesky, the CEO and co-founder of Airbnb, started the company in 2008. He has been with the company for 15.3 years and earns a monthly compensation of $132,152. Chesky graduated from the Rhode Island School of Design with a Bachelor of Fine Arts in industrial design.
Comparison to Market: Brian’s pay of $132.15K is lower than the average compensation for similar-sized companies in the United States, which is $12.45M.
Comparison to Earnings: His salary is in line with the company’s performance in 2021.
Leadership & Board
ABNB’s management team and board members have an average tenure of 4.4 and 4.6 years, showing their experience.
Future Growth
Airbnb is expected to see a 15.7% increase in earnings and a 12.4% increase in revenue annually. The EPS and ROE are also forecasted to go up by 15.5% and 26.2% each year. Analysts have positive predictions for the company’s future.
Earnings Vs. Savings Rate
ABNB is expected to have a yearly earnings growth of 15.7%, which is higher than the savings rate of 2.1%.
Earnings Vs. Market
ABNB is projected to surpass the annual growth rate of the U.S. market with its earnings of 15.7% compared to the market’s 15.4%.
High Growth Earnings
ABNB is expected to experience slight earnings growth.
Revenue Vs. Market
ABNB is expected to surpass the annual growth rate of the U.S. market.
High Growth Revenue
ABNB is projected to have a yearly revenue growth of 12.4%, which is anticipated to fall short of the 20% yearly target.
Future Return on Equity
ABNB is expected to have a high Return on Equity of 26.2% in the next three years.
Success Stories of Rental Marketplaces
Zumper: $30M Funding
Due to the COVID-19 pandemic, there has been a rise in the need for short-term rental options as more people are working remotely. To meet this demand, Zumper, an online rental marketplace, secured $30 million in a Series D1 funding round led by Kleiner Perkins. This investment will help Zumper improve its product and provide better services to users looking for short-term rentals.
Breeze: €2.2M Seed Round
Breeze, a property rental marketplace app powered by AI and based in Berlin, recently secured €2.2 million in funding. The app connects landlords with tenants and operates in Germany, Switzerland, and Austria. Tenants can use the platform for free, while landlords are charged €89 for a successful rental.
Here: $5M Funding
A fractional vacation real estate marketplace investment platform secured $5 million in seed funding to grow its services in more than 20 U.S. vacation rental spots. The platform’s goal is to make real estate investments accessible to everyone and tap into the $1.8 trillion short-term rental market for regular investors.
Roofstock: $240M Financing
Roofstock, an internet marketplace for investors looking to buy single-family homes, recently secured $240 million in funding through a Series E round. The funding was led by SoftBank’s Vision Fund 2 and has valued the company at nearly $2 billion. Roofstock primarily caters to buyers interested in affordable and moderately priced homes, which made up more than 70% of investor purchases in the previous quarter.
Creating a Website Similar to Airbnb: MVP Guide
Here is a simple guide to help you build a website similar to Airbnb.
Choose the Type of Software
There are two main options when creating an app or website similar to Airbnb:
1. Use a pre-built platform.
2. Develop marketplaces from scratch.
Both options have advantages and disadvantages, depending on your specific requirements and preferences. Let’s briefly explore when and why you should consider using each option while building a website like Airbnb.
Prebuilt Platform
To start your online marketplace business fast and cost-effectively, you can use a premade template. You have the choice between a fixed or customizable template, giving you more options. Just be ready to expand your product in the future.
Consider using Sharetribe, RocketBazaar, or Shopify for your marketplace. These platforms offer different features, so you can pick what suits your budget and create a website similar to Airbnb. Your business data will be stored on servers with many other websites.
Develop from Scratch
If you require specific business logic and maximum user orientation, custom marketplace development is the best option. Although it may take more time and money, you will ultimately receive a fully-functional web application developed by a team of expert software developers. They will take into account all your preferences and business requirements.
Defining Your Marketplace MVP
Here are the essential features to include when mapping out your minimum viable product for hosts and guests. These features will ensure a functional and user-friendly experience. Prioritize the core features that align with your core value proposition and are necessary for initial user testing.
Select a Collaboration Method & Technology Tools.
Choose between freelancing, outsourcing, or offshoring based on budget, timeline, and technical expertise. Research providers, compare offerings, and select the best fit.
Your marketplace development team needs:
– Project manager
– Product owner
– Developers
– UI/UX designers
– Q.A. engineers
– DevOps engineer
Team structure depends on project needs, role availability, and budget.
Check out the infographics below to see the technologies Airbnb uses.
Create the U.I. and UX design
Design wireframes and mockups for the website’s layout, navigation, and visual elements. Prioritize usability, simplicity, and aesthetics for a smooth experience for hosts and guests. Designers commonly use tools such as Sketch, Adobe X.D., or Figma and work closely with designers and developers to enhance the designs. Your team should also follow these detailed instructions.
Perform user studies
Conduct market research to grasp the requirements, choices, and challenges of your target audience.
Develop user profiles
Create user personas to accurately represent your target audience and provide guidance for design choices.
Develop user stories and use cases
Defining the product’s core features and how users interact with it.
Validate designs through usability testing
Validate designs by performing usability tests and collecting feedback from potential users.
Improve using input from users
Design updates should be made in response to user feedback in order to constantly enhance the user experience.
Collaborate with the marketplace development team
Collaborate with developers to guarantee a seamless shift from design to execution and keep communication open to tackle any problems or modifications that might come up.
Build the MVP
Create the minimum viable product for the marketplace with the most important features using selected technologies, frameworks, and tools. Construct both the front-end and back-end of the site with an emphasis on performance, security, and scalability. Connect essential APIs for location, payment processing, and messaging.
Clean and Modular Code
Write code that is clean, modular, and easy to understand and update.
Version Control
Use tools such as Git for version control to handle code modifications and work together efficiently.
CI/CD Automation
Utilize CI/CD tools for automating software testing, building, and deployment.
Code Review and Refactoring
Make sure to consistently check and optimize code for better quality and performance.
Test-Driven Development
Ensure robustness and minimize bugs by practicing TDD, which involves writing tests for each feature before implementing it.
Quality control and testing
Make sure to test your MVP on different devices, browsers, and screen sizes to confirm it works well. Find and resolve any bugs, usability problems, or performance issues.
Functional:
Testing is important to make sure that the application functions correctly according to its requirements. It checks if the output is accurate, the data is manipulated correctly, the user interface is user-friendly, and the core features work properly. There are different types of testing such as unit, integration, and system testing.
Non-Functional:
This evaluation examines performance and factors that are not directly linked to user needs, like dependability, ease of use, capacity, and safety. Instances comprise of performance, load, and stress evaluations.
Launch the MVP
Release the MVP, bring on hosts and guests, collect feedback, and review KPIs for enhancements. Remember that Google Play Store and Apple App Store have specific guidelines for submitting apps.
| Requirement | Google Play Store (Android) | Apple App Store (iOS) |
| Developer Account | Create a Google Play Developer account ($25 fee) | Enroll in the Apple Developer Program ($99/year) |
| App File | Prepare a signed Android App Bundle (.aab) or APK file | Prepare an iOS App Archive (.ipa) file using Xcode |
| App Icons & Screenshots | Provide a high-resolution app icon, feature graphic, and at least two screenshots | Provide app icons (multiple sizes) and at least one screenshot per device type |
| Description | Write a short and long app description | Write a concise app description |
| Categories & Rating | Select the app category, add tags, and specify the target audience; complete a content rating survey | Select primary and secondary categories and set the age rating |
| Privacy Policy | Provide a privacy policy URL (if needed) | Provide a privacy policy URL |
Improve and enhance using feedback
Utilize the findings from the MVP to guide decision-making and determine which features and enhancements should be focused on for the complete product.
Five Signs an MVP is Ready for Full Product Development:
Positive User Feedback
Users appreciate the value of the MVP and give positive feedback, showing that they have liked the main features and the product is ready for more improvements.
Market Validation
The product needs to attract customers and show that there is a market demand for it by solving a genuine issue or fulfilling a need.
Stable and Scalable Architecture
The design needs to be reliable and flexible, so that new enhancements can be incorporated smoothly without causing any significant interruptions or redoing the work.
Reaching Business Goals
It must fulfill or surpass the initial goals of the business, like gaining a specific number of users, making money, or reaching a particular growth rate.
Resource Availability
If your minimum viable product (MVP) successfully meets all five criteria, then you can move forward with the full product development and expansion.
Build Extra Features and Upgrades
Develop the rest of the features and improvements using input from users, current market trends, and your future goals.
Optimize and Scale
Improve the website’s performance to handle more visitors and users. Add advanced features such as machine learning algorithms for personalized suggestions, analytics, and automated marketing.
Ways to Make Money from Your Peer-to-Peer Rental Platform
Airbnb makes money by charging booking fees.
- Guest commission: Guests are required to pay a fee of 6-12% depending on the size of their reservation.
- Host commission: Hosts are charged a 3% fee for each transaction.
Taking cues from Airbnb’s successful monetization strategy, let’s delve into how your app can generate revenue.
Airbnb Plus
This program provides a range of top-notch, beautifully crafted homes with hosts who have a reputation for outstanding reviews and meticulousness. Hosts are required to pay an application fee to be a part of this program, and Airbnb charges a higher commission for bookings.
Airbnb Experiences
Airbnb collects a commission from the booking fees when hosts provide guests with special features or events.
Business Travel
Airbnb collaborates with businesses to provide corporate travel options, collecting a fee for arranging accommodations.
Airbnb Luxe
Upscale housing options with top-notch amenities. Hosts must pay a fee to apply, and Airbnb takes a larger commission for bookings.
Co-Hosting
Hosts have the option to team up with co-hosts to oversee their listings, and Airbnb will receive a portion of the co-host’s income.
Sponsored Listings
Airbnb allows hosts to increase their visibility in search results by paying for premium placement, which can help them earn more money.
Affiliate Program
Airbnb collaborates with various websites or apps that direct users to their platform, providing a commission for every booking that is successfully made.
Additional Monetization Models
Sign-up Fees
You can collect a single fee from accommodation providers for listing their properties or services on the platform, which will generate extra income.
Combo Offers and Group Reservations
Offer special package deals to customers, motivating them to book multiple services at once, resulting in increased commissions.
B2B Services
You have the option to provide tools and solutions to help other accommodation providers and businesses with their online presence, and you can charge fees for these services.
Ancillary Services
Make money by providing extra services such as car rentals, airport transfers, and activities, earning commissions or referral fees for reservations.
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