AirBnB

AirBnB is an online market that connects people that are looking for accomodations with people that are looking to rent out their homes. It is operational in more than 100,000 cities in over 220 countries worldwide. Travelers can book an AirBnB for considerably lower than a hotel room. However, the main risk is that the property may not love up to the expectation.

Advantages of AirBnB include:-

1. Host price preference: The hosts can decide the price guests have to pay to rent the property. It can be charged per day, per week and sometimes even per month.
2. Free Access: Hosts don’t have to pay any fee to get listed on AirBnB. The property on the website includes a detailed description, some photos and a profile about the hosts
3. Wide Selection: The AirBnB website lists single rooms, apartments, entire houses and even yachts and houseboats.
4. Guarantees for Guests and Hosts: The host guarantee program provides protection for upto $1,000,000 in damages, if any. AirBnB also holds the guest’s payment for 24 hours before releasing it to the host.
5. In more recent years, AirBnB has started offering restaurants and other experiences. People can search by location and will see a list of experiences, such as workshops and sightseeing, offered by local Airbnb hosts. Restaurant listings also include reviews from Airbnb hosts.
6. Customizable searches: Guests can search through all the AirBnB listings—not only by date and location, but by price, type of property, amenities, and the language of the host.

However, it also has some disadvantages. They are:-

1. Not legal everywhere: Hosts need to check if AirBnB is allowed to operate in their country before publishing the listing. They might be required to acquire special licenses or permissions. Some countries where it is illegal are Syria, Croatia and Netherlands.
2. Potential damage: The biggest risk for the hosts is property damage. The Host guarantee program doesn’t cover loss or damage of cash, paintings or jewellery. There have been many cases when the host’s property has been trashed.
3. Additional Fees: A number of additional fees are imposed. Guests pay a service fee of 20% on top of the reservation fee to cover Airbnb’s customer support and other services. Banks or credit card issuers may add fees if applicable. And while listings are free, Airbnb charges hosts a service fee of at least 3% for each reservation, to cover the cost of processing the transaction.

So, how does AirBnB make money? They take commissions from both the guests as well as the hosts for every successful transaction. Recently, AirBnB has been facing a lot of restrictions because of the COVID-19 pandemic. It has lost millions of dollars beacuse of it. But they have resumed operations in some countries and is certain to make a comeback.