All globetrotters know it: the online accommodation rental platform Airbnb has built up a huge following around the world, and is now a must-have when it comes to traveling.
Thanks to its intuitive operation, prices that are often more attractive than those offered by hotels and worldwide presence, Airbnb has succeeded in revolutionizing travelers' habits.
So how did Airbnb seduce so many users around the world? How did the start-up get started? What does the unicorn's future hold? Dive with us into the heart of Airbnb, the app that has changed the lives of tourists the world over.
What is Airbnb?
Airbnb is the kind of success story we're used to seeing on the other side of the Atlantic. An innovative idea that enabled two young Californian entrepreneurs, Brian Chesky and Joe Gebbia, to conquer the world in no time.
Initially, AirBed & Breakfast
With the boom in international tourism in the early 2000s, the hotel market quickly became saturated. That's when two young businessmen based in San Francisco decided to alleviate the problem by offering part-apartment rentals for travelers who couldn't find accommodation during their trip.
The idea was born when a major design conference was being held in their city. They noticed at the time that all the hotels in the area were fully booked, and that there was not a single space left to accommodate the visitors. Their proposal was simple: rent out a room in their apartment with inflatable mattresses (air bed) and offer breakfast (breakfast).
The concept is seductive, and that's why Nathan Blecharczyka Harvard University graduate, decided to follow the two Franciscans on their adventure, becoming the company's third co-founder. Initially, the three partners focused on high-profile events where accommodation was hard to come by. Airbedandbreakfast was officially launched in 2008.
A publicity stunt that hits the bull's eye
To develop their project, the three Californians needed financing. So they came up with the rather original idea of creating a special edition of cereal boxes with a design inspired by the presidential candidates of the time, Barack Obama and John McCain. The "Obama O's" and "Cap'n McCain" boxes are a huge hit with consumers.
With the boxes selling for $40 each (all the same), the three entrepreneurs pocketed over $30,000 to develop their project. A winning bet for the young company, which soon attracted the attention of investors. The project and the inventiveness of the three businessmen won them over, and people in Silicon Valley.
Paul Graham, co-founder of start-up financing company Y Combinator, decided to invest in the Airbedandbreakfast project. He invited Brian Chesky, Nathan Blecharczyk and Joe Gebbia to join his business incubator for a three-month trial period. Since their site was already up and running, the three businessmen decided to use the $20,000 they had been allocated to travel to New York and promote their site.
From Airbedandbreakdast.com to Airbnb.com
The three Californians' project is gaining momentum. In 2009, they decided to change the name of their website from "Airbedandbreakfast.com" to "Airbnb.com". The services offered by the application are increasingly comprehensive: entire houses, apartments, private roomsetc. The number of users exploded, as did the number of employees: in 2010, fifteen people worked in the loft of the first two co-founders, prompting Brian Chesky to give up his room and lodge exclusively through the Airbnb network.
But it was in 2010 that Airbnb really took off. In November of that year, the three founders declared that of the 700,000 nights booked on their website, 80% had taken place in the last six months. Investors flocked to the company, and Brian Chesky, Joe Gebbia and Nathan Blecharczyk decided to take advantage of the opportunity to improve their site: design of the application, logo, enhancement of the services on offer, etc. All aspects were reviewed to ensure that they were in line with the company's strategy. All aspects are reviewed to to offer the most complete product.
The consecration
In just a few years, Airbnb has succeeded in establishing itself worldwide thanks to an innovative project and ever-increasing investment.
Ambitious projects
After a meteoric rise, Airbnb decided to diversify its services. First of all, the company launched projects to build homes between private individuals designed to accommodate travelers. The first building of this type was constructed in 2016 in the Japanese city of Yoshino. Stamped "100%" Airbnb, it was built on land donated free of charge by the town's mayor with the aim of promoting tourism.
As a second step, in 2017 the company launched a platform for hosting climate and political refugees called Open Homes. The main idea is to help victims of wars and other climatic disasters raging around the world.
Finally, in 2019, Airbnb decided to move into premium tourism by offering a division of luxury accommodations meeting high-end criteria. The services presented by the company even extend to animals, since Airbnb has been offering a range positioned on pet tourism.
Colossal investments
After receiving $20,000 from Y Combinator in 2008, Airbnb succeeded in building a customer base and growing its project. But it was in 2010 that things began to get serious: the company received a $7.2 million investment thanks to funds from Greylock Partners and Sequoia Capital. It was at this time that Airbnb really took off and became a company to invest in.
The following year, American actor Ashton Kutcher saw the company's potential and decided to invest $119.8 million in Airbnb through his A-Grade Investment fund. Finally, in March 2015, Airbnb received a financing round that enabled it to reach a valuation of $20 billion and confirmed its unicorn status.
In 2020, the Covid-19 crisis is raging around the world, causing tourism activity to plummet. Airbnb suffers greatly from this pandemic, and Brian Chesky goes so far as to declare to his employees that the company is going through the "most excruciating crisis of its existence". To cope with the crisis, Airbnb lays off nearly a quarter of its employees and raises nearly 2 billion dollars.
A difficult IPO
After the health crisis, Airbnb sees its valuation plummet to $18 billion. The flow of travelers came to a halt and the group was forced to postpone its IPO. However, the gradual recovery of the tourism business gave the company renewed hope, and it filed with the SEC in August 2019..
In December 2020, it's the consecration. Airbnb officially enters Wall Street with a share price of $68. By the end of the same day, it had risen to $146, 115% of its initial valuation. This tour de force enabled the company to recoup $3.4 billion. According to Bloomberg, Airbnb is now valued at $100 billion..
Airbnb: key information
The workforce
With the Covid-19 crisis, Airbnb had laid off nearly 1,900 employees, a quarter of its total workforce. Since then, the Californian company has seen its headcount rise, reaching the 5,600 mark in 2021.
Sales figures
In 2020, Airbnb reported sales of over $3 billion.
Initial public offering
After a first aborted attempt due to the pandemic, the company finally entered Wall Street in August 2020. Its stock was then valued at $68.
Business and strategic objectives
Thanks to a totally innovative concept, Airbnb has succeeded in establishing itself as one of the leaders in online accommodation rental. The company faces no competition and is now keen to develop different types of accommodation and surf on new tourism fashions such as animal tourism. What's more, the company aims to build 100% Airbnb properties all over the world to accommodate even more travelers.
Scalability
Airbnb enjoyed an ultra-rapid rise. The Covid-19 crisis halted this momentum, even dropping its valuation to $18 billion. However, the Californian company managed to climb back up the slope, and today boasts a valuation of almost $100 billion. After the health crisis, the world's population is demanding to travel, and Airbnb intends to take advantage of this.
