Question

how can AirBnb can make extra revenue from the services or variable income , describe with numbers

Answer 1

Airbnb is a private, global company that offers an online marketplace platform for hospitality services. Airbnb is accessible through its official website or by an app. Members of Airbnb can use the platform to arrange or offer to lodge for home stays or tourism experiences.

Airbnb’s platform is designed for individuals that are private owners of any listed properties with the current property count of 6,370,563 listings across 191 countries and over 2 million individuals use the Airbnb to gain access to leasing, rental property insights.

Airbnb makes a commission from every booking that is completed. There are approx. 28,571,438 bookings a year, which is approx. 23,810 booking per month. With around 150 million users and impressive global statistics that, as of August 2019, include gross revenue of $4,308,726,681, year-on-year growth of 21% and a current property count of 6,370,563 listings across 191 countries.

The company gets its share of revenue from these transactions through two sources:

1. Commission from Hosts/Owners

Airbnb deducts a flat 10% commission from hosts for every booking done through the platform. Hosts also have to pay a 3% fee for the processing of the payments of the guests. When a reservation is booked, guests pay the service fee unless the host cancels or retracts the listing. If the reservation is altered, Airbnb adjusts service fees to accommodate users.

2. Transaction fee from Travelers/Guests

6-12% of the booking amount is set as service fee by Airbnb for travelers for every confirmed booking. This fee is non-refundable.

Say, for example, that guests at Airbnb properties spent $10 million in New York City in 2019, including the money spent at restaurants and theaters and other attractions while visiting the city. It is expressed as extra income for Airbnb hosts (both non-accommodation spending by visitors and the extra income going to Airbnb hosts) and runs it through input–output models to generate multiplier effects that yield their final numbers for output and employment supported in each city.