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How Airbnb Makes Money—Key Financial & Business Statistics

A breakdown of Airbnb's products, business model, and key business metrics.

Caleb Dismuke
Caleb Dismuke
3 min read

Updated quarterly. Last updated: August 17, 2021.


Airbnb Overview

Ticker ABNB
Industry Travel and Lodging
CEO Brian Chesky
Year Founded 2008
IPO Date December 10, 2020
TTM Revenue $4.4 billion
TTM EBITDA ($2.8) billion
TTM FCF $1.4 billion

What Airbnb Does

Airbnb lets people (hosts) rent their homes to complete strangers.

But not just homes. Its listings include private rooms, luxury villas, treehouses, and even igloos. They have hosts in 100,000 cities across more than 220 countries and regions.

Airbnb's products:

  • Experiences: One-of-a-kind activities hosted by experts (both online and in-person).
  • Airbnb Plus: Homes verified by Airbnb for quality.
  • Airbnb Lux: Luxury homes for rent. Includes other goodies like a personal chef and massage therapist.
  • Airbnb for Work: Helps companies book trips for their employees. Business travel is a HUGE business. Pre-pandemic, companies spent $1.2 trillion annually on business travel (includes airfare, lodging, etc.).
  • Hotel Tonight (acquired in April 2019): Helps you book last-minute hotel deals.

Airbnb Revenue, Gross Profit, EBITDA, & Free Cash Flow


How Airbnb Makes Money—Its Business Model

Airbnb makes money by taking a cut (%) of each transaction.

Its revenue consists of service fees, net of incentives and refunds, charged to hosts and guests.

A transaction example:

Host:
Price/night set by host $100.00
Less: Host fees $3.00
Total paid to host $97.00
Guest:
Price/night set by host $100.00
Guest fees $12.00
Lodging taxes $4.00
Total collected from guest (gross GBV) 116.00
Airbnb:
Total service fees (collected at booking and
recognized as revenue upon check-in)
$15.00

Airbnb's Key Business Metrics

Airbnb tracks three metrics to measure the performance of its business:

  • Number of nights and experiences booked
  • Gross booking value (GBV)
  • Gross booking value per night and experience booked

Number of nights and experiences booked (in millions)

  • The number of nights and experiences booked is the total number of nights booked for stays and the total number of seats booked for experiences, net of cancellations.

Gross booking value

  • GBV (gross booking value) is the dollar value of each booking on Airbnb's platform during a specified period. The amount includes host earnings, service fees, cleaning fees, and taxes, net of alterations and cancellations.

Gross booking value per night and experience booked

  • A better way to describe this metric: Gross booking value per transaction. I think this metric is a decent gauge for pricing power🤔

Airbnb's Competitors

  • Online travel agencies (OTAs) like Booking Holdings and Expedia.
  • Expedia owned VRBO.
  • Hotel chains like Marriott, Hilton, and other boutique and independent hotels.

Some of its competitors are copying parts of their business. For example, Marriott recently released Homes & Villas. It’s a curated offering of professionally managed, high-end properties.


2020 IPOs

Caleb Dismuke

I enjoy spending time with my family, cooking, and brainstorming business ideas.