Airbnb, Inc.
Airbnb, Inc., together with its subsidiaries, operates a platform for stays, experiences, and services worldwide. The company's marketplace connects hosts and guests online or through mobile devices to book spaces, experiences, and services. It also offers gift cards. The company was formerly known as AirBed & Breakfast, Inc. and changed its name to Airbnb, Inc. in November 2010. Airbnb, Inc. was founded in 2007 and is headquartered in San Francisco, California.
What does it do?
Airbnb is an online marketplace that lets ordinary people rent out their homes, spare rooms, or even unique spaces like treehouses and boats to travellers looking for somewhere to stay. Think of it like eBay, but instead of selling old stuff, hosts are renting out places to sleep. A traveller in Paris can book a local's apartment instead of a hotel room, often for less money and with a more authentic experience. Airbnb also lets hosts offer 'Experiences' — things like cooking classes or guided hikes — though this is a much smaller part of the business.
Airbnb fundamentally disrupted the hotel industry by turning millions of private homes into accommodation inventory without owning a single property itself — a capital-light model that investors love because it scales without huge costs. With $12.2 billion in revenue and $2.5 billion in net profit, it has proven it can be genuinely profitable, which many platform companies struggle to do. Right now, investors are watching whether the post-pandemic travel boom is becoming the new normal or starting to fade.
How does it make money?
Airbnb makes almost all of its money by charging fees on every booking made through its platform — typically around 3% from the host and up to 14% from the guest, so both sides pay to use the service. On $12.2 billion in revenue (up from $11.1 billion the prior year, a roughly 10% increase), this fee model means Airbnb never has to own or maintain a single property. The company keeps costs relatively low because its main assets are software and brand trust, not bricks and mortar. Experiences and gift cards add a small additional revenue layer, but stays are the overwhelming driver.
Why do investors care?
The growth story rests on two ideas: more people travelling more often, and more hosts joining the platform in new markets, especially outside North America and Western Europe. Airbnb is also pushing into longer-term stays — people renting for weeks or months, not just weekends — a trend accelerated by remote work that commands higher total booking values. For the thesis to work, Airbnb needs to keep adding supply (hosts) and demand (guests) without regulators shutting down listings in major cities. Investors also hope the company can expand margins further as its cost base stays relatively fixed while revenue grows.
Deep Dive
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