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From Spare Rooms to Global Domination: The Rise and Challenges of Airbnb

Introduction to Airbnb

Airbnb is an online rental marketplace that provides a platform for individuals to book apartments and bookable activities all over the world. Initially, it started as a simple idea of renting out a spare room in San Francisco to provide extra cash for the rent.

However, the idea grew into a massive platform that connects four million hosts with six million listings available in 220+ countries and 100,000 cities globally. In this article, we will delve into the origins of Airbnb, its explosive growth, as well as its competitive advantages.

Overview of Airbnb

Airbnb was founded in 2008 by three friends, Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, who were struggling to pay their San Francisco rent. Along the way, they discovered that people were struggling to find accommodation while attending conferences or special events.

Therefore, they decided to offer air mattresses and breakfast for guests who needed a place to stay, during the 2008 Democratic National Convention. Airbnb’s slogan, Belong Anywhere,” emphasizes its mission to allow customers to experience the world as a local.

Today, the company has transformed into a formidable platform that connects people with properties that meet their unique needs.

Founders and Growth of Airbnb

Airbnb’s headquarters is in San Francisco, where it was founded. The company quickly grew, and by 2011, it had listings in over 13,000 cities globally.

The platforms largest growth rate was between 2015 and 2016 when its listing grew from 1 million to over 3 million within 11 months. Furthermore, in 2020, Airbnb’s annual revenue was over $4.7 billion.

The company has also faced significant challenges such as legal issues, safety, and public health. To combat these, Airbnb has implemented several measures to remove unlawful operators from its platform and ensure safety for its guests.

Competitive Advantages of Airbnb

One of the significant advantages of Airbnb is its rebranding, delivered through a unique experience for guests. The company has become popular for its range of property types, such as beach houses, cabins, and even hotels.

Airbnb offers customers affordable and authentic accommodation opportunities that aren’t always available in traditional hotel setups. Additionally, Airbnb’s property diversity has also allowed the platform to service every budget range.

Airbnb’s ability to retain its talent pool is another significant competitive advantage. The company has created an active network effect, which allows it to increase its retention rate by creating open communication channels with its employees.

This retention rate is partly due to the culture and belief system created at Airbnb. The companys talent management framework is unique, and the belief system that drives it is based on the importance of fostering relationships, promoting transparency, and creating positive experiences for all stakeholders, including the hosts, guests, and employees.


In this article, we have discussed the evolution of Airbnb, from its humble beginnings as an air mattress rental service in San Francisco to its market dominance as a global online rental marketplace that services over 100,000 cities worldwide. Additionally, we have delved into Airbnb’s competitive advantages, such as its branding and property diversity, which have allowed it to take on the traditional hotel industry.

Airbnb has a unique, dynamic culture and has created a strong sense of community among its stakeholders that foster transparency, trust, and positive interactions. As such, Airbnb seems poised to maintain its market dominance in the online rental market space for years to come.

Challenges and Controversies of Airbnb

Despite its remarkable growth and success, Airbnb has faced a host of challenges and controversies throughout its journey. In this section, we will explore some of the key issues that the company has had to navigate, from early struggles and business model questions, to legal and tax issues.

Early Struggles and Business Model Questions

In the early days of Airbnb, the company struggled to generate significant revenue, with the founders only earning a few hundred dollars per month on average. Additionally, there were questions about the company’s business model and legitimacy, with some people questioning whether it was a legitimate business or just a platform for people to rent out their homes and make some extra cash.

The company also faced challenges in finding its niche, experimenting with various business ventures such as selling Obama-branded cereal boxes without much success.

Legal and Tax Issues

Perhaps one of the biggest challenges that Airbnb has faced is navigating the complex legal and tax landscape that governs the short-term rental industry. One major issue that Airbnb has encountered is the impact that its platform has had on rental prices in some cities.

Debates have been raised surrounding Airbnb’s role in driving up rental prices in cities like New York and San Francisco, contributing to a housing affordability crisis. Airbnb has also faced legal challenges to the legitimacy of its business model, with some cities imposing fines on Airbnb hosts for illegal hotel operation.

Some cities have even sought to ban the platform altogether, pointing to the potential negative impact it has on local communities, such as noise and traffic issues, as well as concerns around the safety standards of homes being rented out. Airbnb’s Financial Performance

Despite these challenges, Airbnb has continued to grow and expand, achieving substantial financial success along the way.

Here, we will explore some of the key financial metrics that demonstrate Airbnb’s financial performance, including its IPO and funding, as well as its revenue and bookings.

IPO and Funding

In December 2020, Airbnb had its initial public offering (IPO) on the NASDAQ, raising $3.5 billion. This made it one of the largest IPOs of the year, despite the pandemic’s impact on the travel industry.

The company’s share price surged on its first day of trading, reaching as high as $165 per share, valuing Airbnb at over $100 billion. In addition to its IPO, Airbnb has also been successful in securing funding from investors.

According to Crunchbase, the company has raised a total of $6.4 billion in funding, with its last fundraise being in April 2021. This has allowed the company to finance its continued growth and expansion into new markets and business areas.

Revenue and Bookings

One of the key financial metrics that reflects Airbnb’s success is its revenue growth. According to its latest financial report, the company generated over $6 billion in revenue in 2019, a significant increase from the $2.6 billion it generated in 2017.

Airbnb’s bookings are another important metric that reflects the platform’s financial success. In 2021, Airbnb’s gross bookings totaled $46.88 billion, demonstrating the continued demand for its services despite the pandemic’s impact on the travel and tourism industries.


In conclusion, while Airbnb has faced significant challenges and controversies throughout its journey, the company’s continued success and financial performance demonstrate its resilience and adaptability. Despite challenges surrounding its business model, legal and tax issues, and early struggles to generate revenue, Airbnb has continued to grow and expand, achieving significant financial success along the way.

As the travel industry recovers from the pandemic, it will be interesting to see how Airbnb continues to evolve and innovate to meet the changing needs of its customers and stakeholders. Airbnb’s Workforce and Organizational Size

One of the key factors that have contributed to Airbnb’s success is its workforce and organizational size.

In this section, we will explore the global employee count of Airbnb, as well as its ranking methodology. Additionally, we will examine some of Airbnb’s main competitors, delving into their strengths, weaknesses, and unique value propositions.

Global Employee Count

Airbnb currently has approximately 6,100 employees worldwide, as reported in June 2021. However, the COVID-19 pandemic has had a significant impact on the company’s workforce.

In May 2020, Airbnb announced that it would be laying off approximately 1,900 employees, or 25% of its workforce, citing a significant decrease in business activity amid the pandemic.

Competitor Ranking Methodology

Ranking Airbnb’s competitors can be challenging because many companies in the travel and hospitality industry offer a mix of services, including hotels, flights, and vacation rentals. One common approach to competitor ranking is to consider publicly available information, such as revenue, listings, bookings, funding, valuation, and employees.

Competitors of Airbnb

Booking is one of Airbnb’s largest competitors, offering a vast selection of hotels and vacation rentals, as well as flights. The company operates in 43 languages and has over 28 million listings across the globe.

Unlike Airbnb, allows customers to book weekly and monthly rentals, in addition to shorter stays.


Vrbo (formerly known as HomeAway) specializes in vacation rentals, offering approximately two million properties in over 190 countries. The company has also acquired several other vacation rental platforms, such as Stayz and Bookabach.

In 2019,

Vrbo was acquired by

Expedia Group, the second-largest travel holding company in the world.


Expedia is another significant player in the travel industry, offering a range of services such as hotels, flights, and vacation rentals. The company owns several brands, including and

trivago, and has been a direct competitor of Airbnb since 2015.

Google Travel

Launched in 2019,

Google Travel allows customers to book flights, hotels, and vacation rentals directly through Google’s platform. The product has faced regulatory scrutiny, with the American Choice and Innovation Online Act accusing Google of using its market dominance to disadvantage other travel companies.


Owned by Priceline (now known as Booking Holdings),

Agoda primarily focuses on hotel bookings but also offers flights and other travel-related services. The company has a strong presence in Asia and is known for its locally focused approach. (formerly known as Ctrip) is often referred to as the Chinese version of Booking and

Expedia. The company expanded internationally through the 2016 acquisition of Skyscanner and has ambitions to continue to grow its global market share.


TripAdvisor is primarily known for its comprehensive ratings and reviews for hotels and other travel-related services. The company also has an Instant Booking feature that allows customers to book hotels directly through the platform, as well as book activities.


trivago is an aggregation site that enables customers to compare prices and services for hotels and flights worldwide. In 2021,

trivago formed a strategic partnership with

Expedia and

Vrbo, allowing its customers to access vacation rentals through the platform., owned by

Expedia, offers a wide range of hotel and resort bookings, in addition to vacation rentals. The company was acquired by IAC in 2001 and has been part of the

Expedia brand since 2002.

OYO Rooms

OYO Rooms is a technologically-enabled hotel chain that offers standardized experiences across all its properties. The company has faced several controversies regarding its business practices, including poorly maintained properties and unpaid bills to hotel owners.

In 2019, OYO reported a decline in revenue and funding due to the pandemic.


Hurb, previously known as Hotel Urbano, is South America’s leading metasearch engine for hotels and vacation rentals. The platform has attracted major investors such as Ignacio Alonso, the former CEO of the South American arm of


HomeToGo is a Germany-based aggregation site that sources listings from a variety of local booking platforms. The company recently underwent a rebranding, emphasizing its focus on simplifying the vacation rental booking process.

Plum Guide

Plum Guide is a luxury-focused platform that curates high-end properties and offers a vetting process called the Plum Test to ensure quality standards. The platform has received significant investment funding and is known for its unique, curated approach.


MakeMyTrip is one of India’s travel pioneers, offering a wide range of booking options such as flights, hotels, and vacation packages. The company has faced significant challenges during the pandemic, leading to a decline in both revenue and funding.


Hipcamp offers outdoor stays, such as camping and RV rentals, and is known for its quality-focused approach to property vetting. The platform has attracted significant funding and has been praised for its unique value proposition in the travel industry.


In conclusion, Airbnb’s success in the travel industry has attracted several competitors, offering a range of services such as hotels, flights, and vacation rentals. While these competitors have unique strengths and weaknesses, they all share a common goal of providing customers with the best possible travel experience.

The future of the travel industry remains unclear, particularly as the pandemic continues to impact global tourism. However, it is clear that companies such as Airbnb and its competitors will play a crucial role in shaping the future of travel.

In summary, this article explored various aspects of Airbnb, including its introduction as an online rental marketplace, competitive advantages, challenges, financial performance, workforce, and major competitors. We learned about Airbnb’s explosive growth, its branding and property diversity, as well as the legal and tax issues it has faced.

Additionally, we discussed Airbnb’s IPO and funding, its revenue and bookings, and the size of its global workforce. We also examined some of the key competitors in the market, their strengths, and their unique value propositions.

Overall, the rise of Airbnb and its competitors highlights the evolving landscape of the travel and hospitality industry, with a focus on innovation, customer experience, and adaptability. As the industry continues to navigate challenges and embrace new opportunities, it’s clear that the competition between these players will shape the future of travel and accommodation.

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