Airbnb, Inc. (/ˌɛərˌbiːɛnˈbiː/ AIR-BEE-en-BEE, an abbreviation of its original name, "Airbed and Breakfast"[5]) is an American company operating an online marketplace for short-and-long-term homestays and experiences in various countries and regions. It acts as a broker and charges a commission from each booking. Airbnb was founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. It is the best-known company for short-term housing rentals.[6][7]
 | |
 Headquarters at 888 Brannan Street | |
| Company type | Public |
|---|---|
| |
| Industry | Lodging |
| Founded | August 2008 in San Francisco, California, U.S. |
| Founders | |
| Headquarters | San Francisco, California, U.S. |
Area served | Worldwide |
Key people | |
| Services | |
| Revenue |  US$5.99 billion (2023) |
| US$429 million (2023) | |
| US$−352 million (2023) | |
| Total assets |  US$20.6 billion (2023) |
| Total equity | US$8.17 billion (2023) |
| Owner |
|
Number of employees | 6,907 (2023) |
| Subsidiaries |
|
| Website | airbnb |
| Footnotes / references [1][2][3][4] | |
History
After moving to San Francisco in October 2007, roommates and former schoolmates Brian Chesky and Joe Gebbia came up with an idea of putting an air mattress in their living room and turning it into a bed and breakfast.[8] In February 2008, Nathan Blecharczyk, Chesky's former roommate, joined as the chief technology officer and the third co-founder of the new venture, which they named "AirBed & Breakfast".[8][9] They put together a website that offered short-term living quarters and breakfast for those who were unable to book a hotel in the saturated market.[8] The site Airbedandbreakfast.com was launched on August 11, 2008.[10][11] The founders had their first customers in the summer of 2008, during the Industrial Design Conference held by Industrial Designers Society of America, where travelers had a hard time finding lodging in the city.[12]
After the founders raised $30,000 by selling cereal named after the two candidates of the 2008 United States presidential election, Barack Obama and John McCain, mostly at the 2008 Democratic National Convention,[13][14][15] computer programmer Paul Graham invited the founders to the January 2009 winter training session of his startup incubator, Y Combinator, which provided them with training and $20,000 in funding in exchange for a 6% interest in the company.[8][16][17] With the website already built, they used the Y Combinator investment to fly to New York to meet users and promote the site.[15] They returned to San Francisco with a profitable business model to present to West Coast investors. By March 2009, the site had 10,000 users and 2,500 listings.[18]
In March 2009, the name of the company was shortened to Airbnb.com to eliminate confusion over air mattresses; by then listings included entire rooms and properties.[8] By November 2010, out of 700,000 nights booked, 80% had occurred in the previous six months.[19] At the March 2011 South by Southwest conference, Airbnb won the "app" award.[20] In November 2012, Airbnb launched "Neighborhoods", a travel guide of 23 cities that helps travelers choose a neighborhood in which to stay based on certain criteria and personal preferences.[21]
By October 2013, Airbnb had served 9,000,000 guests since its founding in August 2008.[22] Nearly 250,000 listings were added in 2013.[23] In July 2014, Airbnb revealed design revisions to the site and mobile app and introduced a new logo. The logo, called the Bélo, is intended to serve as a symbol of "belonging", and consists of four elements: a head which represents people, a location icon that represents place, a heart to symbolize love, and a letter "A" to stand for the company's name.[24][25] It also announced a partnership with Concur, an expense reporting service for businesses, to make it easier for business travelers to report Airbnb stays as business expenses.[26]
In April 2015, following the easing of restrictions on U.S. businesses to operate in Cuba, Airbnb expanded to Cuba, making it one of the first U.S. companies to do so.[27][28] In July 2016, former Attorney General Eric Holder was hired to help craft an anti-discrimination policy for Airbnb after reports showed that hosts were refusing to accept lodging requests from guests whose names suggested that they were black.[29] As part of the reform, photos of prospective guests are hidden from hosts until requests for lodging are accepted.[30]
In November 2016, Airbnb launched "experiences", whereby users can use the platform to book activities.[31] In January 2017, along with serial entrepreneurs Gary Vaynerchuk, Ben Leventhal and Mike Montero, Airbnb led a $13 million investment in Resy, a restaurant reservation-booking app.[32] In May 2017, the company launched Airbnbmag, a magazine co-published with Hearst Communications.[33]
In February 2018, the company announced Airbnb Plus, a collection of homes that have been vetted for quality of services, comfort and design,[34] as well as Beyond by Airbnb, which offers luxury vacation rentals.[35] By October 2019, two million people were staying with Airbnb each night.[36] In April 2019, Airbnb produced and financed Gay Chorus Deep South, a documentary launched by its Rausch Street Films division. The rights were sold to MTV, which aired the program on its network.[37][38][39]
On World Animal Day (October 4) in 2019, Airbnb launched a new standalone category of experiences focused on those involving animals, as well as an animal welfare policy created with and backed by World Animal Protection.[40] In 2020, Airbnb started testing the Jetpack Compose framework in its Android app while the framework was still in developer preview.[41] Its developers later started utilizing Compose in production.[41][42]
During the COVID-19 pandemic, bookings dropped as much as 96% in some cities.[43] However, bookings rose in many rural areas.[44] The company pledged $250 million in payouts to hosts to compensate them for guest cancellations due to the pandemic.[45][46] The company also laid off approximately 1,900 employees, or about 25% of its workforce in the Americas, Europe, and Asia due to the pandemic.[47][48] On December 10, 2020, the company became a public company via an initial public offering, raising $3.5 billion.[49] Shares valued at $238 million were offered to hosts on the platform at the price of $68 per share.[50]
In March 2022, Airbnb suspended business in Russia and Belarus due to the sanctions resulting from the Russian invasion of Ukraine.[51][52] In May 2022, Airbnb ceased operations in China.[53] The decision was made primarily because of China's Zero-COVID policy, as well as complicated and expensive laws and regulations that required Airbnb to send detailed information on guests to the government of China, which can be used to track people.[54][55][56]
Airbnb was accused of being too willing to provide this information, which led to the resignation of an Airbnb executive, who was also a former deputy director of the Federal Bureau of Investigation, in 2019 after 6 months of working.[57][58] Airbnb had also been accused of allowing listings on land owned by the Xinjiang Production and Construction Corps, a Chinese state-owned paramilitary entity sanctioned under the Magnitsky Act for involvement in the persecution of Uyghurs in China.[59][60] In 2019, certain hosts in China were accused of discrimination by refusing to rent to Uyghurs.[61]
After temporarily banning parties in homes rented on the platform in August 2020 due to the COVID-19 pandemic,[62] in June 2022, Airbnb announced that it would permanently ban parties and events in homes on its platform, a position supported by hosts and their neighbors who complained of nuisances at Airbnb properties.[63] In August 2022, Airbnb rolled out technology to enforce this ban.[64]
Acquisitions
| # | Date | Company | Notes | Ref(s). |
|---|---|---|---|---|
| 1 | May 2011 | Accoleo | German competitor; launched the first international Airbnb office, in Hamburg | |
| 2 | March 2012 | CrashPadder | Added 6,000 international listings to its existing inventory; made Airbnb the largest lodging website in the United Kingdom. | [68][69] |
| 3 | November 2012 | NabeWise | Online city guide that aggregates curated information for specified locations; shifted the company's focus toward offering hyperlocal recommendations to travelers | [70][71] |
| 4 | December 2012 | Localmind | A location-based question and answer platform | [72] |
| 5 | September 2015 | Vamo | Immediately shut down the company, acquiring its employees | [73][74] |
| 6 | September 2015 | Lapka | Sensor startup | [75] |
| 7 | September 2016 | Trip4real | Travel activities marketplace | [76] |
| 8 | February 2017 | Luxury Retreats International | Canadian-based villa rental company; price was $300 million in cash and stock | [77][78] |
| 9 | February 2017 | Tilt.com | A social payment startup | [65] |
| 10 | November 2017 | Accomable | Startup focused on travel accessibility | [79][80] |
| 11 | November 2017 | AdBasis | Advertising technology platform built for A/B testing and multivariate ad testing | [81] |
| 12 | January 2019 | Gaest | Based in Aarhus, Denmark; provides a platform for posting and booking venues for meetings and other events | [82] |
| 13 | March 2019 | HotelTonight | Website for booking last-minute hotel rooms; price was $400 million | [83][84] |
| 14 | August 2019 | Urbandoor | Global online marketplace that offers extended stays to corporate clients | [85][86][65][87] |
| 15 | November 2023 | GamePlanner.AI | AI startup | [88] |
Corporate office history
In October 2011, Airbnb established an office in London, its first international office.[89] In early 2012, Airbnb opened offices in Paris, Milan, Barcelona, Copenhagen, Moscow, and São Paulo.[90] These openings were in addition to existing offices in San Francisco, London, Hamburg, and Berlin.[91] In September 2013, the company announced that it would establish its European headquarters in Dublin.[92][93]
In November 2012, Airbnb opened an office in Sydney, its 11th office location, and announced plans to launch the service in Thailand and Indonesia.[94] In December 2012, Airbnb opened an office in Singapore.[95] In April 2022, Airbnb instituted a policy of unlimited remote working for almost all its employees.[96]
Share sales, corporate borrowing and valuation history
In April 2009, the company received $600,000 in seed money from Sequoia Capital, with Youniversity Ventures partners Jawed Karim, Keith Rabois, and Kevin Hartz participating.[97] In November 2010, Greylock Partners and Sequoia Capital invested $7.2 million in a Series A round. In July 2011, Andreessen Horowitz, Digital Sky Technologies, General Catalyst, and A Grade Investments partners Ashton Kutcher and Guy Oseary invested $112 million in the company.[98][16]
In April 2014, TPG Capital invested $450 million in the company at a valuation of $10 billion.[99] Additional funding was provided by Andreessen Horowitz, Sequoia Capital, Dragoneer Investment Group, T. Rowe Price, and Sherpa Capital.[100] In June 2015, General Atlantic, Hillhouse Capital Group, Tiger Management, Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital, and Horizons Ventures invested $1.5 billion in the company.[101][102]
In September 2016, Google Capital and Technology Crossover Ventures invested $555.5 million in the company at a valuation of $30 billion.[103] In March 2017, Airbnb raised $1 billion in funding, bringing total funding raised to more than $3 billion and valuing the company at $31 billion.[104] In April 2020, Silver Lake and Sixth Street Partners acquired $1 billion in shares in the company at an $18 billion valuation[105] and $1 billion in debt at interest rates of 9%–11.5%.[106]
Corporate affairs
The key trends for Airbnb are (as at the financial year ending December 31):[107]
| Year | Revenue (US$ bn) | Net income (US$ m) |
Total assets (US$ bn)[108] |
Employees[109] | Sources |
|---|---|---|---|---|---|
| 2014 | 0.4 | ||||
| 2015 | 0.9 | ||||
| 2016 | 1.7 | [110][111] | |||
| 2017 | 2.6 | −70.5 | 6.0 | ||
| 2018 | 3.6 | −16.8 | 6.6 | ||
| 2019 | 4.8 | −674 | 8.3 | 5,465 | [112] |
| 2020 | 3.3 | −4,584 | 10.4 | 5,597 | |
| 2021 | 5.9 | −352 | 13.7 | 6,132 | |
| 2022 | 8.3 | 1,893 | 16.0 | 6,811 | [113][114][115] |
| 2023 | 9.9 | 4,800 | 20.6 | 6,907 | [116][117] |
Regulations by jurisdiction
Regulation of short-term rentals can include requirements for hosts to have business licenses, payment of hotel taxes and compliance with building, city and zoning standards. The hotel industry has lobbied for stricter regulations on short-term home rental[118] and in addition to government-imposed restrictions, many homeowner associations also limit short term rentals.[119]
Europe
- Amsterdam: Hosts can rent their properties for up to 30 nights per year to a group of no more than four at a time.[120] Short-term rentals are banned in certain parts of the city.[121]
- Barcelona: Vacation apartments are subject to the highest rate of property tax; platforms must share data with regulators.[122][123][124]
- Berlin: Short-term rentals require permission from authorities. Hosts can rent individual rooms with the condition that they live in most of the property.[125]
- Ireland: Short-term rentals are restricted to a maximum of 90 days per year for primary residences; registration is required with local authorities and planning permission is required where a property changes use from private residence to full-time short-term rental. However, compliance with these requirements is minimal, with one study finding only 38 listed properties had the required planning permission, out of 25,000.[126][127][128]
- London: Short-term rentals are limited to 90 days per year.[129][130]
- Lucerne: Short-term apartment rentals are limited to 90 days per year. [131] [132]
- Madrid: Listings without private entrances are banned.[133]
- Palma de Mallorca: Home-sharing sites are banned to contain tourism.[134]
- Paris: Hosts can rent their homes for no more than 120 days a year[135] and must register their listing with the town hall.[136]
- Rome: Short-term rental sites are required to withhold a 21% rental income tax.[137]
- Venice: Hosts must collect and remit tourist taxes.[138][139]
- Vienna: Short-term rentals are banned in specific "residential zones" within the city, with the exemption of apartments used primarily for the host's own residential needs.[140]
United States
- Arizona: Most regulations are not allowed since municipalities are prohibited from interfering in property rights.[141]
- Boston: The types of properties eligible for use as short-term rentals and the number of days per year a property may be rented are limited.[142][143][144][145]
- Chicago: Hosts are required to obtain a license. Single-night stays are prohibited.[146]
- Jersey City, New Jersey: Hosts are only allowed to rent for 60 days per year.[147][148]
- Los Angeles: Hosts must register with the city planning department and pay an $89 fee and cannot home-share for more than 120 days in a calendar year.[149][150]
- Miami: Short-term rentals are banned in most neighborhoods, in part due to lobbying efforts of the hotel industry.[151][152]
- New York City: Rentals under 30 days are prohibited unless the host is present on the property. Hosts are required to obtain a license and relatively few licenses have been issued.[153]
- Portland, Oregon: The number of bedrooms in a single unit that may be listed is limited.[154]
- San Diego: Units for short-term rental are limited to 1% of the housing stock and licenses are required.[155]
- San Francisco: Registration by hosts is required.[156]
- Santa Monica, California: Hosts are required to register with the city and obtain a license and are also prohibited from listing multiple properties.[157]
- Seattle: Hosts must obtain licenses and cannot rent more than two units.[158]
- Washington, D.C.: Hosts must obtain a short-term rental license, and, if the host is not present, those rentals are limited to a combined 90 days each year.[159]
- West New York, New Jersey: Short-term rentals are banned.[160]
Canada
- Toronto: Short-term rentals must be in a host's primary residence and hosts must obtain licenses.[161]
- Vancouver: Short-term rentals must be in a host's primary residence and hosts must obtain licenses.[162][163]
Asia
Criticism and controversies
The company has been criticized for possibly enabling increases in home rents,[167] refusing to provide sensitive customer data to governments, and allowing listings in West Bank settlements. Airbnb has been criticized by the hotel industry for not being subject to fair regulations.[168] Critics have also noted how Airbnb resists sharing its listing data with regulators, often citing privacy protections as its reason for not cooperating.[169]
Effects on housing affordability
Several studies have found that long-term rental prices in many areas have increased because landlords have kept properties off the longer-term rental market to instead get higher rental rates for short-term housing via Airbnb.[170][171][172][173][174][126][175][176] Inside Airbnb, a watchdog journalism website, has accused the company of manipulating its data to portray a different result.[177] Landlords have also been accused of illegally evicting tenants to convert properties into higher-rent Airbnb listings.[178] Concerns on the effect of Airbnb on housing affordability has resulted in increased lodging regulations and restrictions, which have generally been opposed by Airbnb via lobbying efforts.[179] This phenomenon is has been dubbed the "Airbnb effect".[180]
Inclusion of listings in Israeli settlements
In November 2018, Airbnb announced that it would remove the approximately 200 "listings in Israeli settlements in the occupied West Bank that are at the core of the dispute between Israelis and Palestinians". However, after affected property owners filed lawsuits against Airbnb in both Israel and the United States alleging discrimination based on place of residence, in April 2019, the company reversed its plans to remove listings in the West Bank and instead promised to donate any profits from these listings to non-profit organizations dedicated to humanitarian aid.[181][182][183]
According to 2020 and 2023 reports by the United Nations, the company continues to violate International Human Rights, profiting from illegal Israeli settlements in Occupied Palestinian Territories.[184][185] On February 12, 2020, Airbnb was included on a list of companies operating in West Bank settlements involved in activities that "raised particular human rights concerns" published by the United Nations Human Rights Council. The company was categorized under "the provision of services and utilities supporting the maintenance and existence of settlements".[186][187]
Criticism by the hotel industry
Airbnb has been criticized by the hotel industry due to its competitive effects and its different regulations. This has led to a decline in hotel revenue in some markets and an increase in lobbying by the hotel industry.[188][189][190]
Lack of loyalty program
Airbnb is one of the few major travel companies without a loyalty program, which has led to criticism by many customers. This is in part attributed to its lack of business customers, as reported by The Wall Street Journal.[191]
Objectivity of guest reviews
Airbnb features a review system in which guests and hosts can rate and review each other after a stay. Hosts and guests are unable to see reviews until both have submitted a review or until the time period to review has closed, a system that aims to improve accuracy and objectivity by removing fears that users will receive a negative review in retaliation if they write one. However, the truthfulness and impartiality of reviews may be adversely affected by concerns of future stays because prospective hosts may refuse to host a user who generally leaves negative reviews. The company's policy requires users to forego anonymity, which may also detract from users' willingness to leave negative reviews. These factors may damage the objectivity of the review system.[192][193][194]
Response to activities of far-right extremists
In August 2017, Airbnb cancelled numerous bookings and closed accounts belonging to attendees of the white supremacist Unite the Right rally in Charlottesville, Virginia, citing its terms of service in which members must "accept people regardless of their race, religion, national origin, ethnicity, disability, sex, gender identity, sexual orientation, or age."[195] The move was criticized by Jason Kessler, organizer of the rally.[196]
In January 2021, Airbnb was criticized for allowing participants in the January 6 attack on the United States Capitol to book units on the platform in the Washington metropolitan area, despite most hotels in the vicinity of Capitol Hill banning far-right extremists.[197] After the possibility of further violence during the Inauguration of Joe Biden, Airbnb announced the day after the Capitol raid that it was banning all bookings in the region prior to the inauguration.[198]
In 2023, Airbnb was criticized by conservative media for removing the parents of Canadian far-right activist Lauren Southern from its platform. Airbnb quickly reversed its decision, saying it had been a "mistake".[199]
In May 2024, a former Airbnb contractor alleged in a whistleblower complaint that the company had weakened its policies against extremists and dissolved its team for removing them. Airbnb denied the allegations.[200][199]
Sponsorship of 2022 Winter Olympics
Airbnb was one of the 15 leading sponsors of the 2022 Winter Olympics, held in Beijing, and was asked by human rights activists and groups to drop its sponsorship in March 2021 as part of diplomatic and activist boycotts over alleged human rights violations by the Chinese Communist Party, in particular the persecution of Uyghurs in China. These requests were ignored by the company.[201][202][203][204]
Length of terms of service agreements
In 2014, linguist Mark Liberman criticized the extreme length of the legal agreements that Airbnb members are required to accept, with the site's terms of service, privacy policy, and other policies amounting to "55081 words, or about the size of a short novel, though much less readable".[205]
Legal issues
Illegal behavior by hosts
Hosts have been accused of circumventing tax regulations,[206] circumventing Airbnb's background checks and subjecting guests to last-minute cancellations, moldy or rodent-infested lodging, theft, invasion of privacy, and even rape and murder,[207][208][209][210] as well as bait-and-switch scams in which the guest does not receive the promised accommodation.[211][212] Airbnb has noted that the number of these incidents is not statistically significant and has banned violators and associated accounts.[213]
In July 2024, CNN noted that Airbnb includes significant disclaimers on some of its policies, such as notifying users that its background checks should not be relied on to identify "all past criminal convictions or sex offender registrations … or other red flags" and that convictions for "murder, terrorism, rape or child molestation" are not automatic disqualifiers for a host.[214]
Hidden cameras
There have been incidents of hosts secretly recording their guests using hidden cameras, including in areas such as bedrooms and bathrooms.[215][216][217] Publications such as The Washington Post[218] and Fast Company[219] have published guides on how to find hidden cameras in an Airbnb rental.[216] In a 2023 deposition, an Airbnb employee testified that the company does not notify law enforcement as a matter of practice when a complaint of a hidden camera is raised, but may contact hosts about complaints for its internal inquiries. Law enforcement experts said the company's practice could hinder criminal investigations due to suspects having time to destroy evidence.[214]
In March 2024, Airbnb announced a ban on indoor cameras for properties listed on the site, scheduled to take effect on April 30. The changes also involve a requirement for hosts to disclose the use of noise-decibel monitoring equipment.[220][216] A CNN investigation published in July 2024 found that Airbnb "consistently fails to protect its guests despite knowing hidden cameras are a persistent concern within its industry" and that the strategies it relies on "have been aimed at preventing regulation of the short-term rental market to allow the company to distance itself from responsibility for guest safety and privacy."[214]
Failure to provide required information to governments
Many governments have passed laws requiring that Airbnb provide guest information so that local regulations can be enforced and hotel taxes are collected. Airbnb contested one such law in New York.[221][222] However, in May 2019, Airbnb agreed to turn over some anonymized information for approximately 17,000 listings so that the city could pursue illegal rentals.[223] Similar cases were settled in Boston and Miami.[224]
Airbnb refused to provide required information to the Belgian government, claiming the obligation to provide the information was not compatible with European Union law. The Belgian Constitutional Court referred the dispute to the European Court of Justice, which in April 2022 ruled that the requirement to transmit to tax authorities certain particulars of tourist transactions was not contrary to European Union law and referred the case back to the Belgian Constitutional Court.[225]
Legality of service fees in the Netherlands
In March 2020, a subdistrict court ruling in the Netherlands found that Airbnb charging service fees to both the host and the guest was illegal and that the 30,000 people who had rented as guests have a right for reimbursement if they file claims. Airbnb filed countersuits in an attempt to gain clarity on the ruling.[226]
See also
References
Further reading
External links
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