Airbnb

Airbnb, Inc. (pronounced /ˈɛərbiːɛnbiː/ AIR-bee-ehn-bee[6] and stylized as airbnb) is an American vacation rental online marketplace company based in San Francisco, California, United States. Airbnb offers arrangement for lodging, primarily homestays, or tourism experiences. The company does not own any of the real estate listings, nor does it host events; it acts as a broker, receiving commissions from each booking.[7]

Airbnb, Inc.
Type of site
Private
Available in53 languages
List of languages
Albanian, Arabic, Armenian, Azerbaijani, Bosnian, Bulgarian, Catalan, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, Georgian, German, Greek, Hebrew, Hindi, Hungarian, Icelandic, Indonesian, Irish, Italian, Japanese, Korean, Latvian, Lithuanian, Macedonian Malay, Maltese, Norwegian, Polish, Portuguese, Romanian, Russian, Serbian, Simplified Chinese, Slovak, Slovenian, Spanish, Swahili, Swedish, Tagalog, Thai, Traditional Chinese, Turkish, Ukrainian, Vietnamese, Xhosa and Zulu[1]
FoundedAugust 2008 (2008-08) in San Francisco, California
Headquarters888 Brannan Street, San Francisco, California
Area servedWorldwide
Founder(s)Brian Chesky
Joe Gebbia
Nathan Blecharczyk
Key people
IndustryLodging
ServicesLodging
Hospitality
Revenue $2.6 billion (2017)
Operating income $450 million (2017)
Net income $93 million (2017)
Employees6,300 (2020)
SubsidiariesLuxury Retreats International Inc.
Crowdtilt
Accomable
Aibiying
Trooly, Inc.
Deco Software Inc.
Trip4real Experiences, S.L.
Lapka, Inc.
Airbnb Uk Limited
HotelTonight
URLairbnb.com
Alexa rank 318 (April 2020)[3]
[4][5]
Airbnb's headquarters at 888 Brannan Street, in San Francisco, California

The company was conceived after its founders rented out an air mattress in their living room, effectively turning their apartment into a bed and breakfast, to offset the high cost of rent in San Francisco. Airbnb is a shortened version of its original name, AirBedandBreakfast.com.

History
See also: Timeline of Airbnb
Joe Gebbia, Airbnb founder (right)

Shortly after moving to San Francisco in October 2007, roommates and former schoolmates Brian Chesky and Joe Gebbia came up with the 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, breakfast, and a business networking opportunity for those who were unable to book a hotel in the saturated market.[8] The site Airbedandbreakfast.com officially launched on August 11, 2008.[10][11] The founders had their first customers in town 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]

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 funding in exchange for a small interest in the company.[13][14][15] With the website already built, they used the Y-Combinator investment to fly to New York to meet users and promote the site. 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.[15]

In March 2009, the name of the company was shortened to Airbnb.com, and the site's content had expanded from air beds and shared spaces to a variety of properties including entire homes and apartments, private rooms, and other properties.[16]

In April 2009, the company received seed money from Sequoia Capital. In November 2010, they raised financing from Greylock Partners and Sequoia Capital in a Series A round, and announced that out of 700,000 nights booked, 80% had occurred in the previous six months.[17]

In June 2012, Airbnb announced its 10,000,000th night booked, doubling business in the previous five months.

At the 2011, South by Southwest conference, Airbnb won the "app" award.[18] In October 2011, Airbnb established an office in London, its first international office.[19]

Due to the growth of international end-users, in early 2012, Airbnb opened offices in Paris, Milan, Barcelona, Copenhagen, Moscow, and São Paulo.[20] These openings were in addition to existing offices in San Francisco, London, Hamburg, and Berlin.[21] In September 2013, the company announced that it would establish its European headquarters in Dublin.[22][23]

In November 2012, Airbnb opened an office in Sydney, Australia, its 11th office location, and announced plans to launch the service in Thailand and Indonesia.[24][25] In December 2012, Airbnb announced its strategy to move more aggressively into the Asian market with the launch of an office in Singapore.[26]

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.[27][28][29][30]

By October 2013, Airbnb had served 9,000,000 guests since its founding in August 2008.[31] Nearly 250,000 properties were added in 2013.[32]

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.[33][34] In April 2015, following the Obama administration's 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.[35][36]

In the summer of 2016, at the request of three members of the United States Senate, the Federal Trade Commission began investigating how Airbnb affected housing costs. In October 2016, New York Governor Andrew Cuomo signed a bill charging Airbnb fines for violations of local housing laws. The New York Times reported that these events were related and part of a "plan that the hotel association started in early 2016 to thwart Airbnb".[37]

In January 2017, Airbnb led a $13 million investment in restaurant reservation-booking app, Resy, along with serial entrepreneurs Gary Vaynerchuk, Ben Leventhal and Mike Montero.[38]

Airbnb first became profitable during the second half of 2016. Airbnb's revenue grew more than 80% from 2015 to 2016.[39][40] After a $200 million profit in 2018, Airbnb posted a loss of $322 million in 2019.[41]

In February 2018, the company announced Airbnb Plus, a collection of homes that have been vetted for quality of services, comfort and design,[42] as well as Beyond by Airbnb, which offers luxury vacation rentals.[43] By October 2019, two million people were staying with Airbnb each night.[44]

During the COVID-19 pandemic, Airbnb suffered a significant drop in bookings, estimated at between 41% and 96%.[45][46] In response, the company lowered its internal valuation from $31 billion to $26 billion, and has considered delaying plans for an IPO.[47] On March 30, CEO and Head of Community Brian Chesky penned a letter to hosts, pledging $250 million for widespread guest cancellations.[48][49]

On May 5, 2020, Brian Chesky sent a memo to all employees announcing the company would be laying off approximately 1,900 employees, or about 25% of its workforce in the Americas, Europe, and Asia due to the COVID-19 pandemic.[50]

Funding

In January 2009, the company received $20,000 in venture funding from Y Combinator.[51]

In April 2009, the company raised $600,000 from Sequoia Capital, with Youniversity Ventures partners Jawed Karim, Keith Rabois, and Kevin Hartz participating.[52][53]

In November 2010, it raised $7.2 million in a Series A round of funding led by Greylock Partners and Sequoia Capital.[17]

In July 2011, it raised $112 million in financing led by Andreessen Horowitz. Other early investors included Digital Sky Technologies, General Catalyst Partners, and A Grade Investments partners Ashton Kutcher and Guy Oseary.[54][55][56]

In April 2014, the company closed on an investment of $450 million by TPG Capital, with the company value estimated to be approximately $10 billion.[57] Additional funding was provided by Andreessen Horowitz, Sequoia Capital, Dragoneer Investment Group, T. Rowe Price and Sherpa Capital.[58]

In June 2015, Airbnb raised $1.5 billion in Series E funding led by General Atlantic, and joined by Hillhouse Capital Group, Tiger Management, Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital, and Horizons Ventures.[59][60]

In September 2016, Airbnb raised $555.5 million in funding from Google Capital and Technology Crossover Ventures, valuing the company at $30 billion.[61] 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.[62]

In April 2020, Airbnb raised $1 billion in another round of funding from private equity firms Silver Lake and Sixth Street Partners.[63]

Acquisitions

On May 31, 2011, Airbnb acquired a German competitor, Accoleo.[64] This takeover, as well as other similar acquisitions, launched the first international Airbnb office, in Hamburg.[65][66] Before the 2012 Summer Olympics, Airbnb acquired London-based rival CrashPadder,[67] subsequently adding 6,000 international listings to its existing inventory. This acquisition made Airbnb the largest lodging website in the United Kingdom.[68][69] In November 2012, Airbnb acquired NabeWise, an online city guide that aggregates curated information for specified locations.[70] The acquisition shifted the company's focus toward offering hyperlocal recommendations to travelers.[71] In December 2012, Airbnb announced the acquisition of Localmind, a location-based question and answer platform.[72]

In February 2017, the company acquired Luxury Retreats International, a Canadian-based villa rental company, for approximately $300 million in cash and stock.[73][74] In February 2017, Airbnb acquired Tilt.com, a social payment startup.[64]

On November 16, 2017, the company acquired Accomable, a startup focused on travel accessibility.[75][76] In March 2019, the company acquired HotelTonight, a website for booking last-minute hotel rooms, for over $400 million.[77][78]

In August 2019, Airbnb acquired Urbandoor,[79] a global online marketplace[80] that offers extended stays to corporate clients. The terms of this deal were not disclosed.[81][64]

Product overview

Airbnb provides a platform for hosts to accommodate guests with short-term lodging and tourism-related activities.[82] Guests can search for lodging using filters such as lodging type, dates, location, and price, and can search for specific types of homes, such as bed and breakfasts, unique homes, and vacation homes.[82][83][84] Before booking, users must provide personal and payment information.[82] Some hosts also require a scan of government-issued identification before accepting a reservation.[85] Guests can chat with hosts through a secure messaging system.[83] Hosts provide prices and other details for their rental or event listings, such as the allowed number of guests, home type, rules, and amenities.[82][83] Hosts and guests have the ability to leave reviews about the experience.[82]

In addition to lodging, Airbnb provides the following services:

  • Experiences. Guests may book activities with local guides, including cooking classes, guided tours, and meetups.[86]
  • Airbnb Plus. Hosts that provide a verified level of conditions including a clean refrigerator, full cooking equipment, stocked toiletries,[87] fast Wi-Fi, and strong water pressure.[88] Airbnb Plus listings are marked with a badge to differentiate from standard listings.[87]
  • Airbnb Collections: Options include Airbnb for Families, Airbnb for Work, as well as homes for weddings, dinner parties, and other gatherings.[84]

Terms of use and guest review system

Linguist Mark Liberman has 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".[89] Its 69 pages have been summarized by a lawyer.[90]

Airbnb features a review system in which guests and hosts can rate each other after a stay. Hosts and guests are unable to see reviews until both have submitted a review or until the window 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. Besides, 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.[91][92][93][94]

In August 2017, Airbnb cancelled numerous bookings and closed accounts belonging to attendees of the white nationalist 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."[95] The move was criticized by Jason Kessler, organizer of the rally.[96]

Cancellations

Airbnb allows hosts to choose among three ways of cancellation policies, made to protect both hosts and guests. Options are: Flexible, Moderate, and Strict.[97]

During the COVID-19 pandemic, Airbnb updated its cancellation policy to allow guests to cancel their reservations for a full refund worldwide. According to the statement, "This policy applies to existing reservations for stays and Airbnb Experiences made on or before March 14, 2020, with check-in dates between March 14, 2020, and July 31, 2020."[98] The decision was negatively accepted by hosts who charge for cancelation. However, on March 30, Airbnb announced that they set aside US$250 million to help them regain some of the lost income, "When a guest cancels a reservation due to a COVID-19 related circumstance, with check-in between March 14 and May 31, we will pay you 25% of what you would normally receive through your cancellation policy."[99]

Flexible

A guest can request a full refund within 24 hours before the check-in time. If so, a guest will be refunded with a full amount of the accommodation fees.

Moderate

This type of cancellation policy is stricter yet lets guests get a refund. A guest can apply a cancellation for 5 days before check-in to be fully refunded the accommodation fees. The cancellation must be initiated by the guest.

Strict

Using Strict cancellation policy, a guest can get a 50% refund if the cancellation is made at least 7 days before the check-in time and charge $100 penalty from the Host as well, it will deduct from the hosts' future payments [100]

Deposits

Airbnb does not charge for the deposit immediately after the reservation has been created. To charge the guest the host claims on the deposit. Also, there is a 14-day period after guest check-out for a host to make a claim on the security deposit in cases of damaging the property by guests.[101]

If the host makes a claim, the security deposit is not collected immediately. The host has to collect pieces of evidence of the damage has occurred and to reach Airbnb's Resolution Center providing them. The host has to upload both receipts for repairs and photos.[102]

Since January 2018, Airbnb lets guests book with a deposit instead of requiring to pay the full amount in advance.[103]

Regulations

Europe

Several European cities such as Barcelona, Amsterdam,[104] Paris, and Venice have enhanced regulations for short-term rentals such as Airbnb to address the increase in the cost of living for locals, as well as the disturbances caused by tourism.[105][106][107][108]

In Ireland, laws were introduced to require a change in planning permission for short-term lets, restricting landlords to renting a short-term let for a maximum of 90 days per year for primary residences and requiring registration by landlords with local authorities. Despite this, only a minority of landlords offering properties on Airbnb actually registered by end 2019, prompting calls for stricter enforcement.[109]

United States

In the United States, Washington, D.C.,[110] Los Angeles,[111] Santa Monica, San Francisco, Charleston, and New York have imposed restrictions. Jersey City, New Jersey has the most listings in the state and the number one destination for Airbnb[112][113] and is also considered part of the New York City Airbnb market. A November 2019 referendum (originally supported by Airbnb)[114][115] approved regulations for short-term rentals which are considered the most stringent in United States.,[116][117] allowing for only 60 rental days per year.[118]

Japan

In 2018, Japan created new regulations regarding home-sharing, which includes hosts registering and limiting the numbers of days a home can be rented to 180.[119]

Controversies

Fair housing implications and discrimination

In July 2016, former Attorney General Eric Holder was hired to help craft an anti-discrimination policy for Airbnb after the company faced many complaints related to racism, including a study by Harvard Business School that showed widespread discrimination by hosts against guests whose names suggested that they were black.[120] Airbnb has also faced complaints of racial discrimination in China.[121]

Housing affordability
See also: Inside Airbnb

Airbnb has been criticized for allegedly resulting in increased housing prices. Since the company's globalization, many governments have passed various regulations limiting operations of short-term housing rental companies, such as Airbnb.

In San Francisco, the issue led to protests in November 2015.[122][123][124][125][126][127]

Several studies found that rental prices in many areas increased due to Airbnb, as landlords kept properties off the longer-term rental market and instead get higher rental rates for short-term housing via Airbnb.[128] Landlords have been accused of illegally evicting tenants in order to convert properties into Airbnb listings.[129]

A study published in 2017 found that increasing Airbnb listings in a given neighborhood by 10% leads to a 0.42% increase in rents and a 0.76% increase in house prices.[130]

A study found that on Manhattan's Lower East Side, full-time listings earned hosts an average of two to three times the median average rent.[131]

A study by the University of Massachusetts Boston Department of Economics found that with every 12 Airbnb listings per census tract, asking rents increased by 0.4%.[132]

Similar concerns have been raised in other parts of the world such as Scotland, where, in 2017, an increase in Airbnb listings alarmed the local community.[133] Airbnb has carried out extensive lobbying of Scottish politicians to oppose a law which would restrict short-term lettings.[134]

Negative guest experiences

In 2017, travel blogger Asher Fergusson analyzed 1,021 incidents of negative experiences reported by guests. He found that there are ways for hosts to use fake information to circumvent Airbnb's background checks. He noted several reported incidents including last-minute cancellations, moldy or rodent-infested lodging, theft, invasion of privacy, and even rape and murder. Airbnb responded that the 1,021 incidents are statistically insignificant compared to 260 million check-ins at the time and that the company tries to remedy any problems.[135][136][137][138][139]

Bait-and-switch scams

A Vice News journalist reported in October 2019 on a bait-and-switch scam in which a network of fake accounts advertised stays at dozens of properties across eight US cities that once booked was said to be unavailable at the last minute. Substandard alternatives were offered in their place, including to the journalist, refunds were refused, fake positive reviews were left for the fake properties, and negative retaliatory reviews were left for customers who complained. Airbnb closed some of the accounts and the FBI began an investigation in response to the report.[140] A Wired journalist reported a similar scam in London in February 2020 run by a German man, Christian Baumann, and his company Continental Apartments. Airbnb closed the accounts, but Wandsworth Borough Council planning office took no action.[141]

Delisting of West Bank settlements

In 2018, Airbnb announced that it will 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".[142][143] Listings in Israeli settlements in East Jerusalem or the Golan Heights were not affected.[142] The move was praised by the Boycott, Divestment and Sanctions movement, Palestinians,[144][145] Human Rights Watch,[146][147][148] and Amnesty International.[149] The move was criticized by the Israeli Tourism Minister[150] and the Simon Wiesenthal Center,[151] which decried the move as antisemitism.[152][153] A class action suit in the Jerusalem district court alleging discrimination based on place of residence was filed against Airbnb by affected property owners.[154][155] In April 2019 the company has announced that it "will not move forward with implementing the removal of listings in the West Bank from the platform" and that "Any profits generated for Airbnb … will be donated to non-profit organizations dedicated to humanitarian aid that serve people in different parts of the world".[156][157]

Lawsuits

In New York State it is illegal to rent out an apartment for less than thirty days unless the registered tenant is at home.[158] In 2018, New York City passed legislation requiring Airbnb and other short-term rentals/home-sharing services to submit monthly reports to the city.[159] Airbnb contested the law and in January it was blocked from taking effect pending further litigation.[160] In May 2019, Airbnb agreed to turn over some anonymized information for approximately 17,000 listings so that the city could pursue illegal rentals.[161]

Similar cases have been settled in Boston and Miami.[162]

Philanthropy

In November 2012, Airbnb partnered with New York City Mayor Michael Bloomberg to offer free housing for people displaced by Hurricane Sandy.[163] Airbnb built a microsite, where victims registered for housing and property owners offered free housing. Service fees were waived, while the host guarantee was maintained.[164][165]

In 2013, Airbnb launched its Global Citizenship Champion program in cities where its offices are located.[166]

In January 2017, the company offered free housing to refugees and any others not allowed into the United States as a result of Donald Trump’s Executive Order 13769, which temporarily banned refugees from the United States.[167][168]

In June 2017, Airbnb launched Open Homes, to connect hosts offering free or low-cost housing to uprooted people, such as refugees and those fleeing natural disasters.[169]

In 2018, Airbnb employees provided "11,000 hours of service to 250 projects worldwide", according to the company, as a result of its policy to provide employees with paid time off to be used for volunteering.[170]

COVID-19 response

In a letter to employees, CEO Brian Chesky said the company was letting 1,900 of its 7,500 workers go due to the COVID-19 pandemic and cutting businesses that don't directly support home-sharing. Those include its investments in hotels, air transportation, and movie production.[171]

Other ventures

Airbnb runs Rausch Street Films. Its first release which it produced and financed, Gay Chorus Deep South, premiered in film festivals and through its distributor MTV Documentary Films, had a United States limited theatrical run in 2019 and airing on MTV's flagship US network that same year.[172][173][174]

Sponsorships

Airbnb has been the official sponsor of Australia's national basketball team at the 2014 FIBA World Cup.[175]

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gollark: Also², ignoring all the storage hassles they are, IIRC, the cheapest power supply around per watt.
gollark: Also, I think the time to degrade is a few decades, which is perfectly usable.
gollark: Obsoleted by what?
gollark: That's not how free things work.

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