Airbnb (Nasdaq: ABNB) was launched in 2008 and has significantly transformed the travel destination experience with local accommodations. Founded by three friends in San Francisco, the company began by renting out an air mattress in their apartment to help cover rent. Today, it operates as a global platform connecting millions of hosts and travelers, offering a range of accommodations from budget-friendly rooms to luxurious villas. Airbnb specializes in residential experiences, which differ from those offered by traditional hotels.
Airbnb functions as a marketplace where hosts list their properties—whether a spare bedroom or an entire house—and guests book them for short-term stays. The platform manages the transaction, booking and payment, and earns a percentage from both parties. For hosts, this provides an opportunity for additional income; for travelers, it offers an alternative to standardized hotel rooms. As of March 2025, Airbnb features over 7 million listings worldwide, spanning more than 100,000 cities in 220 countries, with one billion guests having used the service.
Airbnb’s appeal is due to its convenience and variety. Customers can filter for specific amenities such as pet-friendly accommodations, Wi-Fi, kitchens, and hot tubs at beachfront bungalows. Many hosts provide additional services like local tips or homemade snacks, enhancing the travel experience.
In 2016, Airbnb expanded its offerings by introducing “Experiences,” enabling locals to host activities such as cooking classes, guided hikes, or art workshops. The company also launched Guest Favorites, a feature that simplifies the listing and renting process. The shift toward remote work has increased the demand for longer stays, with nearly 20% of bookings in 2025 being for durations of 28 days or more.
That being said, the company has experienced headwinds due to local government (cities, towns) implementing stricter regulations limiting short-term rentals (STRs) due to housing costs and overtourism, and FX challenges.
Financially, Airbnb’s annual revenue reached $11 billion with a 36% adjusted EBITDA margin, marking a 4,000 basis point improvement since 2020. After going public in December 2020, its valuation surpassed $100 billion. Revenue is generated from service fees—typically 3-5% from hosts and up to 14% from guests—in addition to the booking cost. In 2024, the company invested in various tech upgrades, including AI-driven search tools to better match guests with tailored stays.
Airbnb has meaningfully influenced the travel industry through its unique accommodation offerings, and represents an interesting case study on the power and efficacy of unique online marketplaces.
