Air BNB business Model You might have not heard about it, but it has just launched in India. A model similar to OYO Rooms and a bit different in other sense OYO Uses its investment whereas they don’t. This is Similar to OLX On Olx, we can sell any item and post an advertisement accordingly.
If someone wants to buy it, they can buy it, and that too for free, and they earn money through ads. But Air BNB has a different approach If you want to Post an ad, and you get a Buyer for it I’ll take a commission from you as well as from the other party.
Let’s logically think about how AIR BNB commission from us
If someone buys it Online then there will be a transaction maybe from the card, and you have to pay to the Payment Gateway, and if you know that gateway usually takes 2 Percent for it and they are taking 3%.
If Someone gets a Buyer Air BNB to take up to 20% and they take around 12% of the commission from the buyer also Which I think is Wrong If Customer wants to buy a product from you then he/she have to give 12% Commission Personally.
Explain Further about AIR BNB marketing strategy
- I don’t like it I told you in the OYO Rooms Model that they take the hotel and make changes accordingly and they list that Hotel on their Website and customer take the Service from their website and Apply Discount coupons, other offers.
- but what happens is Air BNB is Suppose you have a Vacate Room, and you aren’t getting anything from it You can List Yourself on their Website now.
- Customers will see Your Hotel Listing just like what happens on Olx you will see a Listing If someone wants to come to your location and can’t Afford the expensive Hotel He will come to your location and accommodate at relatively less price And This in whole creates a demand.
- This will affect the Hotel’s footfall as their room is much expensive compared to the OYO rooms and they will take rooms from OYO and take a vacate room for even a day and it will offer multiple services to them like Tea, A Shared Air Conditioner, wifi and can use the other available facilities I have to Pay more price to the hotels than what I am paying
Pros & Cons
- Let us Think About the Pros and the Cons First of all Air BNB is creating opportunities for the Room owners as they can earn by listing to the OYO and the Customer is also getting an opportunity to take a less expensive room from OYO at Lesser Price.
- They also have an Experience and the Review Section Just like what we can see on Amazon and other E-commerce sites
But if we talk about OLX, They don’t offer anything like that and In OYO rooms, you can read the reviews.
- But what if I stayed in someone’s room and they try to Kidnap me and beat me, then?
Or any mishap happened If a Girl stayed in the room and Boy tried to do something Wrong, Something bad could happen so for that, they have an Insurance Facilities too to insure you up to 1 Million Dollar Nearly 6.5 Cr. INR When you accommodate in a room through them and something bad happens like a Kidnap or a Murder or something like that You don’t have to worry about anything, Your parents will get 6.5 Cr. INR.
- Let’s try to understand another thing that our homes come in the residential sector, not in the Corporate sector.
- So legally I can’t open any shop or business in my home that what we can usually see in Delhi but legally I can’t do it.
- I converted my Room into a hotel I am paying house tax only, not the commercial tax and if I registered myself government can take some action against us like a sue or a case.
Europe has seen a lot of cases like this and people have suffered several cases In India, it is new so we have to wait to see long term affect If you have a vacate room and wants to earn by giving accommodation to someone for a day or ten or even for a month even you can add.
- A service for Boat Sailing If you have some Skills they have an option for experience also Like a Body Massage and they have different categories for different services and skills.
- Suppose I am going to the USA for a Trip and I don’t think anything about the USA I am a Homie Guy and Habitual of living with my parents only.
But if staying in the hotel, I might get scared during a Thunder Their website also offers a room with the different native families and the family I get most comfortable with through their website, I can book the Room accordingly.
- I was reading some reviews and I really like it There were two brothers and I went to meet a cousin and he wasn’t available so I meet the younger one and I really liked it you can understand the level of Attachment people are getting through.
This was Think about it, How you felt if you read a comment and gets a similar experience.
- You will consider them as Celebrities so list yourself, and be a Celebrity and you will be on the Internet and people will going to talk about you that this person is very good and a great human and I was talking about the service.
- They will take a 20% Commission. Flat.
- If you are going for Massage service for 1000Rs.
- Their commission will be 200Rs Flat From the Service Hoster Not from the one who is taking the Service.
- But If we talk about the rooms they will take a commission from both the party The one who is taking it will give 3% and the one who is Hosting their ad will give up to 2O%.
How AIR BNB started
- When the company started they have served more than 26 Cr. Guest and Brain, Joe and Nathan three friends started this Company.
I’ll tell you later about their Journey, Idea Its a California and USA Based Company and have been through 12 Funding Rounds and have received 4.4Billion Dollar Funding so far and they have to Acquire around 17 Companies.
If we check their acquisition They have to Acquire similarly and a Related Industries like a Search-based or Review based Industry Basically they are developing their Model and what have analyzed so-far is that they do investment also.
So they are making money from that thing also buy Reinvesting their Profit There were two friends Brain and Joe who used to study together and moved to San Francisco and becomes the Roommate.
They did not have much money So they rent a room in that Area Due to some financial issues and their expenses. Air BNB thinks of renting their Another Vacate Room So they Bought only Air bed as a Furniture that we usually see in TV commercials and placed it in that Vacate room.
They Publicise that room for the one who is in seek of staying it for a day or so. They named it Air BED and Breakfast (Air BNB).
- Air BNB, That’s how the name originates what actually happened. Later they were doing it Offline, and then their Friend came into the Business on 2008 Feb.
He came into Business as the C.T.O Chief Technical Officer, He designed their Website Like what happens in friends usually, that I will make you the CTO if you do a job for me. He becomes the CTO By making their Website.
Now they were listed online and they got some increase in the reach now they planned a new strategy of providing a Breakfast also, as they had Breakfast in their name.
They made a Cereal Box and sold 800 boxes of 40 Dollars each and their strategy of selling it was very unique. As elections were happening in the USA and used Obama and McCain in their Label Their Product marketed by this very easily and they earned 30,000 Dollars and they Re Invested this money in their Business.
Current Scenario of AIR BNB
They got a listing of around 2500 and had around 10,000 Registered Users. By this they generated fund and expands the business for further. This explains how AIR BNB sets its business strategy and made it a success story for other companies.