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Diving Into Airbnb History: From an Air Mattress to a Household Name
Dipping into the Airbnb story, we find a great example of how a pain point can be turned into a profitable business model. Keep reading to learn the key moves and milestones of the biggest lodging website.
The Birth of an Idea
Airbnb, an acronym for “Air Bed and Breakfast”, has an origin story as legendary as the lasting impact it's left on the short-term rental and hotel industry. Founded in San Francisco in 2007 by Brian Chesky and Joe Gebbia, the company’s origin story is as unique as its name.
The idea came about when the duo were struggling to pay their rent and decided to put their loft’s empty space to use by turning it into a lodging space for people attending a design conference in San Francisco. They offered guests air mattresses to sleep on and a homemade breakfast in the morning, thus creating the concept of “air bed and breakfast”.
Founding Team and Early Growth
The idea took off quickly, and in 2008, Gebbia and Chesky brought in their third co-founder, Nathan Blecharczyk (who would later become chief technology officer). This was a big moment in Airbnb history.
The Democratic National Convention was another big event in 2008 that had a big impact on the Airbnb story. The co-founders saw an opportunity to launch Airbnb to a wider audience by offering an alternative lodging solution for attendees who couldn’t find hotel rooms.
Their website and custom payments platform, Payments, launched in August 2008, just in time for the convention. It got 80 bookings, up from 2 bookings at SXSW in March.
Part of their early growth also included moving away from just home sharing to include entire homes, apartments, and short-term rentals. This shift from air mattresses in a shared living space to luxury vacation rentals also meant they probably had to change their name, and in March 2009, they changed the name to Airbnb. About 18 months later, they got their own app with Instant Book.
Global Expansion and Acquisitions
Considering their very humble beginnings, Airbnb expanded fast.
In 2011, Airbnb acquired Accoleo, a German startup that focused on student housing, leading to the opening of the first international Airbnb office in Germany. This was the start of several strategic acquisitions.
Two years later, they opened their headquarters on Brannan Street, San Francisco. While this was a big milestone in only five years, the fact that their new headquarters were just a few blocks away from the apartment where they hosted their first Airbnb guests shows they didn’t stray too far from the company’s roots.
In 2012, Airbnb acquired NabeWise, a city guide that helps people find neighborhoods while traveling, and Crashpadder. The NabeWise acquisition led to the launch of Airbnb Neighborhoods, a feature that allows guests to not only book accommodations but also understand the character of the neighborhoods they would be staying in.
Then, over the next decade, there were many other acquisitions. 2019 was a big year in which they acquired Urbandoor and HotelTonight, a travel agency and search engine that lists some of the biggest hotel chains, signaling their interest in the hotel industry, corporate clients, and long stays.
Revamping and Diversifying Offerings
In July 2014, Airbnb revealed design revisions to the website and mobile app and also introduced a new logo. These changes were aimed at making their service easier to use and more beautiful, so Airbnb started to position themselves as a vacation rental platform that didn’t just offer a place to sleep but an entire experience.
This included the introduction of their one million dollars Host Guarantee, Airbnb Plus, and Airbnb Experiences (including Online Experiences). For example, the company announced Airbnb Plus in 2018, a segment of the platform for luxury vacation rentals, and diversified their portfolio. They also put the company in direct competition with more traditional high-end hospitality businesses and the hotel industry.
Plus, Airbnb acquired Urbandoor in 2019, meaning they could also enter the corporate housing market. This allowed them to serve corporate clients looking for short-term rentals, further diversifying their client base.
Airbnb and Its Impact
While Airbnb is a controversial player, facing criticism and regulatory scrutiny from cities around the world and established hotel industry players, they’re also an innovator. The company had a big impact on the short-term rental industry, changing how people travel and book accommodations. By 2020, Airbnb was a global powerhouse in the vacation rental industry, backed by private equity firms and individuals around the world.
For example, in November 2019, four years after they became the official alternative accommodations provider for the 2016 Rio Games, they announced a nine-year partnership with the International Olympic Committee.
They also give back to the community that has helped them become a global online marketplace. In fact, this has been part of their DNA before they became the company they are today.
For instance, in November 2012, they partnered with New York City to house residents who were displaced by Hurricane Sandy. This was also the start of their Disaster Relief Tool that provides free emergency housing to families in need around the world.
Their Frontline Stays program is another example of how they use their platform for good. Airbnb launched this initiative that offered housing to medical workers and first responders in response to the COVID-19 pandemic in March 2020.
2020 was a tough year for the company, but they still ended the year on a high note. Not only did they launch Airbnb.org, a non-profit that connects people in times of crisis to accommodation, but they also went public.
This major milestone is a result of changing how people find lodging and a big shift in the hospitality industry. Today, Airbnb is a symbol of successful innovation and disruption; their story is intertwined with the growth and evolution of the sharing economy.
Takeaway
Airbnb established themselves as a major player and a close second for the world's largest lodging website. The story of their beginnings, growth, acquisitions, and innovations is a lesson in how an idea born in San Francisco out of necessity can become a multi-billion-dollar global company.
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