Could This Be A New Business Model For Airbnb?
If you are staying in America or Europe, it’s very much possible that on one of your vacations you would have used Airbnb to book your stay. On a personal note, I’m a big fan of Airbnb. I think it’s an amazing service and from a business point of view they have an amazing business model.
The Airbnb Effect
It just so happened that few days back, I read a post published on The Next Web about a man who bought an apartment specifically to rent out on Airbnb. The guy has posted a whole bunch of details about his overall experience, but the most interesting part was the money he is making with it. He bought this property for $40,000 and invested an additional $10,000 for furnishing it. By the rough numbers he provided, it should take a little under 4 years to completely pay off the price of the apartment, which is pretty cool!
This got me seriously thinking about the idea of investing in property specifically for renting out on Airbnb. This could be a very good way of generating income from the investment in property. The first city that came to my mind where I would like to invest was Zurich, because during my last vacation I realized that the accommodation there is absurdly costly and somehow there is a good demand throughout the year because of the tourist influx.
Airbnb: The Game Changer
I also realized that how Airbnb is a clear example of disruptive technology, which is now changing the dynamics of the real estate and hotel industries, simply amazing! Who would have thought that a private home stay booking platform would become a reason for someone to specifically buy a property for. Airbnb has my all due respect for changing the game of the real estate and hotel industries.
Thinking of real estate and Airbnb, I had a new thought in a slightly different direction. I wondered what this incident would mean in may be few months down the line from now, especially for Airbnb. Could this whole thing evolve into a new revenue stream for Airbnb?
A New Business Model?
I asked this question to myself, if there will be more people who will be willing to buy property specifically for renting out on Airbnb, then shouldn’t Airbnb do something about it? Just imagine if Airbnb becomes a marketplace for sellers of such properties in addition to what it’s currently doing. What I mean is- Airbnb will start listing the property of those sellers who want to sell their properties, but these properties will not just be sold to anyone. These properties will be specifically sold to the people who are interested in renting them out on Airbnb. Later, such properties could be promoted on a priority basis on the Airbnb since the buying transactions have taken place through the booking platform itself. May be such properties could be termed as “Airbnb Properties” or something similar. I think this could altogether be a new business model for Airbnb and this would also mean more transparent knowledge about the property and higher reliability for Airbnb.
I could not stop myself from drawing the analogy of above business model with what Netflix did when it started producing its own video content. It was a step that Netflix took, in order to secure video content by creating its own. Nevertheless, in case of Airbnb there is no pressing need, but wouldn’t it be a great idea to make more money and secure more properties that will be available for renting through it?