Airbnb-Like App Business Model: How Rental Platforms Make Money?

What Is an Airbnb-Like App Business Model?

Let’s understand the Airbnb-like app business model. Airbnb app creation is a marketplace model that facilitates the rental property rentals, and it serves both: it helps users who are looking forward to rent out an apartment, house, or room in a property, as well as:

Hosts or property owners

Guests and temporary residents

For the marketplace itself, it acts as an intermediary between two types of users and generates income either through transaction fees or by conducting extra operations. 7 key participants in a rental marketplace:

Guests, or hotel guests

Short-term rental property owners – or hosts who rent in the short-term (e.g., by the night)

Marketplace owner, or platform operator.

applications for both Android and iOS devices, making it possible for people to book their accommodations anywhere, anytime

How Do Airbnb-Like Apps Make Money?

A vacation rental marketplace can monetize using a handful of revenue streams rather than just a single method. The specific combination depends on the target industry, feature tiers, property types, and the overall business model.

Booking Commission 

This is often the most popular and best monetization models for rental marketplaces. 

The platform can take a fixed commission from the overall booking amount when a user books a property successfully. 

The commission can be taken from either the host, the guest, or both. For example, a user books a property for $500 and the rental marketplace takes a 10% commission, this means the platform earns $50. 

The commission percentage can be based on location, property types, the booking amount, and marketplace policies.

Guest Service Fees

A guest can be charged additional booking fees on top of the property booking amount. 

This is to compensate the platform for processing payments, providing customer support, and managing the marketplace. Guest service fees can be as a percentage of the total booking amount or according to configuration rules.

Host Service Fees 

Similarly, the rental marketplace can monetize by charging property owners for using the platform. 

This grants the host access to a large base of travelers, end-to-end booking management tools, payment processing, messaging platform, and other features. 

Instead of taking large one-time fees, companies can take commissions that increase with a host gaining more bookings.

Featured & Promoted Listings

Hosts want their listings to get ranked higher for potential visitors. 

A rental marketplace can offer sponsored placements on search result pages or prioritized booking options so that hosts can pay for more visibility. 

For example, a host can pay to promote a listing during a travel peak, or in a specific destination region.

Premium Host Subscriptions 

Subcription-based revenue streams can be another monetization option for rental marketplaces. 

By offering a few different plans based on the host’s requirements, recurring revenue can be generated along with providing the owners with more features. 

For example, a basic plan can include essentials like a property owner and listing management, whereas premium plans can include additional tools such as:

• Access to potential booking data
• Listing management tools
• Multi-user property access
• Performance analytics
• Automated messaging
• Priority support
• Notification of bookings

Cancellation & Modification Fees 

Properties can also make revenue based on well defined policies regarding cancellations and modifications. 

For example, a property owner can define different cancellation charges based on how far away a guest is from check-in, which can then be dynamically calculated by the platform.

Additional Services 

Your online rental marketplace doesn’t need to be limited to bookings and accommodations. 

Based on your target market, additional offerings can include:

• Concierge services
• Personal vehicle rentals
• Equipment rentals
• Airport transfers
• Local guides & experiences
• Travel insurance
• Property management

Airbnb-like applications can take commission or fees from bookings or transactions in relation to these offerings as well.

How Does the Rental Marketplace Work?

The flow of a clone of Airbnb will go like this: 

1. Hosts sign up on the Platform And Upload the Details of the property (hosts upload details about the property along with images) 
2. Hosts List the Property (hosts create property profiles and mention amenities, house rules, policies, availability, prices, etc.) 
3. Guests Search for a Place to Stay (enter location, check-in, and check-out dates, the number of guests, amenities, etc.) 
4. Guests Choose a Property (compare properties on price, ratings, location, amenities, reviews, etc.) 
5. Book the Property and Make a Payment (book the property and make payment on the platform) 
6. Host Accepts the Booking (hosts approve the booking) 
7. Host and Guest Stay and Review (host and guest leave reviews and ratings). 

This summarizes the marketplace flywheel: more properties, more guests, more guests, more properties.