Classroom Companion: Business

19.4 · Digital Business Models

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provide a valid name, email address, 
telephone number, photo, and payment 
information. Airbnb gets its revenue 
from a booking fee paid by both the 
guest and the host (4). Key resources 
are the website 
7
airbnb. com
 and the 
mobile app (5). These sites must be user-
friendly for both hosts and guests, have 
high availability, and offer a high-quality 
service. Key partners are people own-
ing properties for lease (the hosts) (6). 
Hence, hosts are both a key partner and 
a customer segment for Airbnb. This is 
because hosts provide the content of the 
Airbnb site (properties for rent), while 
at the same time, they contribute to 
revenues when a guest books the host’s 
property for rent. A key activity is net-
work-building to build up a large base of 
available hosts.
The business model contains positive 
indirect network effects between guests as 
seen in 
.
Fig. 
19.13
. Guests leave com-
ments that other guests may review 
before booking a property. There are also 
positive direct network effects between 
guests and hosts—having more hosts 
means there are more choices available 
for the guests and more guests implies a 
higher likelihood of bookings. There are 
negative network effects between hosts 
since hosts compete for the same guests. 
However, note that the network effects 
have local significance only: available 
properties in Bangkok do not induce pos-
itive network effects on users who are 
looking for a house in Paris.
A key strategy for Airbnb is to 
ensure a healthy supply of property in 
the areas Airbnb operates and to pro-
mote these properties to attract enough 
guests. Another important aspect is to 
ensure that guests trust the bookings 
made through Airbnb. For this purpose, 
Airbnb offers a review system for both 
hosts and guests that may be used to rise 
the quality of the services offered by 
Airbnb.
Guest
Guest