Is Airbnb a SaaS Company? This question has sparked considerable curiosity as Airbnb continues to evolve and expand its business model. As a pioneer in the sharing economy, Airbnb has undoubtedly revolutionized the way people travel and find accommodation.
Airbnb is not a traditional SaaS (Software as a Service) company. It is an online marketplace that offers arrangements for lodging, primarily homestays or vacation rentals, and does not provide software as its main product. However, it has entered the B2B SaaS market in the past, broadening its scope of services. In general, Airbnb is closer to the e-commerce paradigm than a typical SaaS company.
What is a SaaS Company?
A SaaS or Software-as-a-Service company is one that provides software solutions over the internet. Rather than installing and maintaining software, SaaS companies host the software and handle all the technical aspects.
Customers can access the software from anywhere via web-based tools or mobile apps. Some well-known examples of SaaS companies are Salesforce, Dropbox, MailChimp, Slack, etc.
Key characteristics of SaaS companies include:
- Subscription model
Factors that Differentiate Airbnb from SaaS Companies or SaaS Software
While Airbnb shares some qualities with SaaS companies, there are a few key differences:
Type of service: Airbnb facilitates short-term rentals and experiences, not software solutions. So, its core service offering is quite different from that of a typical SaaS company.
Lack of software subscription: Airbnb does not provide a software subscription service. It generates revenue through service fees on transactions, not subscription fees.
Different target market: Airbnb’s target audience is those looking for travel accommodations and experiences. SaaS companies cater to business clients looking for software tools.
Similarities of Airbnb to the SaaS Business Model
Airbnb operates an online marketplace for hospitality services. It allows people to rent out their properties or spare rooms to guests looking for accommodations. Airbnb makes money through service fees from bookings. It has over 4 million places to stay in more than 65,000 cities worldwide.
While Airbnb is not a traditional SaaS company that provides software solutions, it has some similarities with SaaS companies:
Scalability: Like SaaS companies, Airbnb has a scalable model as it has grown to over 150 million users without having to build and maintain physical infrastructure. Its platform is capable of supporting far more users and bookings.
Subscription model: Airbnb’s transactions are recurring in nature as hosts pay a service fee with every booking. So, there is a subscription element, though not a traditional software subscription.
Cloud-based: Airbnb’s platform is hosted in the cloud, making it easily accessible to users worldwide.
Multi-tenant: Airbnb’s platform serves multiple hosts and guests, so it is multi-tenant. However, it facilitates physical rentals rather than access to software.
Accessibility: Users can access Airbnb’s platform and book rentals from its website or mobile apps, making it accessible. But again, the core service is physical rentals, not software.
Airbnb’s Push into the B2B SaaS Space
For years, Airbnb has been focused on serving leisure travelers and vacationers looking for short-term rentals as an alternative to hotels. With over 4 million listings in more than 191 countries, Airbnb has built a very successful marketplace for individuals and families.
However, business travelers and corporate accounts have made up a small fraction of Airbnb’s business. With the launch of Airbnb for Work, the company is looking to tap into the large and growing business travel market.
Airbnb for Work offers many of the same benefits of Airbnb’s consumer service, but with additions tailored for business travelers and the companies paying for their stays. Some of the key features include:
- Centralized booking and management dashboard for travel managers. Companies can easily book, manage and review employee Airbnb stays.
- Simplified and consolidated billing. Airbnb for Work provides one single bill for all employee bookings which includes itemized charges and receipts. This streamlines the expense reporting and reimbursement process for companies.
- Longer-term stay options. Airbnb for Work offers listings with availability for stays of 7 days or more, as many business trips require longer-term lodging.
- Amenities for work. Many Airbnb for Work listings provide amenities suitable for business travel like Wi-Fi, workspaces, and 24-hour check-in.
- Loyalty program for businesses. The Airbnb for Work program provides rewards and incentives for companies to book with Airbnb. Businesses can earn travel credits and other perks as they spend more with Airbnb.
Airbnb for Work represents an opportunity for Airbnb to significantly expand its total addressable market and open up a new revenue stream.
The corporate travel market is over $1.3 trillion, so even capturing a small portion of spending could drive substantial growth for Airbnb.
Overall, the launch of Airbnb for Work showcases Airbnb’s ambition to move beyond consumer travel and become a much larger end-to-end travel platform.
The Grey Area: Is Airbnb a SaaS Company?
There are some overlapping features between Airbnb and SaaS companies, but also some distinct differences. Opinions differ on whether Airbnb can be classified as a SaaS company. Some industry experts argue that as web-based companies increasingly diversify into new services, the definition of SaaS is evolving. They believe companies like Airbnb that have a scalable subscription-based model, leveraging cloud technology should qualify as SaaS.
However, others counter that SaaS companies, at their core, provide software solutions and tools to business clients. While Airbnb has a web-based model, its primary service is facilitating real-world hospitality services, not providing software. So, it does not quite fit into the traditional definition of a SaaS company.