Airbnb’s Aggressive International Expansion

Airbnb, a home sharing two-sided online platform, is shaking up the hotel industry and rapidly expanding internationally. Airbnb is one of the many new platform-based companies that have harnessed the power of online communities to drive international growth. As an online platform that pairs consumers with homeowners looking to rent their spaces, Airbnb has been able to enter foreign markets with relatively little investment, since the company does not own the properties that are listed for rent on the site. After its founding in San Francisco in 2008, Airbnb has grown exponentially, with “hosts in more than 35,000 cities and 191 countries. The amount of total guests using Airbnb has surpassed 60 million in 2015” (Mylotrade, 2016). Airbnb now has international offices in Spain, Germany, China, Ireland, England, Italy, India, France, Brazil, South Korea, Singapore, Australia, Japan, Canada, and in several strategic locations within the United States. Their famous tag line, “Don’t Go There. Live There.” has targeted the millennial generation, encouraging travelers to truly experience cities by “living there” in a local’s accommodations, as opposed to staying in an expensive cookie-cutter, standardized hotel room.

An Airbnb listing in Paris, France
An Airbnb listing in Paris, France

Airbnb has created a new way to travel and experience a foreign destination while allowing customers from different market segments to choose their price limits and preferred level of privacy. Savvy Airbnb travelers can book anything from a budget-friendly shared rooms to luxurious private homes or even medieval castles!

Airbnb’s popularity has grown enormously since its founding in 2008. Its two-sided online platform benefits both the homeowners and the renters, providing Bed and Breakfast owners the ability to reach a huge amount of potential customers while supplying unique lodging options for customers with many different specifications. Airbnb’s ability to serve both sides of their online community has attracted more and more buyers and sellers over the years. The Airbnb online platform has benefited greatly from a “network effect”, since the service Airbnb provides increases in value for customers on each of the two sides of the platform as more people join the community. This growing popularity, and the profits earned through fees charged to customers who book through the site, have enabled Airbnb to enter emerging markets and create a global presence. One such market is the newly opened country of Cuba. As discussed in Mylo Trade’s article, Airbnb “continues to expand aggressively into new foreign markets: when Cuba became more open to American businesses last December, Airbnb jumped in. Airbnb already has more than 1,000 listings in Cuba” (Mylotrade, 2016). Michael Weissenstein’s article with the Business Insider stated that Airbnb’s international expansion to Cuba was “the most significant U.S. business expansion on the island since the declaration of detente between the two countries” (Weissenstein, 2015). Airbnb’s rapid international expansion and growing global community is a testament to the power of online platforms in the modern marketplace.

Airbnb expands to Cuba
Airbnb expands to Cuba

The internet’s growing influence through social media and online communities has fueled a rapid globalization of international markets. As the popularity of platforms such as Airbnb increases, worldwide markets will continue to unify into one global competitive market, and the international expansion strategies of existing competitors will be forced to evolve.