What does Airbnb do?
Airbnb operates online marketplaces for:
- Home rentals, including rooms and entire homes.
- Experiences, including workshops, classes, and outdoor activities.
- Services, including catering, hair styling, and spa treatments.
Airbnb is the listing and booking platform, but it doesn't offer any of these itself. It's the intermediary between hosts who provide accommodations, experiences, or services, and guests/customers. Its asset-light business model has allowed Airbnb to expand into new markets quickly without needing to own or maintain real estate.
How does Airbnb make money?
Most of Airbnb's revenue comes from the service fees it charges on bookings. There are a few different fee structures that determine the amount charged.
Revenue
For home stays, Airbnb offers a split fee or a single fee. Hosts decide which type of fee to use with their listings, except for traditional property listings (most hotel listings and serviced apartments), as those require a single fee. Here's how each type of fee works:
- Split fee: Hosts and guests pay their own service fees. The host typically pays a 3% fee that's deducted from the rental price. The guest pays a 14.1% to 16.5% fee on top of the rental price. For example, if the rental price is $100, the host makes $97, and the guest pays about $115. Airbnb makes $18 in fees.
- Single fee: Hosts pay a service fee that's deducted from the rental price. Guests don't pay a service fee, so the price they see is the price they pay. The fee amount is normally 14% to 16%.
The fee structure for experiences and services is more straightforward. Airbnb typically charges a 20% fee for experiences and a 15% fee (with a $6 minimum) for services.
In addition, Airbnb offers an optional travel insurance and assistance program for guests, charging a percentage of the rental cost for this protection. It also charges a service fee for cross-currency bookings if the guest pays in a different currency than the host's listing currency.
Those are smaller revenue streams, though. Paid guest travel insurance was available in 12 of Airbnb's largest countries at the end of 2024, but the platform operates in over 220 countries and territories. Cross-currency transactions only make up about 20% of Airbnb's gross booking value (GBV), so the company doesn't charge currency fees on the majority of its bookings. Booking fees are the main part of how Airbnb makes money and are most relevant to those looking to invest money in the company.
Airbnb's financials
Airbnb's revenue was $11.6 billion for the trailing 12 months (TTM) of the period ending June 30, 2025. Its net income was $2.6 billion, and its diluted earnings per share (EPS) was $4.12.
Since Airbnb went public in 2020, its revenue has steadily increased. Its net income, for the most part, has followed suit. Here's a breakdown of its annual numbers from 2020 through 2024:
Year | Revenue | Net income |
|---|---|---|
2020 | $3.4 billion | ($4.6 billion) |
2021 | $6.0 billion | ($352 million) |
2022 | $8.4 billion | $1.9 billion |
2023 | $9.9 billion | $4.8 billion |
2024 | $11.1 billion | $2.6 billion |
It's worth noting that in the third quarter of 2023, Airbnb had a one-time tax benefit of $2.8 billion, heavily elevating its net income for that year. Without the tax benefit, net income in 2023 would've been about $2.0 billion. Airbnb's consistent financial growth is a positive sign that's nice to see when investing in stocks.
Recent developments
Airbnb rolled out several big changes before the summer of 2025. It launched Airbnb Services, which are in-home services provided by hosts and bookable by anyone, whether they're staying in an Airbnb or are at their own home. Since the platform's early days, one of the disadvantages of Airbnb rentals compared to hotels has been the lack of extra amenities, such as room service. The services marketplace is designed to make Airbnb more competitive with hospitality companies in that area.
The company relaunched Airbnb Experiences, aiming to offer high-quality experiences from locals who know their cities best. It also introduced Airbnb Originals, which are exclusive experiences hosted by notable figures.
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