Airbnb provides booking of temporary rental-based properties with a certain commission for the platform usage. Here, both consumers and property guardians interact with each other

Clarifying questions

–          Airbnb runs on certain commission model, does the revenue include only Airbnb share or the overall money transaction happening via Airbnb à Let’s consider only the Airbnb cut as the revenue

–          I believe 15% is fair commission that Airbnb might be charging to bring business for the property guardian. Does it make sense à Fine, we can go with this assumption

Revenue of Airbnb = People making booking via Airbnb X Avg. night booking X Avg value of those booking X 15%

1. People making booking via Airbnb – Indian + Foreign national
2. Mostly from Tier 1 and Tier 2 cities à 15 % of total 1.4 bn population

Potential pool size à 210 million

Airbnb mostly caters to unique homestays and limited hotels say it has 5% penetration in Indian market  ~ 10 mn

Let’s say 2 booking every year and 2 avg nights à 40 mn nights for Indian

2. Foreign national à In my personal experience 1/15 to 20 is foreign

Foreign people à 2 mn nights

1. Avg price per night for Indian
2. Airbnb prices range from 2K to 15K in broader sense

Let’s take the distribution (2-5K) à 20% à 3.5K avg = 3.5X8 = 28 million thousand

(5 -10) à 70% à 7.5K avg = 28X 7.5 = 146 million thousand

(10-20)  à 10% à 15K avg = 4X15 = 60 million thousand

230 million thousand x 15% = 35 million thousand = 35 bn INR

1. Avg price per night for Foreign national (5-20K)
2. (5-10) – 7.5 à 30%  = 4.5 bn
3. (10-15) – 12.5 à 40% = 10 bn
4. (15-20) – 17.5 à 30% = 10.5 bn

Total = 25X 15% = 3.75 bn

Total revenue in India for Airbnb = 35+ 3.75 = 38.75 bn INR