Airbnb has become a household name for travel accommodations.© Pixavril/stock.adobe.comAirbnb, Inc. is an American company that operates a service for booking short-term stays in private homes, apartments, and other properties online. Founded in 2008 in San Francisco, it has grown into one of the world’s largest travel businesses, with more than 8 million listings in over 220 regions and countries. As of 2024, Airbnb held about 44% of the global short-term rental market, making it the largest business of its kind.

　　Origins and foundersAirbnb traces its beginnings to 2007, when Brian Chesky and Joe Gebbia, recent graduates of the Rhode Island School of Design, rented out air mattresses in their San Francisco apartment during a design conference. They soon brought in Nathan Blecharczyk, Gebbia’s former roommate, as a third cofounder. In 2008, the trio launched a website called AirBed & Breakfast, later shortened to Airbnb, which allowed people to rent out spare rooms, apartments, or houses to visitors. The idea caught on quickly, especially in cities where hotel rooms were scarce or expensive, and the company attracted early backing from Y Combinator, a start-up accelerator that provides seed funding.

　　How Airbnb worksThrough its app and website, Airbnb connects travelers seeking short-term lodging with people renting out homes, apartments, or rooms. The company earns revenue by charging a fee on each reservation. For most stays, the person listing the property pays about 3% of the booking price. Fees are higher for other categories: 20% for Airbnb Experiences, which include activities such as cooking classes, guided tours, or other local events; and around 15% for Airbnb Services, which began rolling out in 2025 and features amenities such as private chefs or spa treatments.

　　Airbnb cooking class where participants learn to make noodles and broth with a ramen chef in Setagaya City, Japan.© AirbnbThe company designates some property owners as “superhosts.” To qualify, they must maintain strong guest ratings, respond promptly to inquiries, and avoid frequent cancellations. In addition, Airbnb has programs that allow renters to sublet with landlord approval and services that match property owners with comanagers who handle bookings and guest communication.

　　Growth and milestonesAirbnb expanded rapidly in the years after its launch. By 2011, the company was valued at more than $1 billion. In December 2020, Airbnb went public in one of the largest initial public offerings (IPOs) of the year. Shares were priced at $68 each and doubled on their first day of trading, giving the company a market value of more than $100 billion. Airbnb’s direction has been closely shaped by Chesky, who has been the company’s chief executive officer and most visible leader since its founding.

　　Airbnb during the COVID-19 pandemicIn 2020, the COVID-19 pandemic halted global travel, causing Airbnb’s bookings to tumble more than 70% from the previous year. The company laid off about a quarter of its workforce and shifted its focus to local trips and online events, such as virtual cooking classes and concerts, that customers could join from home.

　　Legal battles and criticismHousing and neighborhood pressuresAirbnb has faced opposition from city governments, housing advocates, and hotel unions. Officials in cities such as New York, San Francisco, and Los Angeles have argued that short-term rentals reduce the supply of housing for residents and contribute to rising rents. Airbnb listings were responsible for nearly 10% of the overall rise in rents in New York City from 2009 to 2016, according to the city’s comptroller.

　　In response, many municipalities have adopted rules limiting short-term rentals. These include requiring that property owners live on-site while guests are present, capping the number of nights a property can be rented, or restricting the number of units a single person can list. Hotel unions have also lobbied for tighter controls, and in some cases, Airbnb has challenged local laws in court.

　　Residents in many cities have also argued that frequent turnover of short-term renters disrupts neighborhood life. European cities, including Barcelona, Paris, and Amsterdam, have introduced stricter licensing and enforcement to limit the number of listings and keep more housing available for residents.

　　Safety and discriminationThe company has also faced criticism related to safety and fairness. Incidents involving property damage, parties that disrupted neighborhoods, and hidden cameras in rentals have raised concerns about whether Airbnb adequately screens users. The company has been accused of enabling discrimination after studies and lawsuits showed that Black guests were more likely to have their bookings declined. Airbnb has pledged to reduce bias by making profile photos optional and by enforcing antidiscrimination rules.

　　Financial performanceEarly losses and IPOAirbnb reported steep losses in the years leading up to its public offering in 2020. The company was still unprofitable at the time of its IPO, and the pandemic deepened its challenges by reducing bookings by more than two-thirds.

　　First profit in 2022After cutting costs and streamlining operations, Airbnb posted its first full-year profit in 2022. The rebound in travel, along with a rise in longer stays linked to remote work, boosted results.

　　Volatility and competitionAs of 2025, Airbnb remained profitable, although its results were uneven. Higher interest rates and slowing global growth weighed on demand, and the company faced strong competition from hotel chains and rival booking services such as Booking.com (BKNG) and Expedia Group’s (EXPE) Vrbo.

　　Legacy and impactAirbnb helped make it common for travelers to stay in private residences rather than hotels, a practice that was unusual before its launch in 2008. The company has been frequently cited as one of the most visible examples of the “sharing economy,” alongside ride-sharing businesses Uber (UBER) and Lyft (LYFT).

　　Airbnb has provided millions with a way to earn money by renting out space in their homes. At the same time, it has fueled debates about housing affordability, neighborhood stability, and the responsibilities of companies that rely on independent participants rather than traditional employees. As the company has grown, it has presented itself as having a foot in both the hospitality and technology sectors, promoting new tools such as an app that uses artificial intelligence to assist with booking and customer service.  By reshaping expectations around lodging, Airbnb left a lasting mark on both the travel industry and local housing markets.

　　Frannie Comstock