Airbnb is an on-line, homestay network that provides short-term lodging. It is a very successful start-up that makes money by charging its users. Guest fees range from 6-12% depending on the size of the reservation subtotal. The higher the subtotal, the smaller the reservation fee percentage – which is non-refundable. Airbnb also charges hosts a 3% host service fee which is applied to the subtotal.

What sources of cost advantage apply to Airbnb’s business model?

What sources of differentiation apply to Airbnb’s business model?