The vacation rental trend has gone global. Every year, millions of people leave their homes for travel, business, or to attend conferences, and they each need a temporary accomodation. You can find a hotel or hostel without any problem, but hotels can get expensive, and staying in a hostel can be uncomfortable. In 2008, Brian Chesky and Joe Gebbia created Airbnb, a startup that lets people rent private houses and apartments.
Airbnb is the most successful rental marketplace, but it’s not the only player in this segment. VRBO, HomeAway, Wimdu, Travelmob, and 9Flats are the most successful alternatives to Airbnb. And quite a number of entrepreneurs consider developing their own Airbnb clone. Since you’re reading this article, you may be one of them. We’ll show you possible options for creating your own Airbnb-like service, but will concentrate on how to build this platform from scratch. Let’s start with short overview of how Airbnb works.
Brian Chesky and his partner Joe Gebbia came up with the idea for Airbnb when they couldn’t afford to pay their rent. They decided to transform their living room into a bed and breakfast – with a nice homemade breakfast – for three guests. They raised some money this way, and then started looking for investors to fund their startup.
Today, Airbnb describes itself as a peer-to-peer marketplace, but to put it simply, Airbnb is just an accommodation-letting service. It provides the same basic functionality as any booking site, but with one major difference. While most booking sites aggregate offers for hotel and motel rooms, Airbnb connects people who are looking for accommodations with people who want to earn some money by letting their own private living spaces. Airbnb has two types of users: travelers (or ‘guests’) and hosts. Oh, and of course admins who ensure that all the interactions between guests and hosts go smoothly.
Airbnb charges both guests and hosts for every booking. For every successful booking, hosts are charged 3% to cover the cost of processing the transaction; guests are charged from 6-12%. The percentage depends on the value of the property.
For your own Airbnb-like site, you may also charge other fees. For example, if you work with hosts or guests from the European Union, Switzerland, or Norway, you may need to implement a value-added tax (VAT).
To develop the website you see now, Airbnb spent seven years and millions of dollars. Their current website has over 1.5 million listings in 34,000 cities across 190 countries. This scale is possible because Airbnb has developed great many features, a complex technology stack, and many proprietary tools. You may also reach this level, but it will certainly take time.
How can you create a website like Airbnb?
You can create your own Airbnb:
- Using a marketplace SaaS solution, such as those offered by Sharetribe, Near Me, and Marketplacer;
- Using an open-source marketplace platform (for instance, the open-source version of Sharetribe);
- Developing a marketplace from scratch.
If you want to learn more about what each of these options means – and what advantages they can offer you – go ahead and read our article about how to build a peer-to-peer marketplace.
As promised, in this article we’ll focus on the last option we just mentioned: developing a marketplace like Airbnb from scratch.
In 2008, Airbnb started developing their product from scratch. Airbnb was just a plain MVP that offered little of the functionality it currently provides. To begin, Airbnb just focused on their main goal – providing rental services – and succeed at that. Let’s take a look at what Airbnb looked like at the very beginning.
What did Airbnb look like at the very beginning?
Airbnb was initially called “AirBed and Breakfast.” As you may guess, the original idea of Airbnb was to list not rooms, houses, villas, etc., but rather couches and airbeds. It looked almost like a paid version of the popular service CouchSurfing.
We found an interesting infographic from Funders and Founders that talks about how Airbnb went from three guys renting mattresses to a $10 billion dollar company.
Just like Airbnb did, we’d advise you to start with an MVP as well. Keep in mind that an MVP will give you the ability to validate your idea, get feedback from real users, and start learning from them quickly. The earlier you launch your first product, the better. Before we proceed with figuring out the technology stack and cost of building a peer-to-peer marketplace like Airbnb, let’s first define its core functionality.
What are the core features of Airbnb?
When you start building an MVP, you should carefully define what features are core to the product, and which are just add-ons. We did this with Airbnb to come up with the realistic numbers at the end of this article. So let’s start with an overview of the features that are an absolute must for Airbnb and its competitors. As Airbnb has two types of users – guests and hosts – we’ll take a look at the features that are needed for each type. But first let’s look at the features that are the same for both types:
- Log-in / Sign-up via email or Facebook;
- User’s settings (change email/password, notification settings);
- Personal profile information;
- Notifications system;
- User’s Dashboard.
Now, let’s consider the features that are core for guests. For Airbnb-like website, guests should be able to:
- Manage personal profile information;
- Search for properties;
- View listings;
- Send order requests, communicate about these requests (via messages), accept/decline offers, and create new requests;
- View upcoming/past bookings and reservations details;
- Leave reviews and rate hosts;
- Manage payment methods and view transactions history.
And hosts should be able to:
- Create their own pages and become hosts;
- Manage personal page information;
- Manage information about listings (basic details, photos, schedules, and prices);
- Communicate with guests about bookings through messaging, accept/decline requests, and create/send new requests to guests;
- View upcoming/past bookings and reservations details;
- Leave reviews and rate guests;
- Manage payout methods and view transactions history.
We’ve just listed all the features that are essential for the MVP version of websites like Airbnb. Now we’re ready to look at an overview of the technology stack require to implement this functionality.
What is the technology stack for building an MVP for websites like Airbnb?
As we know, selecting the right technology stack is extremely important. A technology stack not only affects your budget, but also makes a difference in terms of scalability and development time. As we previously mentioned, the current Airbnb website uses quite powerful technologies and an extensive number of tools. But keep in mind that for your MVP you may need another stack of technologies. These are some of the options we would offer for the technology stack for an MVP version of a website like Airbnb:
- Application Framework — Ruby on Rails
- Automation Frameworks — RSpec, Capybara, PhantomJS
- SQL data storage — PostgreSQL
- Key value storage — Redis
- Web server — Nginx
- Web application server — Puma
- Hosting — Amazon Web Services (AWS)
This technology stack is a good choice for an MVP as well as for further development of your product. Keep in mind that, while Airbnb uses many technologies, they’re still running on the Ruby on Rails framework. Rails can help you build your product MVP quickly and affordably, but it can also make your product secure, fast, and scalable.
If you want to know how much it would cost you to develop a website like Airbnb from scratch here at RubyGarage, just drop us a line.