Peer-to-peer housing rental site Airbnb was on fire last year. As we previously reported, nights booked were up approximately 500 per cent. In addition, we estimated in a recent note that its revenues grew to $52.8 million, up from $8.4 million a year prior.
The numbers are impressive, but it also sheds light on why the collaborative consumption business model is so attractive. Airbnb has no inventory and virtually no fixed costs, it operates a marketplace and picks off fees on every transaction. In other words, Airbnb should, in the long run, be wildly profitable.
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