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Why Wimdu's Business Model is so successful?

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Wimdu’s Company Overview


Wimdu, founded in 2011 and headquartered in Berlin, was a peer-to-peer online marketplace facilitating short-term vacation rentals and accommodations. The platform aimed to connect travelers seeking unique and affordable lodging options with hosts who had spare rooms, apartments, or homes to rent. Operating in a similar vein to other online hospitality services, Wimdu allowed property owners to monetize their extra space and offered travelers an alternative to traditional hotels.

Wimdu is a marketplace for private accommodations. With over 350,000 properties in more than 150 countries, Wimdu offers a range of accommodations for any traveler. Whether a business trip to New York, or a beach holiday in Spain, users can search and book a range of accommodations from city apartments to B&B’s, from penthouses to vast country homes, from tree houses to luxury villas. With a price range to suit all pockets and a friendly customer service team, Wimdu has everything to make traveling the best experience possible.

Wimdu's business model relied on generating revenue through commissions on successful bookings. Hosts would list their properties on the platform, and when a guest booked a stay, Wimdu would charge a percentage-based fee on the transaction. Additionally, Wimdu focused on providing a range of accommodation options, from budget to luxury, to cater to a diverse audience of travelers. The platform emphasized personalized and unique travel experiences, encouraging hosts to showcase the distinct features of their properties.

Wimdu's business model capitalized on the growing trend of collaborative consumption and the desire for more authentic and local travel experiences. However, it's important to note that Wimdu faced intense competition in the crowded short-term rental market.

https://www.wimdu.com/

Headquater: Berlin, Germany, EU

Foundations date: 2011

Company Type: Private

Sector: Consumer Services

Category: Travel

Digital Maturity: Fashionista


Wimdu’s Related Competitors



Wimdu’s Business Model Canvas


Wimdu’s Key Partners
  • Rocket Internet
  • Investors
  • Property owners
  • Travelers
  • Payment providers
  • Insurance providers
  • Tour operators
  • Subsidiary 9flats.com
Wimdu’s Key Activities
  • business development
  • marketing
  • operations
  • customer support
  • website development
  • maintenance
  • legal
Wimdu’s Key Resources
  • A peer-to-peer platform that connects travelers and hosts and allows them to book private accommodations all over the world
  • Over 350.000 properties in more than 150 countries
  • Technology
  • Platform
  • Brand
  • legal operation agreements
  • Insurance support
Wimdu’s Value Propositions
  • to be a truly global travel community offering travelers and hosts the chance to experience travel from a different perspective
  • To offer a unique online marketplace where travelers can find accommodations that match their needs in more than 150 different countries
  • To give hosts an opportunity to earn money by renting out their home while they are away
  • To give homeowners who are not able to be home at certain times the chance to earn money on their vacant property
Wimdu’s Customer Relationships
  • Online
  • Personal
  • Self-service
  • Word of mouth
  • Social
  • Reviews
Wimdu’s Customer Segments
  • Guests
  • Travelers
  • Tourists
  • Hosts
Wimdu’s Channels
  • Website
  • App
  • Social networks
  • Blog
  • Newsroom
  • Affiliate program
  • API
  • Hosts' personal profiles
Wimdu’s Cost Structure
  • marketing
  • IT infrastructure
  • Product development
  • Customer service
  • Legal
  • Taxes
  • Staff
  • Office
Wimdu’s Revenue Streams
  • Service fee of 3% to 15% (depending on the rental price) for each booking
  • It charges a 12% service fee to hosts on all confirmed bookings
  • Transaction fee of 2.5% for each booking
  • Listing fee for hosts

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Wimdu’s Revenue Model


Wimdu makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Brokerage
  • Two-sided market
  • Featured listings
  • Peer to Peer (P2P)
  • Access over ownership
  • Sharing economy
  • Lease
  • Shared rental
  • Uberization
  • On-demand economy
  • Digitization
  • Affiliation
  • Referral
  • Disruptive trends
  • Lean Start-up
  • Blue ocean strategy
  • Online marketplace
  • Collaborative consumption
  • Disintermediation
  • Aikido
  • Take the wheel
  • Experience
  • Experience selling
  • Channel aggregation
  • Channel per purpose
  • Corporate renaissance
  • Product innovation
  • Long tail
  • Dynamic pricing
  • Sponsorship
Analytics


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Wimdu’s Case Study


Wimdu's CASE STUDY

When we think about the giants of the short-term rental market, names like Airbnb and VRBO immediately come to mind. But nestled within this space was another notable player - Wimdu. Founded in Berlin in 2011, Wimdu sought to carve out a niche in the increasingly competitive world of peer-to-peer online marketplaces for vacation rentals. In this case study, we dive into what made Wimdu special and unique, explore its business strategies, and understand the reasons behind its rise and demise.

The Humble Beginnings of Wimdu

Wimdu was born out of the rapidly evolving concept of collaborative consumption and shared economy models. As a marketplace for private accommodations, Wimdu aimed to connect travelers with hosts who had spare rooms or properties to rent. It promised a unique portfolio - over 350,000 properties in more than 150 countries, ranging from city apartments to rural and beach homes. But what distinguished Wimdu from its competitors was its broad spectrum of offerings and emphasis on personalized and culturally immersive experiences. Whether it was a weekend getaway in a treehouse or a luxurious stay in a penthouse, Wimdu had something for everyone.

A Unique Value Proposition

The core of Wimdu's value proposition revolved around providing travelers with unique and authentic travel experiences while offering property owners a chance to monetize their spaces. By displaying a wide variety of accommodation options, Wimdu catered to diverse traveler needs — from budget-conscious backpackers to luxury-seeking vacationers. Furthermore, Wimdu emphasized hosts' storytelling and the distinctive features of each property. This narrative-driven approach not only attracted more travelers but also fostered a sense of community and belonging among users. Indeed, it tapped into travelers' emotional needs by offering rewarding, fun, and entertaining experiences — going beyond just providing a place to stay.

Dissecting the Business Model

Wimdu's business model primarily relied on a commission-based revenue structure. Whenever a guest booked a stay, the platform charged a percentage-based fee to hosts. The commission ranged between 3% and 15%, depending on the rental price. Additionally, they charged hosts a 12% service fee on confirmed bookings and a transaction fee of 2.5%. This multi-stream revenue approach enabled Wimdu to sustain operations and scale rapidly. Key partnerships defined Wimdu's operational success. Collaborations with Rocket Internet and subsidiary 9flats.com provided crucial support in business development and market penetration efforts. Moreover, partnerships with insurance providers and payment processors ensured a secure and seamless user experience.

Technology and Customer-Centric Approach

Our emphasis on technology was evident in our robust online platform and mobile app. According to data from Market Research Future, the global vacation rental market size is projected to grow to $210 billion by 2030, reflecting an increased dependency on digital platforms for travel planning. Wimdu's investment in technology aligned with this trend by providing an easy-to-navigate interface, secure payment gateways, and responsive customer support. Furthermore, we adopted a customer-centric approach by integrating features that allowed for online, personal, and social interactions. We harnessed the power of word-of-mouth marketing and social reviews to build trust within our community. Our presence across multiple channels - website, app, social networks, and blogs - ensured we were accessible to our diverse customer base.

Challenges and Competition

Despite the growth and considerable market presence, Wimdu faced fierce competition. Market leaders like Airbnb dominated the landscape with their formidable capital and brand recognition. Additionally, as reported by Statista, the number of vacation rentals globally reached approximately 2 million in 2018, intensifying competition within the sector. Another challenge was regulatory scrutiny around short-term rentals in various cities, impacting our operational model. For instance, cities like Berlin and Barcelona imposed stringent regulations, creating operational hurdles.

The Rise and Decline

Wimdu scaled rapidly since its inception, largely due to its diversified offerings and strategic market positioning. By 2015, it had expanded its portfolio to over 350,000 properties. However, sustaining this growth in the face of intense competition and regulatory challenges became arduous. In 2016, Wimdu merged with 9flats.com to consolidate resources and bolster market presence. Yet, the consolidations were not enough to curb mounting operational costs and market pressures. By 2018, the company ceased operations, marking the end of its journey.

Reflection and Learnings

Wimdu's story is a testament to the dynamism and cutthroat nature of the sharing economy. While the company managed to carve out a niche in a crowded market with its unique value propositions, the intense competition and regulatory landscapes proved insurmountable. From a strategic perspective, Wimdu's emphasis on diversified offerings, storytelling, and customer-centric technology were pivotal in its initial growth. However, its journey also underscores the importance of scalability and regulatory agility. In essence, Wimdu's case study offers invaluable insights for emerging players in the short-term rental market: the need for a robust value proposition, tech-driven solutions, and an adaptive strategy to navigate market challenges.


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