How Does Airbnb Work?

how does airbnb work

By The Hospitable Team

Founded in 2008, Airbnb is an online peer-to-peer marketplace that, according to the latest data, has 5.6 million listings in more than 100,000 cities and towns and 220-plus countries worldwide.

Travelers choose Airbnb because it can offer them a homey place to stay with more character and often for a lower price than hotels. Hosts who use this platform get an opportunity to offer their rentals to millions of people worldwide.

But how does Airbnb work? Should you consider renting out your property there to make extra money? In this article, we’ll try to answer these questions.

Wondering which website is better for listing your rental? You may want to check out the articles comparing Vrbo vs. Airbnb and helping to get started with hosting on   

How Does Airbnb Work?

Airbnb’s business model is straightforward. It’s a service that connects people who want to rent out their homes with travelers looking for accommodations in specific locations. It makes the bulk of its revenue by charging a service fee for each booking. The service fee covers the cost of running the platform and providing support.

The platform offers a variety of filters that help travelers find the right listing and a chat system that connects Airbnb hosts to guests directly. Airbnb also handles secure payments through the site and verifies personal profiles and listings. You may check our articles to learn more about Airbnb identity verification.

Airbnb is a part of sharing economy, so it’s a community based on trust. Both guests and hosts are asked to review each other. This allows creating a rating system for all listings that, in most cases, ensures everyone has a good experience.

Reviews influence your earnings as a host.

It's best to automate your reviews management. Follow up with the happy guests, and don't waste time publishing your reviews.

How Does Airbnb Work for Owners?

Airbnb has different hosting options. You can rent out the extra space in your home or your entire home, and you can host experiences in your area.

So how does Airbnb work for owners who want to rent out their property? Airbnb allows you to list not just homes but all sorts of accommodation, including houseboats, tents, single rooms, and treehouses. It caters to all types of travelers, so you can also find some of the most expensive properties that attract guests looking for luxury experiences.

To become an Airbnb host, you need to create a free account on the platform. But first, you should check your local laws and regulations to make sure that there are no Airbnb restrictions in your area. In many cities, you must register, get a permit, or obtain a license before listing your property or accepting guests. And certain types of short-term bookings may be prohibited altogether. You should also be aware of the vacation rental tax rules in your location.

If you click on Become a Host in the upper right corner of the Airbnb page, you’ll be able to create a listing for your rental space. Hosts don’t have to pay to list their properties. A host service fee (commission of 3%) is only charged upon confirmed bookings.

The listing will include a written description of your rental, photos, and a list of amenities, as well as information about the local area. You also need to provide information about your house rules, cancellation policy and set your pricing.

Keep in mind that your listing is a lot like a profile page for the space you want to host. And just like a social media profile, the better your listing page looks, the more attention it will attract. So you should make your rental look as nice as possible and take flattering Airbnb pictures of the space with good lighting.

Once you have your listing set up, Airbnb provides various services for hosts, including 24/7 support to help make things right with rebooking assistance, refunds, reimbursements. It also provides up to a $1,000,000 Host Guarantee to cover unreasonable damage inflicted on the property and insurance programs. This protection comes at no extra cost, although it doesn’t cover everything.

Your income as a host may vary depending on your property location and the existing demand for Airbnb travel. The hosts who typically earn more are the ones with an entrepreneurial mindset who treat their rental as a business.

That requires an ongoing time commitment to ensure perfect communication with guests. You should be responsive and reply to inquiries and your guests’ questions as soon as possible to make them happy. Then, you’re more likely to get 5-star reviews, increase your rating, and get more bookings. You may also opt to hire professional cleaners and gather a team to help you with maintenance.

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How Does Airbnb Payment Work?

All payments are processed securely through Airbnb’s online payment system. Guests are charged when a reservation is made, and hosts are paid 24 hours after check-in.

If your guest is staying at your rental for 28+ nights, you’ll receive your payout monthly for their reservation. If you have multiple Airbnb listings with check-ins on the same day, your funds will usually be deposited as a single payout. If you set a minimum payout amount, your payout won’t be released until that amount is met.

For most countries, Airbnb takes a 3% commission from hosts (the rate can be higher for Airbnb Plus hosts). This fee is calculated from the booking subtotal (the nightly rate plus cleaning fee) and is automatically taken from a host’s payout.

Payment options vary depending on the country, but how you collect payment is up to you. You can choose direct deposit, PayPal, Western Union, or several other options.

Bottom Line

There are a lot of benefits to becoming an Airbnb host. But it’s important to keep in mind that to do it right, you need to invest some time and perhaps some money in making your rental space appealing to travelers. A good idea is to use short-term rental software like to automate routine tasks and save time.

Still not sure whether Airbnb is the right platform for listing your property? Check out our article to learn more about the pros and cons of Airbnb hosting.

vrbo vs airbnb

Vrbo vs. Airbnb: What Is Best for Your Rental?

Airbnb and Vrbo are among the best international vacation rental platforms that have gained popularity among travelers and property owners. Choosing which one would best fit your rental property, or whether you should list it on both, could seem tricky at first. This post will help you get started.

Airbnb names

Airbnb Names: How to Create Titles That Attract More Bookings

Looking to start Airbnb and can’t decide how to create a suitable name for it? Coming up with a catchy Airbnb title is one of the essential aspects of optimizing your listing. In this article, you’ll find useful tips on how to create attention-grabbing Airbnb titles along with some Airbnb names ideas for inspiration.

Booking guidelines Host Guide for Beginners

Today, is one of the largest accommodation booking platforms, with more than 28 million listings in 226 countries and territories across the globe. Planning to become the part of this crowd? Our guide will get you started.

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