What Is Airbnb? What to Know Before Becoming a Guest or Host

Airbnb takes a unique approach toward lodging. Part of the “sharing economy,” Airbnb offers you someone’s home as a place to stay instead of a hotel. On Airbnb, you can find places to crash on your backpacking trip through Europe, or a spot to rent for a month during your internship in Los Angeles. It’s also a great way to explore a town you’re thinking about moving to, or finding an alternative to traditional hotel options in 2022 if you’re just around for a weekend. If you want to rent out extra space in your own home, you can host through Airbnb and make money for allowing a guest to stay the night.

This all sounds pretty simple, but there’s much more to Airbnb than you might imagine. What is Airbnb exactly? Here’s what you need to know about the popular home-sharing site before you book a stay or become a host.

Airbnb’s originås

Airbnb founders Joe Gebbia, Brian Chesky, and Nathan Blecharczyk developed the business in 2008. Initially, Gebbia and Chesky started off using their own place as a bed-and-breakfast to make a few extra bucks to pay rent. With a big design conference coming to the San Francisco area and a city full of sold-out hotels at the time, they saw a potential market for the idea and developed a website called airbedandbreakfast.com.

The startup experienced several ups and downs, and it went through at least three separate launches. Finally, with new funding Air Bed & Breakfast became Airbnb in 2009, and that was the company’s turning point. Airbnb went public in 2020 under ABNB.

Here’s how Airbnb works for guests

Airbnb does not own properties. It acts as an intermediary between those who want to rent out space and those who are looking for space to rent. Creating an account on Airbnb is free, and it is relatively simple. To do so, you enter your name, email address, birthday, and a password. Airbnb also asks that you agree to treat everyone equally, regardless of race, religion, sex, or other factors. Once you agree, your account is active. You also have the option to sign up through Facebook or Google.

If you like the listing, you can request to book it. The site prompts you to go through a few more steps, like entering in more of your information. Once you complete those steps, you can complete your request and pay for your room. After your first booking, the process is much quicker and easier.

Before your reservation is final, however, you must wait for approval from the host, unless your listing is an “instant book” listing, as those listings don’t require host approval.

For non-instant book listings, Airbnb also recommends that guests message hosts before booking to double-check availability. If you don’t hear back from the host in a timely manner, you can continue to message other hosts in the area until you find one you like. Under the host information section of each listing, you can see the host’s response rate and response time to get an idea of how quickly a host will respond to your message.

Airbnb also offers a higher “tier” of homes called Airbnb Plus, an elite selection of properties that stand out for their excellent ratings or because of something particularly special about (part of a local landmark, etc.). The average price for these is typically higher.

Airbnb hosts and guests do not exchange money in person. Guests pay for everything on the Airbnb site when they make their reservation, even having the option to split costs between friends, and hosts receive pay from Airbnb. Airbnb uses PayPal, direct deposit, and other payment methods.

Here’s how Airbnb works for hosts

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

To rent out extra space in your home, you must first create a free Airbnb account. You’ll also want to look into any fees or restrictions the areas you live in may require. Then, click on “become a host” in the upper right corner of the page. After that, you’ll need to create a listing for the space. A listing is a lot like a profile page for the space you want to host; just like a social media profile, the nicer your page looks, the more attention it will draw. It’s a good idea to make your space look as nice as possible and take flattering pictures of the space with good lighting. How much should you charge? Airbnb helps you set the pricing by indicating the averages for your area.

You can also make money on Airbnb by hosting an experience. “Airbnb experiences are activities designed and led by inspiring locals. They go beyond typical tours or classes by immersing guests in a host’s unique world,” says the Airbnb site. If you want to host an experience, review Airbnb’s quality standards, which indicate requirements for experiences. Basically, the guest must be gaining access to something, participating in something, and offered an original perspective. After reviewing the quality standards, design an experience and submit it to Airbnb for approval. Once approved, you are ready to publish and host your experience.

Airbnb fees and room pricing

In addition to the cost of the room, Airbnb charges a guest service fee that typically maxes out at 14.2%. Hosts also pay a service fee of around 3%, which Airbnb adds to each transaction. Hosts who offer experiences are subject to a 20% service fee.

The price of a room on Airbnb depends on a variety of factors, including location, the quality of the listing, and the amenities. Prices are also subject to market inflation (something particularly notable in 2021) and may vary greatly depending on local demand. Currently, the lowest room prices are around $50, which is usually less expensive than a hotel, but these can be difficult to find depending on the area.

Average daily rates on Airbnb in 2021 are a good example of how much location matters. For example, in the top 50 Airbnb cities, prices ranged from an average of $646 per night in Key West, Florida, to $200 per night in Bend, Oregon. Popular destinations will always cost significantly more on the service.

Airbnb safety and security

You may have heard reports of a guest destroying a host’s home, a host endangering a guest’s safety, or an Airbnb host watching a guest through a hidden camera. Airbnb has taken some actions to help promote safety and security for hosts and guests, such as having users provide identification, improving profile and review systems, and implementing a host guarantee that reimburses eligible hosts for damages up to $1 million. Airbnb may also conduct public records checks, such as sex offender registries, to see if a user has a past record.