What Is Airbnb and How Does It Work?

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Airbnb is a service through which homeowners can rent their spaces to travelers for short periods. It offers a wide range of accommodation options for those looking for alternatives to hotels.

Whether you’re planning your next vacation or you’re interested in making money with Airbnb, there are several factors to consider to help you decide if the platform is right for you. Here’s a look at how Airbnb works and the pros and cons you need to weigh before using it.

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About Airbnb

Airbnb dates back to 2007 一 Brian Chesky and Joe Gebbia came up with the idea when they couldn’t afford the rent. To earn extra money, they decided to rent their apartment to people who could not find a place to stay. Since then, Airbnb it has grown immensely and now benefits both guests and hosts.

Airbnb has about 6 million ads worldwide. There is a wide selection of properties on the Airbnb website, including individual roomsaapartments, houseboatscabins and yachts mooredamong other options. All of these real estate listings are tailored to meet the needs of travelers.

How does Airbnb work?

Airbnb is an online platform that connects hosts looking to rent their space to guests who need accommodation, usually at a lower price than hotels. Guests can browse the Airbnb website to explore all the options available at their destination.

How it works for guests

As a guest, you can use various filters to restrict your search options. These filters allow you to find your perfect partner based on pricellocation, amenities eptype of property. You can also use keywords to further narrow your search.

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It is important to note that hosts have rules for their spaces. For example, some hosts allow you to stay in their pet-friendly spaces, but some have a strict policy of not allowing pets. Once you find a suitable place, you can book your stay and communicate with the host through the site.

How it works for hosts

If you have an extra property or space, you can rent it earn extra money next door. All you have to do is create a profile with Airbnb and complete a series of verification processes. Once approved, you can list your property. But before doing so, it is important to check the legality of advertising a rental in your area.

As a host, Airbnb gives you control over how much you want to charge your guests. If you have no idea how to price your space, Airbnb may suggest a fee, but ultimately it is up to you to set the price.

How to choose between an Airbnb and a hotel

Since both are in the hospitality industry, Airbnb shares similarities with hotels in terms of service. Prices tend to be lower and more flexible for Airbnb than fixed rate hotels, depending on the level of luxury.

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Airbnb also offers a more personalized stay as you choose a place that suits your needs as a guest. However, there are a few factors you may want to consider to help you choose between an Airbnb or a hotel:


Hotels offer a variety of amenities to their guests, such as rooftop pools and lively bars. In addition, a hotel room often includes room service, which Airbnb does not guarantee. Some hosts even charge a cleaning fee.

Authentic Experiences

Airbnb is a better option for people who are visiting an area and are more interested in enjoying authentic experiences organized by locals. There are several experiences in the city that you can only explore through Airbnb and not from a high priced hotel. In addition, the hosts offer personalized suggestions on some of the best places to visit and activities to take part in.

Traveling With Children

For those traveling with children, hotels may be the best option because they have extensive security measures and facilities to keep children busy. Hotel accommodation can be a safer and more fun option for those traveling with children.

Security and Safety

It’s understandable to be wary of staying in someone’s space. However, Airbnb has made an extra effort to ensure the security of guests and hosts by including an extensive verification process during check-in.

Airbnb also includes a guarantee of up to $ 1 million for hosts in case of damage by guests. However, this only applies to eligible countries.

Advantages of Airbnb

Airbnb has experienced tremendous growth over the last decade, and it’s easy to see why. Airbnb has grown in popularity because it offers affordable accommodation for travelers. This is why many travelers prefer Airbnb.

Wide range of properties

Airbnb lists a wide selection of properties, including studios, apartments, condominiums, entire homes, houseboats, moored yachts, and even castles. Whether you’re looking to go on vacation or on a business or road trip, you can be sure you’ll find the one that suits your needs.

The hosts take care of the prices

As an Airbnb host, you are free to choose how much to charge your guests. This gives more room for flexibility compared to hotels. Once you determine the price, there will surely be competition. Therefore, the hosts try to make their property as accessible as possible, which benefits the guests.

Free listings

Unlike many online platforms, Airbnb does not charge its hosts a fee for posting their property.. After providing all the information about the property and a little about themselves, the hosts have their property listed for free. This makes the business even more attractive as it is highly profitable.

Custom searches

Due to the large number of ads available, guests can use various filters to search for the right Airbnb based on their location, size, pricing, and other specific features.

Disadvantages of Airbnb

Like anything else, Airbnb has some drawbacks.

Lack of Quality Assurance

With hotels, in general you can be sure that you will receive what you paid for as the rooms are usually as advertised. With Airbnb, there is room for dishonesty and adornment as hosts are free to create their own tokens. Therefore, before booking an Airbnb, you should check the opinions of previous guests about their experience with the property and the host.

Additional fees

Airbnb charges to guests a service fee that generally amounts to 14% of the subtotal of the reservation. Hosts, on the other hand, usually charge a service fee of 3% of the subtotal.

Property Damage

There is some risk of property damage to the hosts. Most hosts report incident-free stays, but there have been incidents of property damage by wild attendees and guests. Airbnb offers a damage protection program for hosts, which is reassuring, but only covers specific types of damage and is not available in some countries.


Although Airbnb rentals are not subject to the same regulations as hotels, hosts are subject to occupancy taxes. Other taxes that can be levied include value added tax and rental income taxes. These taxes usually depend on location and may differ from place to place. Both hosts and guests should be familiar with the relevant tax regulations.

To take

Airbnb is a great option if you are looking for a place to stay at lower prices. Depending on your needs, you can choose the most suitable property for you from the Airbnb website. Also, if you have extra space in your home or have a property out there, you can make extra money by staying.

About the author

Lydia Kibet is a freelance writer specializing in personal finance and investing. He loves to explain complex topics with easy-to-understand language. His work has appeared on GoBankingRates, Investopedia, Business Insider, The Motley Fool and Investor Junkie. He currently writes about investing, banking, insurance, real estate, mortgages, credit cards, loans, and more. Connect with her on Twitter or moneycredible.com.

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