AirBnB is an online company that connects people willing to rent out their homes and spare spaces with those in need of these accommodations. In other words, there are two categories of users that utilize AirBnB – hosts and travelers.

The hosts, list and rent out their spare or vacated rooms and properties, which could be single rooms, suites, apartments, whole houses, moored yachts, houseboats or even castles. The travelers on the other hand, search for, select and book any of these spaces that best suits them.

AirBnB services, cover 192 nations around the world. The company has grown beyond just catering to budget-conscious tourists to taking care of the lodging needs of travelers with various purposes and from all walks of life.

The vision of AirBnB is to offer “a trusted community marketplace for people to list, discover and book accommodations around the world.” Both signing up and creating host listings on AirBnB are totally free, and the hosts choose their own nightly, weekly or monthly prices. Properties can be promoted using titles, descriptions, captioned pictures and user profiles where prospective guests can learn a little about the hosts.

The guests (or travelers) can search the whole database by inputting the details concerning where and when they will be traveling.  They may also add more info to make the search more specific by selecting room type, price, size, amenities, property type, host language and keywords.

COST AND PAYMENT

Prospective guests or travelers on AirBnB can access and search the database without any restrictions, but you will have to sign up and create a profile before you will be allowed to book reservations. A traveler may contact a host via an online form provided by the AirBnB site.

This form is available on every listing page. Reservation requests may then be submitted with a click on the “Book It” button, and the payment details entered through a safe payment channel. An extra guest fee of 6-12% on the reservation cost must be paid by the traveler to cover for the customer support and host guarantee provided by AirBnB.

Various payment methods are allowed by AirBnB including major credit cards (like Visa, AMEX, MasterCard, JCB and Discover), Google Wallet (only in the US on the AirBnB Android app), PayPal, and some debit cards that can be handled in the same way as credit. Guests will not be charged until their reservation is confirmed by the host.

Immediately a guest’s reservation is confirmed and paid for, AirBnB will hold the payment for a day before discharging the finances to the host. The methods of payout and currencies used depend on the country in question, but automated clearing house (ACH)/direct deposit, bank transfer/international wire, Western Union, Payoneer, PayPal, and paper checks (in Canada and the US only), may be used for the payment of hosts.

A service fee of 3% is deducted from the host’s payment by AirBnB for each reservation made in compensation for the processing costs of the transaction. This fee is separate from the 6-12% extra service fee paid by the guest.

One more cost that may be encountered while using AirBnB is a value-added tax (VAT), which applies to most European guests and hosts). Additionally, a guest that pays for a reservation in a different currency than that stated by the host on the listing will be bound by the varying exchange rates used by AirBnB.

ADDITIONAL FEATURES

Exchanging accommodations for money is the main emphasis of AirBnB, but the company has been expanding its services to incorporate experiences and restaurants of late.

Searching by location, travelers will see a list of experiences provided by hosts, as well as the accommodations obtainable during the time that they wish to spend at that location.

These experiences could include sightseeing, classes, concerts, workshops, and other tourist-driven doings. Hosts putting forward experiences may also create separate pages to promote them, just like those offering accommodations can. The process of booking an experience is quite similar to that of booking an accommodation.

Beside experiences, travelers can also find restaurants in their destinations on AirBnB. The restaurants in the listings also have their unique profile pages, descriptions, pictures and reviews from hosts in that location. Reservations can be made at any of the restaurants via the AirBnB site, in collaboration with the reservations service, Resy.

Pros

Both hosts and guests benefit from AirBnB. Hosts get to interact with travelers from around the world while making some money, and guests get somewhere to stay that is usually less expensive than a hotel and sometimes offers a warmer and realer experience of the location.

A lot of guests appreciate the homeliness that comes with a lot of the accommodations offered on AirBnB. The individualized service that the hosts and customer care on AirBnB bring to the table is one worth considering, and really makes for a nice travel experience, most find.

The service provided by AirBnB is mostly targeted at economical vacationers, but a lot of business trippers are also now keying into it, as it is cost-efficient. A lot of companies are taking advantage of the service to make huge saves on venues for their business conferences, retreats and meetings. 

Beyond the obvious cost cuts, there is also the natural appeal of getting to stay in somebody else’s actual home. A lot of business people would actually trade in their “standard” hotel experience for a more relaxed and homely atmosphere to bond and team up with colleagues in a comfortable and pressure-free setting.

Cons

With all the massive benefits that a service like AirBnB’s offers, quite some unease is still present for both hosts and guests alike. The greatest concern on the part of the host would be exposing their property to the risk of damage and misuse.

A lot of transactions are completed without any such issues, but there are still some scary stories of party-loving guests wrecking whole houses when the AirBnB hosts were under the impression that their guests would be simple suburban families, as well as cases of damaged and stolen items and drug littering.

AirBnB does assert on the site that “you’re unlikely to experience any issues with property damgage.” Their host guarantee system is supposed to “provide protection for up to $1,000,000 in damages to covered property in the rare event of guest damage, in eligible countries,” and this promise should still the minds of the hosts.

It is a smart move to read the terms and conditions and get a full understanding of what they cover and what they don’t.

For instance, as a host, you will find that things like cash, expensive art, jewelry and pets are not taken care of under the terms and conditions. You will also learn what steps are to be taken if you are to get payment within the confines of the host guarantee.

Additionally, hosts must be aware of the details of their insurance coverage. Discussing this with a professional insurance agent first is another great idea.

The major issue that guests may have is that the property doesn’t fit the description that was pitched on the AirBnB website. Another issue might be unresponsiveness of the host to their needs.

There have also been cases where someone other than the owner of a property puts it up for rent on AirBnB, and then the real owner shows up confused about the stranger in his/her apartment.

ADVICE

Hosts and guests can both lower these risks by making use of the features provided by AirBnB including messaging, verification of IDs, profiles, secure payment platforms, reviews, and the Host Guarantee.

Hosts should also be aware of their local and state laws pertaining renting out properties. For instance, in the state of New York, it is unlawful to rent out a room, apartment, single-family home, for less than a month if you don’t stay there.

Ignorance of such laws may lead to heavy fines. This warning is also included on the AirBnB site.

Taxes

Hosts must also ensure that they verify their rental income taxes if any. AirBnB takes taxpayer data from hosts in the US, to help with tax compliance, so as to offer an account of their annual income using 1099 and 1042 tax forms.

FINAL VERDICT

AirBnB offers a unique travel service whereby those with room are connected to those that need room and are willing to pay a fee, and both sides are satisfied at the end of the day.

The kind of services that AirBnB provides used to be associated with frugal tourists looking to save as much as possible on their accommodation. However, at the moment, a lot of travelers including professionals and business people appreciate and embrace the uniqueness and memorability of the experience that a lot of the hosts on AirBnB are out to offer.

Even though there are some risks accompanying the use of a shared economy system like AirBnB, there are also precautionary measures that the users can take to  ensure that both parties get the best out of the transaction and experience and deal with all potential issues.