How Does Airbnb Work?

Before we try to understand how does Airbnb work, let’s talk about what is Airbnb. Airbnb is an online platform that brings together homeowners who want to rent out their space and travelers who wish to book accommodations in specific locations while they are away from home. 

Airbnb was started in 2007 when the co-founders decided to turn their living room into bread and breakfast by keeping an air mattress in the room. It has come a long way since then. According to Airbnb’s latest data, it has over 7 million listings and 2.9 million hosts covering more than 100,000 cities and towns and 220-plus countries worldwide. 

Vacation rental owners and new hosts are often confused about the workings of Airbnb and how they can use it to their advantage. In this blog, we’ll learn all the basics of Airbnb and everything you need to know about the platform as a host.

How does Airbnb work?

Airbnb website facilitates homeowners to create a listing for their property. The listing will include a written description of the property, some pictures, and a list of amenities provided by the host. You can follow Airbnb hosting tips to become a better host for your guests. The listing also includes a description of the location of the property to give a complete picture of where their potential guests will be staying and what to expect out of their stay. 

The description helps travelers use filters to search for accommodation that suits their needs. These filters may include the number of bedrooms, location, price, list of amenities, etc. 

The trust factor in the site is instilled with the help of a rating system. Both the guests and the hosts are required to review each other, ensuring that everyone has a good experience. 

What kind of travelers use Airbnb?

You must be aware of the demographic you would be serving if you want to become a short-term rental host. In general, a guest booking on Airbnb will be a young, tech-savvy millennial traveling to your destination for leisure or business purposes. Millennials account for roughly 60% of all guests who have ever booked a rental on Airbnb. 

These travelers prefer authentic, local properties that provide them with a more cultural experience. Therefore, they expect properties listed on Airbnb to be able to fulfill this requirement. Also, these travelers might choose Airbnb as it provides a simple and often less expensive alternative to hotel rooms which are otherwise harder to book in busy urban areas. 

How does Airbnb work for Hosts?

Airbnb allows direct integration of reservation systems for bed& breakfast owners and vacation rental companies. Most of these integrations will allow you to sync your property’s content, rates, and availability to facilitate easy management of content on Airbnb. Additionally, any bookings made on Airbnb will reflect on your booking engine. 

If you are a pre-existing Airbnb user, these platforms will allow you to sync your Airbnb listing with the engine so that you don’t lose your host ranking and status. The majority of these integrations are free. The only payment you are expected to make is Airbnb’s commission of 3% to 5% per booking, depending on the cancellation policy you choose. 

Airbnb Host Requirements

To become a host on Airbnb, you must make your listing available for at least 30 days over the next year for every listing. Also, ensure that you provide rates for those 30 days when you are making your listing available. 

Airbnb Host Rules

There are also some basic Airbnb host requirements that you need to fulfill to be eligible to rent your property on the channel:

  • Provide the guests with at least the essential items like toilet paper, soap, sheets, and a minimum of one towel and pillow per guest. You can go above and beyond with what amenities you provide your guests if you have the means. It will reflect in your host ratings. 
  • Be responsive! Reply to all inquiries and requests for reservations within 24 hours. The quicker you are with your response, the better your chances of getting a booking. 
  • Be prompt with your reservation acceptance. 
  • Airbnb is very particular about reservation cancellations. They are aware that travel plans considerably depend on accommodations, so they see cancellations in a terrible light. Ensure that you only accept reservations that you can take and don’t cancel. 
  • Be consistent with your quality of service. Provide good quality of service and achieve high ratings, which makes travelers prefer your accommodation more. 

Providing your guests with the basic service is mandatory, although you can choose to do extra and offer them the best experience possible as your guest. In addition, you can learn more about Airbnb hosting tips to up your hosting game and woo your guests. They will surely return the favor in the form of favorable reviews that will help you in the long run.

How to give property access to guests without keys?

The concept of Airbnb can be unusual for those who are used to being greeted by the hotel staff at the reception and having their keys handed over to them. So you might wonder how to get the keys to the property to your guests without a reception area? Below are a few ways to give access to your property to your guests: 

  • This one is simple-meet them at the door or a mutually decided location. If you are a host who is available at different times and live near the listing, this will be the best option for you. You can personally meet and greet your guests and show them around before handing them the property keys. 
  • If you have other commitments and cannot make yourself available throughout the day, you can hand over the keys to a trusted neighbor or a friend. They can pass on the keys to your guests and acquaint them with the property. 
  • You can also use a key safe or a lockbox that can safely hold your keys until your guests pick them up according to their convenience. These lockboxes or key-safe open when your guests enter a password or code. 
  • If you have a spare property but don’t have the time to manage it properly, you can hire a professional Airbnb management company. They will handle all the check-ins and check-outs and even prepare your property for the next guests. 

Now that you know how to manage check-ins, let’s talk about providing your guests with discounts for more extended stays. It would be best if you also learned about Airbnb pricing strategy to optimize your revenue from your listing. 

How airbnb works

How does the Airbnb weekly discount work?

Besides applying a minimum length of stay strategy, offering weekly discounts to your guests is an excellent way to ensure longer bookings and a higher occupancy rate. Your weekly discount will apply to any reservation that’s over seven days. Below are the steps to set your weekly deals on Airbnb:

  • Go to your listing
  • Click Pricing
  • Go to Length-of-Stay Discounts and click Edit
  • Add your weekly discount and click Save

You can also use various customization options available on PriceLabs dynamic pricing solutions to manage your weekly and monthly discounts, seasonal pricing, minimum stay restrictions, specific date overrides, and much more. 

How does payment work on Airbnb?

Airbnb charges a commission rate of 3% from hosts in most countries. Airbnb Plus hosts can be charged a higher rate. This fee is calculated from the booking subtotal which is a sum of the nightly rate and cleaning fee. Airbnb automatically deducts it from the final payout. 

The method of payment may vary across countries. Direct deposit, International wire transfer, PayPal, Western Union, and AIS debit card (only for Cuba) are some of the preferred payment methods.

The remittance rules of different countries can affect the availability of these payment methods. However, most hosts choose the options mentioned above for their payouts. 

How does the security deposit work?

Some homeowners on Airbnb demand a security deposit for their reservations. You can return the security deposit or release the authorization hold at the end of the booking once you ensure that everything is in order. 

It usually works by placing an authorization hold on the payment method of the guests two days prior to their arrival. For example, the guest used a credit card with a $10,000 limit to make the payment for his reservation, and the security deposit was $500. In this case, the bank will reduce the credit card limit to $9,500 until the host releases the hold. 

In case of any issue or damage to your property, you can report the incident and submit a claim within 14 days of their check-out. This claim can request a part or all of the deposit.  

Airbnb Superhosts and Airbnb Plus

Becoming an Airbnb Superhost or Airbnb Plus host requires you to meet specific criteria set by Airbnb. Once you gain this status, you enjoy special perks like increased visibility and more bookings since you become a trusted host. Also, the Airbnb newsletter features your listing; you get more revenue as you can charge more for your accommodation and a $100 travel coupon for you to redeem along with a 20% higher bonus. 

You can strive for this status once you have dipped your toes in the vacation rental world and are more well-versed with the art of hosting. 


Becoming a host on Airbnb and starting your own vacation rental business is not a cakewalk, but it is not rocket science either. If you are reading this, then you have at least gotten yourself acquainted with the basics of Airbnb and how you can get started with it. In addition, you can get a subscription to tools like PriceLabs to help you get started with your dynamic pricing journey and make the most out of your Airbnb listing. 

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