How Does Airbnb Work?

Airbnb is the largest vacation rental site out there, with millions of listings available worldwide, many of which are owned by regular people rather than big property managers. In fact, Airbnb launched in 2007 when its now-CEO Brian Chesky inflated three air mattresses to make what was the first-ever Airbnb listing (and you can actually still book a room in Chesky's own house, though it's rarely actually available to book).

This popular peer-to-peer vacation rental platform certainly transformed the travel industry — and it can be a cost-effective way to travel.

Before you book an Airbnb, here's what you need to know.

Airbnb is an online platform that allows you to book places to stay. While most famous for providing vacation homes, you can also book private rooms, shared rooms and even hotel rooms using Airbnb.

The properties available on Airbnb are mixed; some are owned by private individuals, while others are led by property management companies.

The Airbnb booking platform has many different filters so you can choose a property that suits your needs. This can include pet-friendly places, stays of longer than a month and the inclusion of a pool, among other options. You can also choose to filter your stay by nightly or monthly rates.

Beyond vacation rentals, Airbnb has also expanded to allow you to book what's called "Airbnb Experiences," where you can book in-person and online experiences in destinations around the world such as cooking classes, photography sessions or walking tours.

» Learn more: How do you become an Airbnb host and how much can you make?

Airbnb has a website and an app, both of which are fairly easy and intuitive to use. On the welcome page, use the search bar to input your desired location, dates of travel and number of guests. Airbnb then displays results featuring both an interactive map and a list.

Understanding Airbnb pricing

That search page by default shows the nightly rate, but often the nightly rate is rarely indicative of overall price you'll pay. There are taxes, which can vary based on where you're booking, and then there are service fees, which is a cut Airbnb takes. The listing might also have other fees such as pet fees or cleaning fees which are determined by the owner, and an lead to a substantial price difference even between properties that charge the same nightly rate.

A June 2022 NerdWallet analysis of 1,000 U.S. Airbnb reservations with check-in dates in 2022 or 2023 found that the median cleaning fee per Airbnb listing for a one-night stay was $75, which is why some listings that seem like they're, say, $117 a night balloon up to $312 when all those fees get thrown in.

Airbnb has plans to roll out a toggle so travelers can opt for search results to display total price, including all fees. Though, users who don’t toggle the total price display will still see nightly rates only.

Booking on Airbnb

You don’t have to have an account to search Airbnb, but you do need to have an account to book with Airbnb. If you don’t have one when you try to book, you’ll be prompted to create one.

Some properties allow you to make reservations instantly, similar to a hotel booking. Others require that you request permission from the unit owner. Either way, you’ll input your payment information and write a message to the host.

If it’s an automatic reservation, your dates will be immediately confirmed. If not, you’ll wait up to 24 hours for the host to respond to your request. A response will be visible both in your Airbnb account and in the inbox of whichever email you linked to the account.

Once your booking is confirmed, your card will be charged. If they deny the reservation, it won’t cost you anything.

So now you know how to use Airbnb, but how do you figure out which ones are decent — and which ones you should skip?

Book with Airbnb Superhosts

Like we mentioned above, Airbnb has a variety of filters from which to choose. These can help you narrow down your list to nicer properties. The most common option you’ll find is the Superhost toggle.

In order to become a Superhost, an owner must have a 4.8+ overall rating, 10+ stays in the last year, less than a 1% cancellation rate and a 24-hour response rate at least 90% of the time.

Book Airbnb Plus and Airbnb Luxe properties

Depending on the market, you can also find toggles for both Airbnb Plus and Airbnb Luxe services. These two options offer curated properties — so that you’ll only get the best of Airbnb when booking. Airbnb Luxe promises homes with high-end amenities, services, and dedicated trip designers.

Airbnb Plus homes aren't necessarily ultra high-end, but they're vetted as among the highest-quality homes with hosts known for great reviews and attention to detail. Airbnb Plus homes are easily designated with a "Plus" badge, indicated that home has been verified through in-person quality inspection.

Book highly-reviewed properties

However, you don’t need to book a Superhost or Luxe property in order to find a good Airbnb rental. The most important thing to consider when searching is the property's review. These insights from past renters can give you important nuggets of information about the property itself — including details about communicating with the host, cleaning requests ahead of checkout, the property location and amenities.

Although it can be tempting to book cheaper homes with fewer reviews, be aware that you’re taking on some risk when doing so.

Use Airbnb Categories to incite wanderlust

If you're open-minded to destination, but have a specific type of unique lodging in mind, say, a treehouse or a Hanok (which is a traditional Korean homes constructed of natural materials), use Airbnb's Categories tool. The tool has proven to be a popular way of browsing Airbnb's more eclectic properties, and Airbnb say it has received 300 million views within the first six months of launch.

As of November 2022, the top five categories by median earnings since launch, according to Airbnb, are:

• Chef’s kitchen: $5,817

• Design: $5,226

• Desert: $3,718

• Campervans: $2,952

• Mansion: $2,872

» Learn more: Best credit cards for Airbnb

Airbnb codes as travel via Chase, which means you’ll earn 3 Chase Ultimate Rewards® points per dollar spent on the Chase Sapphire Reserve® card.

Airbnb also codes as hotels via Citi, which means you’ll earn 3 Citi ThankYou points per dollar spent on cards such as the Citi Strata Premier℠ Card, Citi Premier® Card (no longer available to new applicants) and the Citi Prestige® Card (no longer available to new applicants).

One downside to booking via Airbnb is the lack of a loyalty program. Unlike hotels, you’ll get no rewards or discounts for being a frequent Airbnb customer. You’ll also not see perks like free breakfast or reward nights on Airbnb’s platform.

You can also earn airline miles via British Airways, Delta Air Lines or Qantas Airlines when you book an Airbnb through their respective landing pages.

• Earn 1 Delta Skymile per dollar spent (book via this link).

• Earn 2 British Airways Avios per dollar spent (book via this link).

• Earn 1 Qantas point per Australian dollar spent (book via this link).

» Learn more: How to earn or redeem points and miles on Airbnb stays

Now we know how Airbnb works, but what do you do if it’s not to your taste? Although there aren't any other vacation rental platforms out there that are quite as big as Airbnb, you still have options.

Vacation Rental By Owner (VRBO) works very similarly to Airbnb, with a wide range of properties around the world.

» Learn more: Airbnb vs. Vrbo: Which is better for travelers?

Vacasa is another vacation rental company, but it differs quite a lot from both Airbnb and VRBO. Unlike the other two, Vacasa bills itself as a professionally managed vacation rental company. Even better? You can use Wyndham points to book Vacasa rentals at a rate of 15,000 points per bedroom, per night — an extraordinary deal.

Finally, Homes and Villas by Marriott International offers vacation rentals that will earn Marriott Bonvoy points. You can also redeem your Marriott points for these properties, although you won’t get the same incredible value as Vacasa bookings.

There’s no doubt that Airbnb can be a helpful and freeing platform for those looking to avoid hotels. Especially if cost is a priority for you, Airbnbs are typically cheaper than hotels for large groups, and they're also cheaper for longer stays.

Before booking, however, you’ll want to be certain that you’ve found the right property. And, make sure you're paying for your Airbnb with a credit card that will help maximize your earnings.

Whether you want a nice spot for working away from the office or a place for an extended vacation, Airbnb is sure to have something to suit your needs.

Photos courtesy of Airbnb.