According to Airbnb’s website, Airbnb provides “a trusted community marketplace for people to list, discover, and book unique accommodations around the world ….” Although some unfamiliar with Airbnb confuse the Airbnb with “Aurbnb” or “Airbng” to tens of millions of property hosts and guests, Airbnb represents a well-known, trusted company that provides a valuable service in the new sharing economy. In the world of Airbnb terminology, Airbnb “hosts” manage their room(s) or property, which might be a single room, a suite of rooms, apartments, moored yachts, a tree house houseboats, entire houses or some other exotic structure. For hosts wanting to try the service out, it’s easy and free to create a new property listing on the Airbnb website. Along with a property description, photos and a list of amenities, hosts specify how much to charge per night, per week or per month. Each Airbnb property listing allows hosts to promote their properties using a short title and a longer property description.
Airbnb guests find properties using different criteria such as location, length of stay and price. After selecting their preferred criteria, they are able to search for available properties. Guests can further narrow their search by selecting:
- Room type – entire place, private room or shared room
- Price – range from minimum to maximum
- Size – number of bedrooms, bathrooms and/or beds
- Amenities – wireless Internet, TV, kitchen, pool, pets, etc.
- Property type – standard properties such as apartments, houses and bed & breakfasts, as well as non-standard accommodations such as castles, caves, igloos and tipis
- Host language – English, Spanish, French, etc., including sign language
- Keywords – if the traveler is looking for something specific, such as “oceanfront” or “close to Le Louvre”
If you visit Airbnb’s website and search for their mission or vision, you won’t find this information very easily. However, if you read through their blog, you’ll find the following mission-like copy:
For so long, people thought Airbnb was about renting houses. But really, we’re about home. You see, a house is just a space, but a home is where you belong. And what makes this global community so special is that for the very first time, you can belong anywhere. That is the idea at the core of our company: belonging. In fact, their company logo, the Bélo is said to represent the universal symbol of belonging.
How it Works
Travelers can search for properties at any time, but at some point need to create an Airbnb profile and validate their identity with an ID to book any reservations. Travelers can contact hosts using Airbnb’s chat/email tool, which is the preferred means of communication to ensure Airbnb has a record of guest-to-host dialog. After a guest has selected the appropriate property features—and finds an ideal property—they can click on the “Book It” button and pay for their reservation via a secure payment system. Airbnb makes their money by charging a reservation fee of 6-12%. Travelers are not charged until the host confirms the reservation.
State and Local Laws
Hosts need to be aware of state and local laws that may limit or prohibit the renting of property. In New York, for example, it’s illegal to sublet a single-family home, apartment or room for fewer than 30 days if you aren’t living there.
In Boston, the mayor and other legislators are pushing for fees to be levied against Airbnb properties and a reduction in the number of nights that hosts can rent their property if their listing is not their primary residence. Not surprisingly, Airbnb includes this warning on their website:
“Some cities have laws that restrict your ability to host paying guests for short periods. These laws are often part of a city’s zoning or administrative codes. In many cities, you must register, get a permit, or obtain a license before you list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement.
These rules can be confusing. Often, even city administrators find it tough to explain their local laws. We are working with governments around the world to clarify these rules so that everyone has a clear understanding of what the laws are. In the meantime, please review your local laws before listing your space on Airbnb. By accepting our Terms of Service and activating a listing, you certify that you will follow your local laws and regulations.”
When you seek out property insurance, don’t forget to ask your insurance company how your specific city or geography might influence whether or not you can insure your property for Airbnb use.
In addition to complying with state and local laws, hosts should be aware that they might be subject to rental income taxes. To assist with U.S. tax compliance, Airbnb collects taxpayer information from hosts so they can provide an account of their earnings each year via 1099 and 1042 forms.
Airbnb has been the darling provides an online marketplace that connects people with rooms to share with people who need a place to stay. In the past, these types of services have been used largely by thrifty tourists looking for the cheapest place they can find in a particular city. Now, however, more and more business travelers and professionals are looking to Airbnb for a unique and memorable experience. Although there are certain risks associated with using a share economy system such as Airbnb, users can take steps to help mitigate any potential problems.