The Inner Workings of Airbnb: What They Won’t Tell You

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While I am still waiting for an outcome on my own host nightmare – 35 days and counting – I thought I would share this bit of information with all you wonderful people here on Airbnb Hell. I’ve been perusing the stories of hosts and guests alike. It’s all very sad and alarming as to the rate that Airbnb is burning bridges with hosts and guests. Something that everyone needs to understand is how a company platform like Airbnb works. There is this illusion that they make all their money when a host offers his home and a guest rents it. While Airbnb makes a tidy sum from the 3% they take from the host and the 18% (I have heard) from the guest, that is not their real moneymaker.

1. 21% of the money is collected from the actual physical ‘rental’ of a property.

2. Interest on money held. Airbnb collects all payments at booking (sometimes months in advance) and sits on it, only release it to hosts after the guest checks in. Even if these funds were collected and sat on during just one overnight period alone, the interest that is compounding is almost staggering to think about.

3. Negotiated credit card processing rate. While hosts and guests are paying a certain advertised percentage rate for credit card processing, this rate has been negotiated (behind the scenes) with the credit card company. Airbnb collects their advertised rate from hosts and guests and then pays their ‘negotiated’ rate to the credit card company. Maybe 0.017% doesn’t seem like much, but when you are processing hundreds of thousands (or possibly more) dollars a day it adds up very quickly in Airbnb’s pockets.

4. Selling your information to third parties. This is Airbnb’s goldmine. This is why they want access to all your private and pertinent information. This is not to protect the hosts. Platforms already exist where Airbnb could act as merely a ‘Yellow Pages’, connecting hosts and guests alike. It would then be up to hosts to vet guests of their own accord. However, that is not where the money is. Airbnb wants all your information because that makes you more valuable.

Your age? They have lists for that.

Your gender? They have lists for that.

Your Facebook friends? Yes, they have lists for that too.

You are a potential goldmine and you don’t even know it. Everyday your information is sold for a huge profit to all the ‘marketers’ out there. Now don’t worry: they aren’t selling your actual name and then all your personal information attached to it (at least we don’t believe they are – because that crosses into illegal territory). However, with that having been said, I personally do not trust Airbnb and that could be happening while you are reading this. You and all the others like you of the same age, gender, nationality, etc. are being grouped together and being sold off like cattle at an auction barn. This is how you keep getting all that wonderful advertising ‘tailored just for you’ – because the marketers already know you because they bought your information.

You can get angry when they screw you over hosting and pull your house from their database, or as a guest who has rented a home that doesn’t exist and is sitting in the rain in the middle of the night trying to call the help center and no one is home. To really make a difference and an impact is to let your friends and family know not to do business with them and if they choose to do so anyway, don’t let them have access to your or any of your friends’ and family’s information. Don’t tie your Facebook account or any other list to verifications. If you are truly done with Airbnb, go in and delete your account from their database. Deleting an account only deletes it from us, the public; Airbnb still has all your information. What you need to do is go into your account and make changes a few days before. Delete out as much information as you can from your profile. Don’t just make fake changes. If you change your birthday, you have still given them an opportunity to put you on a list. Remember they are there for quantity, not quality.; they don’t care how much of the information that they sell is accurate. Let that be a problem of the marketers. Remove what you can. Then a few days later, delete your account. Now all that is left on their end is the scant bit of information you left them with days earlier. Remember people: the only way to eat an elephant is ‘one bite at a time’. Now, where did I lay that fork…? Good luck out there friends.

Posted in Airbnb Host Stories and tagged , , , , , .

6 Comments

  1. Yes, Airbnb Guests trashed my home – that is all laid out in a Host story here.
    I waited 40 days (and repeated agony from far too many customer ‘care’ reps of Airbnb) for a resolution and we (Airbnb & I) have finally just come to a settlement yesterday. Was I made whole, no – but, it became VERY clear to me that I could continue on fighting with Airbnb on a daily basis, take the matter to court myself or just settle out with Airbnb. I chose the latter, as I have other things in my life to do besides spend the next 30 yrs fighting to be reimbursed for all my losses.

    One of the terms of my settlement was to NOT discuss the terms ‘of the settlement’ with any parties outside the settlement agreement.

    So with this – suffice it to say that I have learned a VERY valuable lesson as a Host (and also as a would-be Guest – once I began to dig very deeply into the inner workings of Airbnb, discovered Airbnbhell & met many other damaged & disgruntled Hosts & Guests alike) that in the larger scheme of things I got off very cheaply for what could have & might have been (meaning future NEGATIVE dealings with Airbnb Guests.) I have severed my account with Airbnb and unfortunately (for the GOOD Guests of Airbnb) I will not be taking on anymore of Airbnb bookings. The risk vs reward is far too great – I was a Host that was burned by a Guest and then in turn ultimately burned by Airbnb. The claim process, the tightly written terms/policy agreement, the outcome – all are not worth the pain I had to endure when I became one of the “that rarely happens to a host”.

    I hope those that still choose to continue on with Airbnb (believing that the world is all rainbows & sunshine) never have to go through a ‘nightmare’ Guest (or Host) – but all I can tell you is this: My nightmare Guest is still out there on the Airbnb platform – even after I asked to have her banned from the site. My review of her was deleted by Airbnb at the onset – when I mentioned that I had to contact the Resolution Center about her damages. So if you are Hosting – She could very well be YOUR next guest, and then may god bless you…

  2. I see the photos I read your report I’m not putting it all together? some airbnb renter screwed up your property? Is that it? Your waiting on the resolution center to come up with a claim? Sprry I just saw the photos.

  3. David –
    Your words:

    “1. Nothing new about the fees all OTA’s have a similar business model.
    2. All companies negotiate credit card rates, nothing secret here it’s just normal business practices.”
    3. Still BS: I did not write it – Airbnb did
    And there is not a DARN thing illegal about it – nor I have I ever said as such.
    It’s done across the country everyday, people sign up – mostly are okay with it (myself included) – So you can stop with the “I’m trying to slander Aibnb”

    “Member” means a person who completes Airbnb’s account registration process, including but not limited to Hosts and Guests, as described under “Account Registration” below.

    “Member Content” means all Content that a Member posts, uploads, publishes, submits, transmits, or includes in their Listing, Member profile or Airbnb promotional campaign to be made available through the Site, Application or Services.

    “By making available any Member Content on or through the Site, Application, Services, or through Airbnb promotional campaigns, you hereby grant to Airbnb a worldwide, irrevocable, perpetual (or for the term of the protection), non-exclusive, transferable, royalty-free license, with the right to sublicense, to use, view, copy, adapt, translate, modify, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast, access, view, and otherwise exploit such Member Content on, through, by means of or to promote or market the Site, Application and Services. Airbnb does not claim any ownership rights in any such Member Content and nothing in these Terms will be deemed to restrict any rights that you may have to use and exploit any such Member Content.”

  4. First off I never said Airbnb cornered the market on any of these moneymaking ideas. I said ‘How they make their money” for those that do not know this and trust me – there are plenty of folks that don’t know this. Have I discovered some great hidden ‘secret’? No- nor did I claim that. Airbnb did NOT invent the wheel. But they are not going to make any commercials about this information either.

    Furthermore I never said they are selling PRIVATE data. Read it again my friend and please don’t put words in my mouth I didn’t say. And then go to Airbnb’s fine print – all that stuff you don’t read when you sign up for an account. You give authorization to release information to 3rd parties at their discretion. What exactly do you think a 3rd party is?? The fact that someone is a 27 yr old female in a certain demographic area is NOT private information. Are FB lists of friends being sold off to the highest bidder- of course not. That is not how marketing lists are compiled.

    And if you don’t believe that happens every single day with just about every loyalty program, membership, etc that you sign up for then I feel sorry for you. My employer alone spends a ton of money every year buying totally legal marketing lists of this very nature.

    The whole purpose of this post was for those who are disgruntled with Airbnb as a whole that want to cut ties and does NOT want Airbnb to make any further monies from them or because if them.

  5. What a load of rubbish. 1. Nothing new about the fees all OTA’s have a similar business model. 2. All companies negotiate credit card rates, nothing secret here it’s just normal business practices. 3. Selling private data? Do you have proof of this because I call your claim BS!

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