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Airbnb financially viable?

I came to realize recently how dependent I am on airbnb’s continued operation. If they were to fail, it would put many full-time hosts in a serious bind until a viable replacement appeared. I thought about this because of a delayed payment that concerns me.
Most of my airbnb payments are processed the day after the guests arrive, and I see the money in my bank account a couple of days later. However, I had a guest check in on June 22nd and their payment remained “Pending”. Furthermore, the payments for the following three guests were processed and deposited.
I contacted airbnb twice about this over email. No response except an email from July 5th:
"I’ve forwarded your inquiry to a member of my team who
can better assist you. Please feel free to add any additional
information to this email, and they’ll be in touch with you soon."
Eventually I found their support phone number and called, the representative said the case was still open.
I called a week later and a different representative said they would escalate the issue, but that they were dealing with many escalations. This gave me pause: were all these escalations due to the same issue?
Finally, this morning (July 27th, over a month after the stay began) I got the message that they payout will be sent.
On the one hand, it’s possible there’s some bug in their processing system and it really did take the work of a busy level-3 support engineer to figure out what’s going on and kickstart my payment process.
On the other hand, it’s also possible that airbnb is in dire financial straits and this “bug” is a way for them to retain a cash buffer. For example, if a small business is in difficulty, the owners will typically accept payment for work done while delaying payments to their employees or other creditors. If airbnb hits this “bug” once for every thousand bookings, that’s potentially millions of dollars in cash that they’re taking in but not paying out (on time). It’s not actually revenue for airbnb, since their revenue is strictly the “airbnb service fee” paid by hosts and guests. But the service fee is a fraction of the total amount of money that passes through airbnb. In a way they are a bank as much as a room listing service.
So please tell me I’m totally off base and paranoid, and this really is just a bug. I do believe that airbnb provides a unique and valuable service and in most cases has reasonably good customer service. Like Ebay, Uber, and a small handful of other companies, they have revolutionized a formerly labor-intensive process and generated a lot of revenue along the way, not just for themselves but for individuals like me and the other hosts on this forum, and they deserve kudos for that. I have nothing against Starwood, Marriott, Hilton, or any other multi-billion-dollar hospitality conglomerate, but I liken myself and my fellow hosts to the farmer selling peaches at the Wednesday farmer’s market, while they are the Monsantos and Con Agras of the world. In other words, I feel no guilt in taking some money from those corporate pockets and airbnb is the enabler.
But, having worked for several Silicon Valley startups, I have seen it before: a company that’s so focused on growth and cornering the market, that they lose the ability to actually pay the bills along the way. They wouldn’t be the first giant to come crashing down because of a severe cash flow problem.


You make a lot of valid points here - I am going to reply to the part about how long it took for you to get paid.

My concern is that as hosts, we do not get paid until after the guest arrives. A hotel does not allow check in until some kind of payment is rendered - usually the full amount. I realize that paying a host before check in could result in all kinds of scammers taking advantage of guests, but it leaves us on the hook if anything goes awry.

In your case, you took in a guest in good faith, expecting to be paid the next day as per the agreement you have with Airbnb. It bothers me that they are so slow to respond, when your guest has already come and gone and you have provided all the services that you agreed to.

I think that Airbnb should have a dedicated phone line / menu options / trained service reps for payment issues. To blandly tell you “eh, we’re thinking about it” is a cause for concern because you cannot retract the service that you have already provided and that they have agreed to pay you for.


I’m wondering if the delayed payments we sometimes experience are the result of a problem with the guest card. Isn’t it true that they just imprint the card at the time of booking and then don’t actually put the payment through until the day before traveling? Maybe the guest card guests declined or expires or something. Just wild speculation.

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Hi @wjquigs,

Interesting post. The possibility has occurred to me as well, but it doesn’t keep me awake at night.

I think Airbnb has done a good job of showing that a particular model of short term rental works well. Separately, none of their innovations are particularly new, surprising, or exciting, but together they’re compelling. To some extent this is putting old wine in new bottles, but many seem to think that there is also a significant value add. In a different space, Stack Exchange had done something similar for question/answer sites.

Given that this new model is out there, if Airbnb fails (and I don’t see why it would, but if course one never knows), then I suspect someone will come along to revive this new model. And if Airbnb fails, it will be through incompetent management. Their business model seems like a very profitable enterprise. It’s the best kind of capitalism. Make someone else do the work, and make it look like you are doing them a favor. A somewhat similar model prevails in academia. Oh, and if Airbnb is replaced one day, I hope their replacement hires some competent software engineers. :slight_smile:


You should have seen it at the beginning.

Hi Konacocnutz,
That is completely possible, especially if the reservation was made a long time in advance. They probably check if the amount is available at the time, but don’t take it. Later when they do take it, that card might not have enough available credit or some other issue.

I did have a reservation about a month ago where the guest made a Booking Request and I accepted, and then I got a status called Pending where there was some kind of note about the credit card not working. Even though I had accepted the reservation, it still expired after 24 hours (no penalty) and the guest had to come back a few days later when her credit card situation resolved and submit a new request. On my transactions page, the original request now shows as cancelled, even though it wasn’t a cancellation.

IIRC, the guest’s credit card had been hacked and she had to get a new one.

@konacoconutz guests are charged when they book (which is why bookings can be delayed), so unless someone is booking within a day or two of check in, i don’t think the delayed payment of hosts has anything to do with that.

Haha, are you comparing the “sharing economy” gatekeepers with academic publishing?

Airbnb has a huge cash reserve, from what I understand, but I will find a reference for that. The delay is probably due to the guest’s payment. The fact that this was still an issue when they arrived is very bad on Airbnb’s part. Airbnb has appalling customer service. I’m convinced that have twenty paid employees and the rest are volunteers.

That all said, everyone who is dependent on this income should really diversify. I am NOT convinced that Air will be in the peer-to-peer rental business in a few years. The are too many municipalities suing them and too many local governments world wide putting restrictions on short term rentals.


Hi @Lucy_R,

Well, actually, I’m comparing it with the average professor-student relationship. But academic publishing factors heavily into the equation, yes. I imagine any sufficiently unbiased academic will know what I mean.

Totally!! Ostensibly that is to protect the guest, but they must make millions every day on that.

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From the Wall Street Journal - 6/17/2015

“The forecasts also show Airbnb’s business becoming profitable, reaching $3 billion of earnings before interest, taxes, depreciation and amortization in 2020, according to these people. For the moment, the company is burning cash to expand, and forecasts an operating loss of about $150 million this year.”


Actually, I’m certain they charge the guest’s card (or bank) at the time of booking. I’ve stayed as an airbnb guest dozens of times and my card has always been charged when the booking is confirmed, long before I actually stay. It would only take a tiny fraction of guests booking on maxed credit cards, for example, to cause massive problems. Hotels don’t charge your card when you book because you’re not getting a key to your room unless you can pay at the time you arrive (this is why you frequently see a big “pending” charge on your card when you check into a hotel, which changes to your actual charge when you check out).

In other words, part of the reason this whole system is working is because airbnb collects your money and “holds” it for you until the guest checks in, so you don’t have to worry about attempting to collect payment after they’re already in your house.

Here’s an email I got from airbnb in a different case (which was resolved and my payment arrived on time):

The attempt to charge your guest, XXXX, for

the amount due for reservation XXXX from Jul 6 - 17, 2016 was
unsuccessful. The reservation is still active at this time, and we’ve
sent XXXX an email alert with a direct way to pay the balance.
If your guest successfully submits payment, we’ll send you a
confirmation email right away. If you have questions about the payment
problem, you can reach out to your guest. If your guest doesn’t successfully submit payment or if they cancel
the reservation before making the payment, Airbnb isn’t liable for
issuing your host payout. If you prefer to cancel the reservation, you
can cancel without penalty at any time before the trip begins. If the reservation has started and you’d like to cancel, please send us a note.
We appreciate your understanding.

Oh, no - the MINUTE I make a booking regardless of how far out, the money comes out of my account. Immediately.

Oh ok, I was misinformed. Have never traveled as a guest so wasn’t sure…maybe it is the security deposit charge that is an imprint.

Ok thanks, I didn’t know that. So if a guest books 6 months out, Airbnb has their money the whole time? Nice for them.


I have never checked my statements to make sure that Air is actually transferring funds into my bank account.

How frequent is it that Air neglects to make a deposit after say, a week? I can’t believe that in the instance of a problematic payment that they don’t have a message automatically sent to a host to alert them and acknowledge non-payment.

I think they hit the card immediately. I think it is only on ‘last minute’ rentals that this problem comes up.


I have a setting on the account that I use to send me an email when there is any activity and a note in my calendar to look for the deposits a day after they are due.

I could not read the full article because it was asking me to subscribe or log in. However, the portion you quoted is interesting!

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