Airbnb’s name may have been inspired by the term “air mattress B&B,” but the company has come a long way since it opened its doors for business in 2008. As Investopedia reports, it now connects people seeking accommodations with those willing to provide them in 192 countries and is valued at $25.5 billion. Today, Airbnb is actually worth more than the Hyatt Hotels Corporation. Is it a good choice for you? Here are five things you should know before you sign up with Airbnb as a guest or a host.

1. The accommodations listed on Airbnb are not hotels.

A multitude of travel sites allow people to search for the best price for hotel rooms, but Airbnb is different. It provides an online marketplace for travelers who are looking for a place to stay to connect with hosts who have a space they are willing to rent. Accommodations vary wildly in terms of price, amenities and quality, ranging from simple shared rooms to impressive castles. The hosts are not hoteliers, and the spaces offered are varied and unique. This makes for a travel experience that is far different from staying in a traditional hotel, something that many Airbnb users consider a plus.

2. All financial transactions must go through Airbnb.

When rentals are arranged through Airbnb, money does change hands, but the funds are never passed directly from guest to host or vice versa. Whether it is the cost of a rental, a request for a refund or a claim for property damage, all financial transactions are required to go through Airbnb. Terms for both guests and hosts are made clear, and the company provides a trusted platform to collect and disperse payments. If there is a dispute, Airbnb acts as a mediator to settle it.

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3. Airbnb is not legal everywhere.

In some areas, state and local laws restrict or flatly prohibit short-term rentals, and having paying guests stay for a few days in these areas can result in stiff penalties. While Airbnb does warn prospective hosts of this potential problem, it makes it clear that all would-be hosts who place a listing on the website are expected to follow the laws of their location. Ultimately, the responsibility to ensure that their activities are legally acceptable in their respective areas rests on the shoulders of the hosts.

4. Background checks are not included.

Airbnb does not conduct background checks on either guests or hosts, so all parties should always proceed with caution. The company does offer a Verified ID program, which involves either providing an image of a government-issued identification document like a passport or driver’s license or answering authentication questions. Guests have the option of limiting their search for accommodations to spaces offered by hosts with Verified IDs; hosts can require guests to complete the Verified ID program before they accept the booking. However, it is important to note that a Verified ID is not an endorsement.

5. Cancellation policies vary.

When creating a listing on Airbnb, hosts set the terms, and they can choose one of a handful of cancellation policies. The cancellation policy in place for a listing can have a major effect on any refund, so prospective guests should always check this carefully before booking. Listings with the Flexible cancellation policy can be canceled up to 24 hours prior to a guest’s expected arrival. When the Moderate policy is in effect, users must cancel five days before their arrival date. The Strict policy requires a week’s notice. Bookings that extend for four weeks or more may fall under a special Long Term cancellation policy.

Staying in accommodations located through Airbnb can provide travelers with a unique perspective and acting as a host creates the opportunity for interactions with people from different countries and cultures. Using Airbnb can be a fun, affordable alternative to traditional hotels as long as both guests and hosts use good judgement and pay attention to the terms of service.