@Felicia58. One of the reasons the payout to hosts does not happen until the guest checks in is due to Airbnb's Guest Refund Policy. Under this policy, if a guest arrives to a listing and it is not clean or is not as described in the listing details (for example a hot tub or Wifi is promised and neither exist), then Airbnb will give the guest a full refund.
This gives guests the confidence to book with us "Mom and Pop" individuals rather than a hotel.
Guests have 24 hours to make a complaint to Airbnb after they check in. No sense paying the host prior to the reservation date and then take it back if the listing is not as described. And who knows? Maybe the host has already spent the money and is now nowhere to be found.
Concerning Airbnb holding onto the payment even if the reservation is far in the future. When one books a hotel or a seat on flight, it is common practice for the traveller to pay for the reservation in advance. One might believe that Airbnb is making money on the use of these funds in the meantime. At today's interest rates, I seriously doubt that this is a money making scheme especially considering all the expenses incurred when a host cancels a reservation (guests can get an additonal credit for host cancellations) as well as all the Travel Credits Airbnb gives out for referrals. Not to mention any advertising and system support that hopefully drives guests to our listings.
I totally understand your point of view, but if you look at the situation from Airbnb's point of view, you might see the logic of why they do what they do.
These links might be helpful:
https://www.airbnb.com/help/article/544/what-is-airbnb-s-guest-refund-policy
https://www.airbnb.com/help/article/950/i-received-an-additional-credit-after-my-host-canceled--how-...