Airbnb drives hosts elsewhere with expensive pandemic policies

Lorraine Luongo, who filed for arbitration against Airbnb seeking to recover the money she lost, in Myrtle Beach, SC on Jan.31, 2021. Last year when the pandemic hit and Airbnb allowed customers to cancel reservations with full refunds, she lost $ 25,000 in overnight reservations. (Leslie Ryann McKellar / The New York Times)

In six years, Lorraine Luongo has gone from renting a spare bedroom at her Myrtle Beach, SC home to owning and managing 10 properties she’s listed on Airbnb. Last year, when the pandemic struck and Airbnb allowed customers to cancel reservations with a full refund, it lost $ 25,000 in reservations overnight. The payments Airbnb was then offering to concession hosts were “peanuts,” she said. Luongo realized her business was too dependent on Airbnb, she said. So she created listings on competing sites like VRBO and Golightly, a site for female travelers, and plans to build a website to deal directly with customers. In November, she filed an arbitration claim against Airbnb for breach of contract, seeking to recover the money she lost. “They are supposed to value the hosts, but everything is more in favor of the guests,” said Luongo, 45. Luongo is just one of Airbnb’s rental operators who are increasingly disappointed with the company. While there have always been tensions between Airbnb and its 4 million hosts globally, a wedge has widened in the pandemic after the company changed its cancellation policy and hosts saw the little power they had. For some lessors, the relationship is irretrievably broken. Hundreds of people with more than 10,000 listings are taking legal action against Airbnb, according to Bryant Greening, a lawyer at LegalRideshare, the Chicago firm that is helping Luongo with his claim. Others try to get around Airbnb by booking customers directly. Last year, direct bookings accounted for 25% of bookings among rental managers surveyed by Hostfully, a travel software company, up from 19% in 2019. “Much of the damage is permanent,” said Jasper Ribbers, who runs Get Paid for Your Pad, a company in Barcelona, ​​Spain that advises short-term rental operators. “The trust is kind of gone.” Fracking comes at a crucial time for Airbnb. The company, which went public in December and immediately surpassed $ 100 billion in value, faces high expectations as its share price rose further. Airbnb plans to release its first results as a public company on Thursday. This puts the San Francisco company under pressure to show off a thriving business – cutting fees when people book properties that host a listing on its site – even as new coronavirus outbreaks curtail travel. In an interview on the day of Airbnb’s initial public offering, Brian Chesky, CEO, acknowledged the tensions with the hosts, but said the relationship has improved over the past year. “We have a lot of work to do and frankly they are still suffering,” he said. Catherine Powell, head of accommodation at Airbnb, said hosts’ views on their relationship with the company improved by 17% between January 2020 and last month. “Our relationship with the hosts is extremely important,” she said. “Our hosts are what powers Airbnb.”
When $ 77,000 is gone
Airbnb hosts are tracing many of their issues with the company to March 14, three days after the World Health Organization declared the pandemic. It was at this point that Airbnb adopted an “extenuating circumstances policy”. The change has angered many rental operators, who previously had chosen their own cancellation policies, including a non-refundable option. The new policy allowed guests to cancel with a full refund, overriding the preferences of some hosts. Many saw their livelihoods disappear overnight. Darik Eaton, who managed 50 properties in Seattle, laid off 10 employees after the change and reconfigured his business to be “lean,” including abandoning some of the properties he managed, he said.
“I saw $ 77,000 disappear from my bank account in one day,” Eaton said. At the end of March, Chesky apologized to the hosts for the manner in which the decision had been communicated. “We’ve heard from you and we know we could have been better partners,” he said in a video. The company has set up a $ 250 million fund to cover some of the cancellation fees and a $ 10 million relief fund. But for some, the money was just a gesture. Benjamin Vail, 34, who manages 70 Airbnb listings in Columbus, Ohio, said that while the properties he manages lost about $ 70,000 in bookings, he received a check from the company for $ 3,211. Other hosts have circulated images of checks with amounts like $ 2 and $ 4, he said. The hosts began to share other grievances. While Airbnb’s terms ensure that it will pay for damages if guests ruin a property, some hosts have said it is difficult to charge the company. They also complained about its customer service, inconsistent enforcement of pandemic policies, and elaborate cleaning rules for COVID-19 that included shampooing carpets and washing baseboards between each guest. In July, Elizabeth Goldreich, an Airbnb host in Aspen, Colo., Lost $ 11,500 after a guest canceled a three-week stay at her vacation home at the last minute. Goldreich, 55, said the booking, made after the pandemic began, should not have resulted in a refund. The situation shattered his confidence in the platform. “I was a real, loyal fan, until I was thrown under the bus,” she said.
Dozens of hosts have retained LegalRideshare, which has opened an affiliate, LegalBnb, to file arbitration claims against Airbnb for breach of contracts, Greening said. (Airbnb’s terms require hosts to make legal claims individually through arbitration.) LegalBnb said Airbnb’s extenuating circumstances policy does not include pandemics. “Many of these hosts were absolutely willing to be flexible with their customers,” said Greening. “Airbnb took that power away from the host and therefore took money out of their pocket.” Another host, Anthony Farmer, filed a class action proposal against Airbnb in U.S. District Court for the Northern District of California in November. The lawsuit, which attempts to bypass Airbnb’s arbitration terms, accuses the company of violating its contract and fiduciary duty and of violating consumer protection laws. Christopher Nulty, a spokesperson for Airbnb, said the company’s policy prioritizes public health and safety, which would ultimately help hosts “by maintaining strong customer loyalty and high demand for Airbnb ads ”. He said the Farmer costume was baseless.
‘Back to our roots’
In May, Airbnb announced it would go back “to our roots” with a focus on “the ordinary people who host their homes.” This position has commercial advantages. Professional landlords with lots of ads may appear to be taking homes and turning neighborhoods into tourist areas, pushing politicians and neighborhood associations to impose regulations. A family renting a spare room often appears less threatening. In a financial prospectus in November, Airbnb said 90% of its hosts were “individual hosts,” defined as those who create their ads directly on the site instead of using specialized software to sign up. But according to Transparent, a software provider for short-term rental operators, only 37% of Airbnb’s listings were managed by people who own property in September. About half of the listings were managed by hosts of 2 to 20 properties and 14% by hosts of 21 or more. So when Airbnb focused on individual hosts, it annoyed its business hosts even more. “Their business relies on professional hosts, in a way, but they don’t often say that,” said Vail, the Columbus operator. “They don’t want this message to make headlines.” Nulty said Airbnb’s focus on “primary hosts” has not come at the expense of business hosts. He said business hosts were represented on its Host Advisory Board, a group the company formed in October so hosts could meet with Airbnb executives.
#BookDirect
A movement towards “direct bookings” has now gained momentum. There’s a lecture series (The Book Direct Show), a hashtag (#bookdirect) and even a promotional holiday (#BookDirect Guest Education Day on February 3). “People are starting to think, ‘Do I really want to be completely dependent on Airbnb? I don’t want to relive what happened in March again, ”Ribbers said. Kwesi Steele, CEO of Tokeet, a provider of software to help short-term rental operators manage their listings, said many customers have started asking for ways to build their own websites, especially those with customers. faithful who realized that they did not need an intermediary. like Airbnb. At one point during the summer, the number of direct bookings from Tokeet customers was as high as those going through Airbnb, Booking.com and VRBO, he said. Tokeet has therefore accelerated the development of a product, Webready, which allows web hosts to create their own websites. He made his debut in November. “This is the fastest growing product we’ve built in terms of adoption,” Steele said, with over 1,500 hosts enrolled. When Airbnb went public in December, it set aside 9 million shares for hosts to buy at the offer price. Those who participated more than doubled their money in a day. But even the hosts who participated, like Goldreich, said they weren’t planning to stick with Airbnb alone. Goldreich said she signed up for VRBO. “I used to think they had my back and were a partner,” she says. “I don’t feel that anymore.”

Lorraine Luongo, who filed an arbitration claim against Airbnb seeking to recover the money she lost, in Myrtle Beach, SC on January 31, 2021. Last year when the pandemic struck and Airbnb allowed customers to cancel reservations with full refunds, she lost $ 25,000 in overnight reservations. (Leslie Ryann McKellar / The New York Times)

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