Why It doesn't Pay to be a Superhost with Airbnb Anymore

[Angie183]

It doesn't pay to be a Superhost at Airbnb anymore. Hosting used to be a privilege and the idea was for a host to be present and to give guests from around the world a great experience, at a cheaper rate than a hotel. Now its just a ton of absentee landlords and building developers. And if you're a live-in host, it doesn't matter how many stars you get or how great your reviews are, you do not matter in a crises. Airbnb encouraged me through their algorithmic messages and nudges, to have a flexible cancellation policy. I did, and now I don't qualify for the 25% of any of my 4 overseas guests who had to cancel due to Covid-19.  But I see that those absentee hosts who had a strict cancellation - which is just stealing money, because a guest can only cancel within the first 48 hours! - do benefit; because  no matter what they get paid. This Covid-19 crises has brought sunlight to yet another greedy corporation. Brian Chesky pretends to be helping but as usual only the people who have multiple listings and are not true 'Hosts' can benefit. I had one guest who booked Feb 16, 2020 for a May 14-18 stay. He cancelled on March 19 because of Covid and the travel ban. I was told I didn't qualify for 25% because he didn't cancel before March 14. I sent the agent the updated version of "extenuating circumstances" from April 30 which reads: This policy will also apply retroactively, including any cancellations you may have had since March 14.

Then I'm told my cancellation policy was flexible so I still don't qualify. So what the ... !  Then I'm told "Since support payments depend on the amount owed to you by guests at the time of cancellation, those of you with Flexible and Moderate policies may be less likely to benefit from them." So, who exactly benefits from the $250M? Those who have a strict cancellation policy also get their money, in full, and under any circumstances. Those who have flexible policies don't benefit from a cancellation and now don't benefit in a crisis. It feels like yet another corporation making a fraudulent attempt to garner accolades for seemingly "doing the right thing". And the stupidity of it is, until it was announced I never expected anything. Now I'm irate at having to spend so much time getting the run around from agent to agent - with endless double talk, before someone finally came clean about my generous cancellation policy being my achilles heel. I hope Airbnb are not benefiting from any government stimulus, but I'm sure a lot of absentee landlords and building developers are. It just doesn't pay to be a real "Superhost" on Airbnb anymore. Thank you and Stay Safe!

[Rodney11]

@Angie183 I am very sorry to hear how much this EC decision by AirBnB is hurting you. I agree that AirBnB has bungled the handling of compensation. 

I am a Host who has always had a Strict cancellation policy. I do not feel I am "stealing" money from guests because my listing clearly indicates my cancellation policy, so guests know what they are getting into when they book with me. Had AirBnB just left Hosts' cancellation policies in place, I would still be getting 50% of the revenue for my guests' cancelled bookings (instead of the 25% of 50% = 12.5% AirBnB is now offering) and you would still be getting, well, $0. So one could argue that the Hosts with Stirct policies are actually the ones who are being punished the most financially by AirBnB's COVID-19 blanket cancellation policy. Being a Superhost (which I am) has absolutely zero impact on whether or not you are getting the 25% compensation. AirBnB has created another program where they will invite Superhosts to apply for a $5,000 relief grant, but only about 1% of Superhosts will qualify for this program. For the record, I reached out to all my booked guests and requested they cancel their bookings in order to get a full refund; I believe this was the ethical thing to do.

AirBnB argues that a having a Flexible policy allows Hosts to attract more guests vs. a Strict policy. The data I have seen (specifically on AirDNA, an excellent resource for researching global and local AirBnB trends), supports this argument only in very specific markets. It would seem the main reason AirBnB encourages a Flexible policy is it allows the AirBnB platform to compete against hotels who offer generous cancellation policies. This allows AirBnB to attract travelers away from hotel booking sites to the AirBnB platform, resulting (theoretically at least) in a larger overall guest pool that ultimately benefits all Hosts.

I chose a Strict policy from the get go because I thought it made much better business sense to protect my revenue stream than to potentially secure more bookings with a Flexible policy. I've always approached AirBnB, and any booking platform for that matter, with the following mindset:

AirBnB = on line retailer
Guests = customer

Hosts = product

AirBnB, like most on line retailers, is going to refund the customer 100% when they are not satisfied with the product, even if it has nothing to do with you as a Host. 

The only thing you can do as a Host is protect your "product's" value. For me that means choosing a Strict cancellation policy, setting my pricing 10-15% above AirBnB's recommended minimum, using smart pricing, make my property available through other channels, make my property convertible to other uses like LTR, and put away 10% of my revenue in a contingency fund in case of a STR market downturn.

Having said that, all of the points above regarding cancellation policies apply to normal market conditions. COVID-19 is a total and utter dumpster fire, which has now spread to the house, the garage and all the neighbours' properties. AirBnB should be trying to compensate all Hosts affected by their sweeping guest COVID cancellation policy, regardless of Hosts' regular cancellation policies.

On a Machiavellian level, AirBnB benefits from pitting one class of Host against another, this lessens the potential for Hosts to launch a mass arbitration action against them. Personally, I think it best for all Hosts to have a unified voice to tell AirBnB they need to do better.

The ugly reality however is that right now AirBnB is struggling to save their brand. Guests are way more important to them than Hosts. Guests are AirBnB's main revenue stream; they are trying to keep guests happy so they return to AirBnB when they can travel again. AirBnB can always find more Hosts.

I hope the above helps to give you a bit of context around the situation, and about Hosts with Strict policies. Mostly though I hope you are staying healthy and safe during these stressful times.

[Huma0]

@Rodney11  I agree with you 100%.

@Angie183 

In regards to cancellation policies, I don't see how having a Strict policy is stealing from the guest. They sign up to it and no one is forcing them to do that. Should something serious come up that is beyond their control, well, that is supposedly what the extenuating circumstances policy is there for.

I started out with a moderate policy and had that in place for some time, but was getting several last minute cancellations during high season. What irritated me most was that those guests were waiting right up until the 5 day deadline to cancel, even if they had booked months before, with no concern at all about the impact on the host.

None of them had important reasons for cancelling. One even cancelled because I said I could not store his luggage for him for two days after check out (I was not going to be here for him to collect it due to work commitments but sent him links to several very cheap luggage services). Even though this had been stated to him when he booked, he had apparently expected to wear me down into agreeing and, when he couldn't, waited until minutes before the full refund deadline and then cancelled. I suspect though that most of these cancelled bookings were for the purpose of visa applications.

So, I switched to Strict and never looked back. I like the 48 hour grace period. It allows me to remind the guest to make sure they read the full listing and house rules asap as they have 48 hours to cancel penalty free. We all know a lot of guests don't read much of the listing, let alone check the cancellation policy. This urges them not only to make sure the listing is a good fit for them (if they haven't bothered to before booking, which is often the case) but also alerts them to the cancellation policy. Then everything is crystal clear and they can make an informed decision.

I'm really not sure how that can be classified as 'theft'.

[Iris422]

I had a guest negotiate a three week stay in June for Aug 9-31st, including a reduction in my daily rent.  I asked them are you sure your plans are firm - they said yes, so I gave them a reduction in my normal fee.  Today, they cancelled with no comments or explanation.  I had two inquiries for the same time and could have booked two full months!

[David3267]

@Rodney11 Hi, one of the best, well reasoned summaries I have read for a long time on any of these boards!

[Paul60]

Being a super host is the equivalent of getting a gold star when you're 6 years old.  Im sure Airbnb are having a great laugh as how they're treating hosts like suckers !!

[Sarah977]

@Rodney11  "Had AirBnB just left Hosts' cancellation policies in place, I would still be getting 50% of the revenue for my guests' cancelled bookings (instead of the 25% of 50% = 12.5% AirBnB is now offering) and you would still be getting, well, $0. So one could argue that the Hosts with Stirct policies are actually the ones who are being punished the most financially by AirBnB's COVID-19 blanket cancellation policy."

I know a lot of those with strict cancellation policies take this view. What it doesn't take into account is that all these COVID cancellations are not representative of what normally happens, even when a host has a moderate or flexible policy. I have been hosting for 3 and a half years, have always had a moderate policy, and only once in all that time has a guest cancelled their booking anytime near the check-in date. So I have never had a booking where I received $0 that was too close to check-in that I couldn't rebook it.

Those with strict policies seem to assume that hosts with flexible or moderate policies have guests cancelling last minute, leaving the host with $0, on a regular basis. Some hosts may, but it certainly hasn't been my experience.

[Rodney11]

I agree with you 100% @Sarah977 , I was simply trying to point out to @Angie183 that saying Hosts with Strict policies are stealing from their guests is the flip side of the same coin where Hosts with Moderate or Flexible policies are told they deserve to get nothing because they made a poor business decision to go with these policies. Only AirBnB benefits by Hosts arguing amongst themselves regarding these matters.

I hoped I had cleared up any confusion on where I stand on the matter by including the following in my last post: 

"Having said that, all of the points above regarding cancellation policies apply to normal market conditions. COVID-19 is a total and utter dumpster fire, which has now spread to the house, the garage and all the neighbours' properties. AirBnB should be trying to compensate all Hosts affected by their sweeping guest COVID cancellation policy, regardless of Hosts' regular cancellation policies."

I've read enough of your posts to feel like we are on the same page on this issue. At least I hope so!

[Sarah977]

@Rodney11  Yes, we are on the same page. Your posts on all of this have been incredibly articulate, well-reasoned and fair.

I picked that part out, though, because there have been many hosts with Strict policies saying exactly that, without the follow-up. That those with moderate or flexible policies don't deserve compensation because we chose those policies so that we could get more bookings, so that was the trade-off. I chose a moderate policy for a number of reasons, but getting more bookings never entered into it- it never even occurred to me when I started hosting and chose that policy that it could result in more bookings, and in fact, I don't think it does, as evidenced by how many posts I've read by guests on this forum over the years (pre-CoVID) who never even read the cancellation policy they agreed to and then are shocked and outraged when they find they are only due back 50% when they cancel.

[Susan17]

@Sarah977

As you know, I've been studying the markets for a very long time, and you've seen many of the results of the "Top 50 listings" surveys that I posted on here, all of which totally confirm your suspicions that hosts who chose flexible or moderate didn't, in fact, automatically receive more bookings than those with strict policies. They may now (briefly), with this new push for hosts to adapt super-flexible policies, but they certainly never did before.

It's just as much a carefully-crafted fallacy as the myth that superhosts received more bookings, when my studies invariably showed that fewer than 20- 25% of the top 50 listings in any market were hosted by superhosts. 

[Sarah977]

@Susan17  It's always nice to have one's suspicions confirmed :-))  I can certainly verify that my Superhost status, my 5* rating, and my moderate cancellations policy has never contirbuted to a high search ranking. Plenty of non-Superhosts and those with lower ratings crowding me out. Because I don't use Instant Book.

[Jessica-and-Henry0]

@Angie183 

The best thing I got out of being a superhost was the badge next to my profile photo, which is equal to a gold star or smiley face stamp on your homework in Kindergarten like @Paul60 says. 

A lot of my guests said they didn't really notice whether I was a superhost or not - they booked with me based on my listing description AND prior communication, while referring to reviews from other guests. I've been a host for 3yrs but hosted a lot of longer stays (mostly exchange students, 3~4 stays a year) so was never able to meet the superhost requirement for # of stays even with 80% occupancy until last year when the requirements changed to include long-term stay hosts like myself. 

I believe a good host is a good host regardless of whether Airbnb recognizes them as a superhost. People have different ideas about what hosting entails, and imo, it's up to the individual to decide if they are up to it, if the time/effort invested into hosting is worth it. 

I don't particularly like Airbnb because of the way they've always treated hosts (even before the covid-19 mess), how they often break their own rules and their condescending tone in their communications.  But if at the end of this mess, if *hosting* is still worth it, then I probably will continue to host guests. And I'll continue to be the best host I can regardless of whether Airbnb gives me a badge or not. I don't need them to pat me on the back to know I'm doing well. The extra income from hosting and guests telling me thank you for a great stay is what REALLY matters. 

[Susan17]

@Angie183 

It never did pay to be a superhost. From the day the SH programme was introduced, it was nothing more than a behaviour modification/gamification tool - albeit a very effective one that had everyone tying themselves in knots, obediently chasing a worthless, divisive, virtual "badge of honour" 

In late 2012, Airbnb headhunted Douglas Atkin as Global Head of Community. Atkin is the author of a book called "The Culting of Brands - How To Turn your Customers into True Believers", and was the creator of "The Glue Project", a venture "dedicated to helping people make communities, and the loyalty that results"

He spend years studying how cults work, the techniques they use to suck people in and brainwash them into being blindly devoted, subservient and loyal to the cult leaders, and the psychology of how cults manipulate and control their members into doing their bidding. Atkin's area of expertise was how to use those same techniques in the business and corporate world, in order to make the minions similarly devoted/subservient to the global corporations they "serve"

Airbnb has been using every trick in the culting book on its hosts since around the end of 2013/early 2014, including restructuring the entire ratings, review and Superhost programme as a supposed "reward" system, when in actual fact, it's a punitive, abusive system specifically designed to penalise, manipulate and control hosts and their behaviour.

It works on the basis of something called the "Commitment Curve", which is structured to reel people in initially with a very low barrier to entry, then ply them with very quick "rewards", in order to get them hooked as quickly as possible. (such as, the newbie search boost, designed to ensure new hosts get lots of bookings straight away so they're locked in and beholden to the platform from Day 1. It's also why hosts can "achieve" superhost status after just 10 single night bookings and a handful of reviews. And even why you can reach "Level 10" contributor in the Community Centre in about 5 minutes flat). It's all about massaging people's egos and making them feel "special", so that they'll feel so enamoured by you that they'll happily and greatefully do whatever you demand of them. 

Then, once you have the targets hooked, the strategy is to ramp up the pressure on them exponentially, with bigger and bigger "asks", and rapidly increase the level of demands on them as time goes on. (For example, gradually stripping people of their rights over their own homes and businesses, while making them jump through near-impossible hoops to please you and reach almost unattainable targets (the "f*ck-off metric", as it's known internally) - such as making Superhost status achievable now only at 4.8 overall rating, instead of the previous 80% 5 star reviews, while sending relentless "you need to do better" emails to hosts when they "only" get 4 star ratings)

The theory behind all of this - and the fundamental principle on which Airbnb has been operating for several years now - is that the more you demand of your subjects, the more loyalty, devotion and dependency you'll squeeze out of them, and the more you can manipulate them into doing your dirty work for you. The ultimate goal, of course, is to mobilise the troops to get out there fighting your corner for you (such as, using gullible hosts as "frontmen" and mouthpieces with city councils, politicians, media, local authorities etc). Unfortunately for Airbnb though, the vast majority of independent hosts and homesharers are now waking up to the fact that they're being used and abused by the company, and are finally realising that small hosts fighting Airbnb's battles, is like turkeys voting for Christmas. 

Douglas Atkin quietly parted ways with the company in 2017, citing "other interests". Perhaps he felt that they'd taken his ideas just a little too far

[Iris422]

I love this. Thanks for your detailed explanation.  I'm dealing with last minute cancellations and someone who saw a cobweb by the water heater in an otherwise pristine, cleanly home who dropped me from a 5 to 4 star rating.  And, when I say clean I cover everything!  I use the fingerprint smudge test; I am on my knees cleaning the toilet, tub, and floor.  All knobs are cleaned with clorox wipes, the outdoor table is cleaned.  

And, to accommodate requests, I have been open to options.  Never again.  I'm not getting roped into reducing my fees, blocking out three weeks, and then having it cancelled at the last minute.  And, then they don't have the decency to even provide an explanation of why they cancelled.  

I also am exploring options to remove myself from ABNB

[Sarah977]

@Jessica-and-Henry0  Yep. I've never strived for that Superhost badge- not only was I totally unaware of the whole Superhost thing when I first started hosting (also just over 3 years), therefore taken aback when I first got that "Congratulations! You're a Superhost!" email, hanging onto it is pretty much dependent on getting good guests who leave 5* reviews. And that can have nothing to do with someone's hosting prowess, but just the luck of the draw in not getting some jerky guests who leave a 2* review because you asked them not to leave their dirty socks on the shared bathroom floor. The other requirements are mostly easy- don't cancel reservations and respond to inquiries and requests within 24 hours. 

The number of stays is a tricky one, though, and I've usually just squeaked by with the minimum, or a few over. For me, that's because my viable booking season is only about 5-6 months long, and most of my guests stay an average of 10 days, some 2 weeks. So unless Airbnb decides to not count number of stays for the July assessment, you won't see that ugly badge pasted over my profile photo anymore :-))