The Serious Hidden Risks of Hosting with AirBnB

[Tom-And-Rene0]

We have been with AirBnB for several years now with our dozen or so properties, and for the first few years we felt they were a real improvement on other similar companies.  In the past few months though, we have been hit by unexpected actions by AirBnB, and it is important that other hosts realise there are actually real risks in hosting through AirBnB that they may not be aware of:

1) AirBnB  can cancel any booking, at any time, even after the date of check-in, and return 100% of the money to the guests irrespective of whatever cancellation policy you have on AirBnB and with no discussion with you as the host. 

2) AirBnB can just stop paying out money to you, even after guests have checked out and you as a host have incurred all the costs of having had them stay.  

In the past few months AirBnB has carried out both of these actions against us, so let me explain more how AirBnB justifies this.

The first action is able to be taken by AirBnB under the "Extenuating Circumstances" policy which allows AirBnB to cancel any booking with zero notice and zero discussion with hosts for a legitimate reason.  The first that hosts will know about an "Extenuating Circumstances" claim is when they receive an email from AirBnB saying the booking has been cancelled and the guests repaid.   

For us we only found out after the guests had physically failed to turn up at the property and after we had already purchased food for the guests and hired staff (the booking included breakfast and housekeeping/cook).  This was on a high season week that we could have filled several times over.  While the guests did have a fully legitimate and unfortunate reason to cancel (a death of an elderly family relative, although not one of the party travelling) there was no notice to us by either the guests, or AirBnB, and no willingness to even consider other options such as claiming on travel insurance, or deferring the stay to a later date - just an obligation for the full 100% refund from us as the host.  

The issue for us is a process whereby AirBnB sets itself up as both judge and jury; does not allow the hosts to provide any counter-evidence; and does not even inform the hosts that a claim has been made until after it has decided its ruling.  

This process is just wrong, and that is before you even consider whether it is right for a host to have to pay all the costs preparing a property, but then, through no fault of their own, receive none of the expected income . 

This policy also fuels moral hazard as well.  Why should a guest ever purchase travel insurance for a booking through AirBnB?  Instead they can call up AirBnB and get their money refunded anyway and avoid the hassle of an actual insurance claim.  AirBnB's Extenuating Circumstances policy essentially means that every Host is (whether they know it or not) providing free travel insurance to guests, and is obligated to repay them if the guests have a legitimate claim that guests would normally have had to make through their holiday insurance company, and bizarrely the host has zero rights to even question such claims.  

The second action is able to be taken by AirBnB under no policy at all it seems, but instead under the guise of something called "routine security checks".  Apparently AirBnB gives itself the right to suspend payouts to hosts, even after guests have checked out, in order to carry out a "routine security check" that is supposed "to preserve the integrity of your account and your funds". 

However the moment we complained that AirBnB had stopped making any payments to us, they cleared and sent all the outstanding payments immediately, but it is worrying that AirBnB feels that it can do this, and that if we had not spotted it, AirBnb could potentially still be holding onto the money paid by guests and owed to us.

Also it does raise the question, despite us having been a host on AirBnB for over 7 years now, and having achieved SuperHost status - What would have happened if we had somehow failed this so called "routine security check"?  Could AirBnB have kept this money or returned it to the guests?  If not - then why were they carrying out "security checks" anyway? And if they did have concerns on the account, why not contact us to discuss them, rather than just stopping payments and not informing us that they had?   It is also worth considering that stopping payouts benefits AirBnB financially, through enhanced cash flow, and interest earned on the funds retained, and so AirBnB has a clear financial incentive to do take this action.

At the heart of this is communication - AirBnB is losing its ability to communicate personally with hosts, and increasingly losing the trust of seasoned long term hosts such as ourselves.  This is not good for AirBnB, just as it is not good for hosts.

So beware - on AirBnB a confirmed booking is not actually confirmed, and your guarantee that AirBnB will pay you if guests do stay, is not actually guaranteed either.  

[Gerry-And-Rashid0]

Well said - however extenuating circmstances works for both parties in equal measure. I am comfortable signing up for that as it was clear in their T&Cs. I am also comfortable that they do not need to share the reasons for the cancellation - it may be a very personal or upsettingi reason. It's sucks though when it happens.

[Hugo101]

Thanks for the advice, I've been just 3 months and I got the Superhost status right now, is important for me to know how they works in those situations.

Thanks again ^_^

Hugo

[Gordon0]

I've had 250+ guests. Two or so have been a proper pain in the arse.
A few towels have been stolen and a sheet or two damaged. 
I've made some friens and I'd cross the road to avoid others.
I haven't lost any money through cancellations (I've had three) and CS have been OK at fixing a few problems along the way.
I knew what I was getting into at the get-go, and nothing much has changed since. 
If I hated Airbnb (which some seem to) I'd politely 'turn off the lights' before leaving.
We've all got choices.  

[Inna22]

I do not think it has to be black and white. I think airbnb is the best of the platforms but it does not mean it is perfect and I can still hate some of the policies

[Daniel953]

Wow, thank you for providing the detailed information, very much appreciated! I too have multiple property's with Airbnb and on my last 'damage' request whereas Airbnb is holding $400 of traveler in my behalf, they took over two months to reimburse me of my claim and from what I can tell they did it out of their own pocket after my constant harassment to them! I reported the claim the same day my guests departed, in the past they reimbursed me within days once I provided proof, but something has changed as they now have a "resolution dept." that apparently is way overworked, after I received a claim number it took me emailing and calling them every week before I got a response to the claim.

Additionally their "cancellation options" plain suck! I have property’s in different areas with different seasons and need far more options than the three they offer, it’s pathetic here on Ft Myers Beach to allow a cancellation up to one week prior to arrival "In Season" when most of the winter season is booked six to twelve months in advance, yet doing option (3) with a 50% penalty for any cancellation at all at any time is absurd and sends vacationers looking elsewhere!

I get the majority of my rentals from VRBO/Homeaway but they apparently want to be just like Airbnb it seems, (even though they are the leader) because they are changing their entire platform (no more contact info) and “best match” search’s (rather than based on subscription level and other important criteria such as response and reviews) and their customer service is deplorable now! I avoid calling either of them as it’s typically a waste of valuable time! TripKey is even worse than Airbnb and Vrbo!

Let’s face it they “own us” , like Microsoft, Apple, Google, et’al, as they created the venues, in the early days back in 2006/10 they begged you to list our property’s, then once they have millions of owners listed you're just a number plain and simple and they’ll crap all over you as has happened to you guys. I’m so concerned I’m starting to sell property’s because I do not trust these folks going forward and there are so many owners/listings now it’s becoming too difficult to compete and manage it all. 

It’s my view that Airbnb and Homeaway end the others have tilted the arrangement far more toward the traveler/vacationer and with less and less concern for the owners, that’s my experience, because they realize that eventually owners develop relationships with their guests and have many repeat guests and go around their web sites and they lose the fees. Therefore they are focused entirely on getting new vacationers and keeping owners at bay! who knows what to come, albeit expedia. priceline, hotels.com set the hotel industry upside down, yet there are hotels being built all over the country, so its anyone’s guess!

The Lords blessings to you and yours!

[Zacharias0]

Absolutely agree with your post. Its not until the working machine stops working that we as hosts stop taking the money maker for granted. This machine can stop and has for many of us gave us pause about how it all works. Luckily you watch your payments and spotted the issue quickly. I was in your spot a few months ago and noticed all of a sudden my payouts STOPPED. I called them day and night and eventually had to caution them that I was cancelling every single reservation upcoming if they dont send me my earned money for guests who've already stayed in my house. They dragged their feet and I started contacting guests and telling them the situation and told them theyd have to reach out to AirBnB to find a solution. After one hard cancellation they started my payouts again.

[Linda108]

@Zacharias0  After all that you went through, any idea what caused the problem with payouts?

[Jon16]

Well explained and as you say concerning. I do have some serious concerns - actions akin to that of a totalitarian regime or in fact similar to an historic Governments that then got the deserved outcome (French Revolution for example - and a Online Guillotine seems fair).

I contacted Airbnb several times about strange errors on their site - like receiving a repeat message from a guest that had checked out over a year ago.

another a message from someone unrelated - messaging someone else about getting a lift - not in fact from my pending guest. 

It was extremely difficult to get the call taker to listen and understand that I was calling to help Airbnb. Eventaully i was understood and assured action would be taken - it was not, the problem persisted and then I received a message saying I was rude. In fact the opposite - Airbnb staff were not at all helpful and treated me like I was causing trouble.

In another instance - I accepted a request to cut a booking by 1 day - at the guest's request - when the change was made the varitaion was $421 AUD (say $390 USD) for 1 night!!!! instead of the nightly rate of roughly $91 - no matter how much we talked maths and 27/28ths of the total - Airbnb took $421 from me instead of $91 - unforgivable robbery.

I have also had the State Swat team (here called the SOG) to capture a wanted criminal - when i spoke with a staff member about profiles - she claimed a right to privacy. - outragous PC talk.

- Airbnb are getting too big for their boots - I have 35 places and just withdrew two more to my own site - evantually I will remove them all - as I have no satisfaction from anyone at Airbnb. 

Jon

[Mike11]

This is concerning.

I agree that Airbib has gotten big and maybe it's time to stop accepting new hosts until their systems have worked flawlesly for a year or two.

I have seen many successful businesses that grew too quickly and got too big and then went bang!

Airbnb, if you are listening, maybe it's time to consolidate a bit.

Mike

[Alejandro-Hector0]

I completely agree. My family and I have been hosts on Airbnb for 3 years now - and we've been superhosts multiple times. I never experienced a problem with Airbnb until they issued a refund for "Extenuating Circumstances".

The issue is. They issued the Extenuating Circumstances even though the guest did not cancel the booking. Meaning that the stay date passed, the room was blocked off for weeks, and we were at a total loss.

Customer Experience was no help whatsoever. I reviewed the Extenuating Circumstances multiple times, and it even says "A guest can make a claim AFTER they have cancelled the request".

To make matters worse - Airbnb Customer Experience closed the case without explaining to me why it was okay for them to force us into giving the guest a refund even though he never cancelled it.

The whole thing was just a horrible experience. But in our three years of hosting on Airbnb, this is only the first time Airbnb burned us. So we're staying positive. But I'm now a little more scared of working with Airbnb than I was a few months ago.

[Tony134]

Some of you have probably been wondering about what I'm about to say next, it's real.

Twice recently Airbnb reps literally lied to my face to use the Extended Circumstances Policy to cancel bookings for guests that wanted refunds and to change their travel plans.  The first guest clearly asked a question about the listing,(after booking) then immediately said "Oh but I can cancel then right?" when he didn't like the response.  He called Airbnb, complained about a hospital stay (apparently from a week before he even booked, noted in message thread) and they canceled the listing for him without any true documentation.

Second guest has asked me within an hour if he could cancel(for non emergency reasons) I said 'Sure, you'll probably need to call Airbnb, I'll approve it, no worries."  Airbnb rep called, started making up some lie about his reason for cancelling, when I stopped her dead cold and said "I just spoke to this guest, he told me his reason for cancellation and it's clearly listed in the message thread, I have no idea why you would lie to my face about that."  She got real sheepish, started stuttering all over the place, and I just hung up the phone disgusted with the whole thing.  It's clear as day there is a huge problem in Airbnb customer service department that Brian Chesky is either responsible for or ignoring.

TLDR:  Yes, Airbnb will lie to your face to use extended circumstances policy to 'avoid uncomfortable conversation' with hosts.

[Pete69]

And stories like this are why I won't use Airbnb or VRBO for 30 - 90 day stays renting my entire house out. There's too much at stake as far as non-payment, bounced payment, etc. I will use Zillow under MY terms and conditions, not the least being getting a wire transfer up front as ALL real estate deals are normally done.

Other hidden risks include slip and fall accidents or a guest burining the place down. Even with insurance, the deductible is mine to pay. There's a reason why insurance companies don't like to insure Airbnb rentals. It's higher risk than normal.

[Jeanie19]

Hi,

My husband and I have been hosting about a year and a half to date.  Most of our guests have been great!  However 2 different issues have arisen.

1.  Similar to this discussion, a girl and her boyfriend just recently booked for 2 nights.  Originally, the girl booked the reservation as 1 guest and I immediately contacted her to confirm (as you will see from #2 WHY).  Anyway, something was "off" from the very beginning!  It was a last minute booking and then they just left at approximately 9:30 pm on the second night stating a family emergency.  They left a "ton" of food (way more than what 2 people would need for a 2 night stay), and the place was a mess with all the lights on and overhead fans running etc.

Now,  I am wondering whether they will try to use the "extenuating circumstances issue" and hope this will NOT be the case, as I do not even believe they really had a family emergency, and may also have hoped to sneak in additional people, but because we live on property, were  unable to do so.  However, we do not really know whether they may have had additional people there or not on their second full day there, as we had an afternoon engagement.  What we DO KNOW is that they had full dish tray of washed dinnerware  (way more plates than 2 people would use) and a full sink of unwashed dishes and glassware that were over 6 place settings), when they unexpectedly cleared out.  This is the first time this has happened and it was really upsetting, however we are greatful that our place was not destroyed nor anything missing.

2.  The other issue we had was a guest booking for 4 people and showing up with 8 people in different cars and at different times, stating simply that she did not do the booking correctly due to being new to airbnb etc.  Once the reservation check in time begins you CAN NOT ALTER the number of guests.  We tried!

But we think it was just a ruse on her part, as our listing clearly states it can accomodate up to 6 people.  They had 8!  We lost $ and time trying to deal with the issue.

We also think this may be a common "work around" for young people trying to cheat the system with airbnb to pay less as they think they are going to an entire home where they think there is no owner there to observe.  We state we have a "lock box" and self check-in, but we prefer to "greet" our guests personally.

[Virginia9]

@Tom-And-Rene0 

Your post mentions 3 distinct concerns: 1) Extenuating Circumstances; 2) Routine Security Checks and 3) airbnb's Lack of Communication with hosts. The 3rd compounds the first 2 issues but is also a huge problem in it's own right. 

1) Penalty-free cancelation due to Extenuating Circumstances. When guests are granted this, it is frustrating and disappointing to hosts, and often means lost income. However, I also know from personal experience that airbnb extends the same to hosts. Something happened which caused serious threat to life in the middle of a booking (my listing & my living space are adjoined), and in a panic I called airbnb and reported it, asking that my guest be moved immediately. They paid her fees at the 2nd place and waived my repayment because of the dire nature of my Extenuating Circumstances. There was excellent communication between all parties and the entire matter was dealt with in a few hours. However, this was well over 2 years ago . . . 

I've also had an experience with "Routine Security Checks" which I think will shed some light on the situation. I do not believe that this has anything to do with checking hosts, but rather GUESTS, for criminal backgrounds. I had a guest booked for a week during high-season and just 2 or 3 days before arrival, he called me to say airbnb cancelled his reservation, and ask if I would rent to him directly as he'd been planning the vacation for a long time, his work schedule couldn't be changed, etc. I hadn't been alerted to this by airbnb. He explained that when he was young & dumb he stole a car - car theft is a felony - and the company had checked, found out, and cancelled the booking. I'd had recent, multiple experiences where airbnb did not contact me they CLEARLY should have, so I decided to wait & see what would happen with this. His check-in date arrived & passed and I was never contacted. I then reached out to airbnb to ask what had happened to the booking, as it had totally disappeared from my dashboard  - no record of messages, nothing in my future payouts, etc. I was told it had been cancelled for security reasons. I pressed for details and was told no more. Then I asked why my payout was not showing (as I have a strict cancelation policy), and was told I would get none as the guest hadn't cancelled. So I asked point blank why his background check wasn't done before he was allowed to book, and why wasn't I contacted when they realized they had almost sent convicted car-thief and x-felon to my home AND cancelled my booking! They responded that his past was private and that they attempt to do background checks when members join, but it isn't always done until the first booking - and my potential guest was a new member. 

I literally only have 18wks/yr (max) that I can charge the price my studio really should be - which is actually still very low. The rest of the year the price is discounted by 1/3rd or more and I am not booked nearly as often. To lose a full week in peak season with no chance of a last minute booking (very few people visit Jamaica in high season without bookings made well in advance), this was a huge hit for me. Airbnb is my main income and much of that 18wks income goes into my savings to tide me through the leaner months. But airbnb couldn't even be bothered to reach out and tell me it had happened, when, why - nothing.

Which brings me to my 3rd point. When I first became a host Nov 2015, I LOVED the company - I couldn't say enough good things about them. The first incident occurred when I'd only been with airbnb in March 2016. By Nov '16 I saw a huge decline in communication with/respect for hosts. Examples: On numerous occasions when I reached out for assistance I was given incorrect information - which I knew to be wrong - and was put in the position of educating employees. I've dealt with extremely significant errors and one time a $600+US mistake was made which took MONTHS to resolve and again, it was up to me to figure out what had happened as airbnb created the issue, realized it and took measures to resolve it – all without any contact with me! I had a guest destroy new sheets, submitted a claim with photos and was denied because "the guest said they were like that when he arrived". Because apparently my previous guests didn't mind sleeping on sheets with shredded sections, didn't mention it in comments & still gave me 5-star reviews. (Sarcasm) Recently when reporting that my email notifications were no longer being delivered, I was basically told it was my fault several times, then asked to prove I hadn't received the emails. I really was stunned. Firstly, why would I lie and secondly HOW can anyone prove they didn't receive something? Lastly, one 3 or possibly 4 occassions (including the last example) I’ve had a 2nd person take over my issue and apologize for the 1st employees ineptitude - although they would never word it in such a way as to accept responsibility.

Airbnb has grown to be huge and successful but they no longer seem to care about the quality of their employees’ training & ability, and decisions are made solely to increase their bottom line. My business only brings them a few thousand per year – if that - so why would they care about me when their listings in my area have grown by almost 30% in the last year, and most of those are much higher priced than mine? I sincerely wish the company would LISTEN, truly hear and respond to hosts’ needs! But sadly, my experience has taught me to protect myself by understanding their policies and systems as well as possible, work within them, and use them to my advantage when I can.

Good Luck & “Happy Hosting”.

[Rose357]

Airbnb could care less about hosts, its all about the renters.  It is usually the renters that are destructive, deceitfull and disrespectful, yet the host gets blamed.  .