AirBnB to start getting security Deposits

[Chris232]

Just received an email stating :-

Airbnb-required security deposits

As part of our continuing effort to build trust on Airbnb, we may apply a security deposit for a small number of guests 48 hours before they check in. This is a limited test based on certain reservation details like timing and listing features.

No need to do anything—we’ll apply these security deposits automatically.

Thanks for hosting,

The Airbnb Team

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More about security deposits

Who decides the amount of the security deposit?

Since your listing doesn't have a security deposit set, if Airbnb applies a security deposit, the amount will automatically be calculated based on several factors, including the reservation total.

How do I collect from a security deposit?

You can report an incident and submit a claim within 14 days of check-out or before a new guest checks in.

To learn more about security deposits visit our Help Center.

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Note: If a security deposit hold can’t be authorized, the reservation will be subject to cancellation up to 36 hours before check-in. While Airbnb-required deposits are intended to protect our community, we are not responsible for failure to apply a deposit in any case where one may have been advisable.

[Branka-and-Silvia0]

 ALELUJA! FINALY!

[Amy732]

I’m concerned that this might affect my bookings.  It would be nice to know the criteria for charging the deposit. 

[Oad0]

Small correction, security deposit is not charged. This is done by placing a “hold” on credit card, similar to hotels, car rentals.

[Alisha31]

I just received this as well and it isn't clear - do WE have to do something if we currently don't collect one or do they take care of it if they deem risk cases to come up??   I am a little concerned about their fine print:  

Note: If a security deposit hold can’t be authorized, the reservation will be subject to cancellation up to 36 hours before check-in. While Airbnb-required deposits are intended to protect our community, we are not responsible for failure to apply a deposit in any case where one may have been advisable.

So wonder if this applies for just future bookings and they apply it at that time (as in no surprises down the road for the guest), or if they can go back to bookings I already have in place for months and can make another request (which would likely aggravate the guest)

[Sarah-and-Alex0]

@Alisha0 we're concerned about exactly the same thing - we have a lot of international guests, and we have no idea if Airbnb will be able to successfully put a hold on their payment method, especially if they're in transit TO our place and can't get messages.  If the booking is cancelled, it sounds like we and the guest are both out of luck (them for a place to stay, and us for income for those nights)?  

[Carl79]

Airbnb go out of their way to jumble a load of words up and make sure it doesnt make a definative statement at the end of it. I had the same gumpf come through form the mothership and it just gives out that queasey feeling when you sense somebody is angling to screw you over. 

Hopefully they will get the balls to spell it out clearly and be done with it. 

First reaction to the news is i def dont like the bit about us having to make a claim before the next guest checks in. Thats possibly within four hours. As i have another life i cant be there 24/7 and sort that bit out for airbnb. 

If they really want to build trust in the platform and avoid dodgey guests getting a foot through the door they should let hosts see the guests references and verifications BEFORE we accept their booking request instead of witholding it from us. Plus they could stop bullying guests into accepting instant bookings and having no say over the booking being made in the first place. 

Saying hosts can control who stays in their property is hogwash. Declining a guest gets you punished with being made invisible on the search engine. 

[Emilia42]

This is the e-mail that I received. A little different since I alreay do "require" a security deposit.

[Rachel0]

@Emilia42 I also received this email which suggests that I already require a secuity deposit - I have NEVER required one so I don't know where they got that from.  It worries me that Airbnb are sending these emails out, seemingly at random, and full of the usual inaccuracies.  

[Emilia42]

@Rachel0, they are all system generated so there is likely a glitch somewhere. I am happy that Aribnb is moving in this direction. It seems to be in favor of hosts. I will be curious to see if it affects my bookings and/or if Airbnb will actually release those security deposits when needed. In over 275 reservations, only 3 have messaged me prior to booking to ask about the security deposit. People seem to not even notice it. But I’m sure they will if hundreds of dollars are being authorized on their accounts.

[Šarka0]

How I deciphered the Airbnb message on security deposits:

If you have set a security deposit amount, Airbnb will authorize that amount from the guest's card 48 hours before they check in, just to check if they even have that much money on their account - for any reservation made.

If you don't have the security deposit set, Airbnb will decide the amount on their own, calculating % of the reservation amount.

In case Airbnb can't authorize the specified amount from guest's card, they will automatically cancel the reservation up to 36 hours from check-in (because it's a hassle to extort the money from guests later if damage claim is made after the stay) = last minute cancellations.

So, right now I have the security deposit set to 300 €, because Airbnb was not holding it from the guests before and this was a safety net if anything happened, I could say the deposit was set that high from the start.

That means that the guest will pay XY amount for their stay, and 48 hours before check-in, Airbnb will try to take the extra 300€ from their account. If that fails, Airbnb cancels the reservation.

I might (will have to) lower that amount now, because I'm afraid I will get more last-minute cancellations because guests won't have enough funds on their cards to cover the security deposit that high. But then, how low should I go?

Now, questions...

How will Airbnb calculate the security deposit amount on their own? What % of the reservation amount will be added as a deposit? 10%? 50%? I would be happy with, let's say, price for one night stay, but then again, our prices are quite high - someone who rents for 15€/night will want a higher security deposit, and will have to set their own amount.

How long will Airbnb hold the security deposit? It should be at least up to 14 days after check-out - the whole period when the claim is possible to be filed.

That's my input how I understand it.

HomeAway has a different approach: The guest pays for the stay + security deposit at once. After their stay, hosts get a message asking if you would like to return the security deposit, or it will be refunded automatically after 7 or 14 days. However, the commission fee/payment processing fee also calculates in the security deposit amount, so when you refund it to the guest you also get the fee refund.

[Jerome79]

Agree with your comments! My concern is what happens if they cannot authorise guest payment of security deposit--do Airbnb then cancel reservation 36hours before arrival? If so, do we get paid as hosts? We are on a strict cancellation so we should get paid, but this is not clarified! I have been in contact with Airbnb support team and they do not seem to know about this new policy or how it works! 

[Branka-and-Silvia0]

Airbnb becomes a TRASH PARTY BOOKING SITE and it's about time Airbnb do something about it before it's banned all accross the world, along with all the other platforms and agencies.

I agree with @Šarka0  and others who think Airbnb should collect the actual security deposit at the time of booking ( like VRBO does) and not just the authorization on the credit card.

[Rosemarie9]

I agree. The amount of times I hear "it's just an airbnb", as if it doesn't matter what damage is caused. Ireland is now clamping down, and will be limiting STR from this year. The site has grown to the point where there are more difficult or destructive guests, even for an onsite host like me to constantly manage. I used to right off careless breakages or damage, but have been more proactive about putting in claims and making sure I uphold my cancellation policy. I have found that many do not read anything before they book and treat the place like a student house. Making guests more accountable will help, but they really do need to collect a deposit at time of booking, 48 hours before will lead to a nightmare rush of cancelled bookings I fear.

[Jennifer1421]

I'm happy to see this being tested.

I have a security deposit amount set currently, which I'll be feverishly comparing to what my competition is doing in light of this email. There are only a few hosts around me that have one set. I'm curious as to whether this news prompts more area hosts to add one, what their amounts will be, and whether I need to change my amount to stay competitive.

If I'm reading this correctly, a "hold" will be placed on a guest's credit card, for as yet to be clarified "certain reservations", 48 hours before the stay. I'm not clear on the reason for this timing, which seems ill thought out. Presumably, if the guest's payment method is maxed and unable to handle the additional amount, and the reservation is cancelled through the platform, host's individual cancellation policies will be disregarded and guests will be without a booking 2 days before their stay.

As the person communicating with guests, it would be ideal to know the parameters of when/why the deposit is applied and I hope that this is made clearer shortly. I would hate to have a message from a guest asking, "Why?", and needing to reply, "Gee, I'm not sure, but it's a decision made by the platform in certain situations". Poorly communicated financial decisions/reasoning won't sit well with most people, I'm sure.

I'm hoping that this information is made crystal clear to guests at the time of booking, so that they are aware that an additional amount will be requested and they can ensure their payment methods will have "space". If not, this initiative may go sideways very quickly. It would be nice to actually see how this is being presented to guests, so that we can better prepare for it.

[Cormac0]

@Chris232 

it’s a step in the right direction but alas will the CS's still be in control of the deposit’s allocation?

If it not applied to all Host, then will those without a deposit receive a disproportionate number of bookings with all the incumbent difficulties associated with deposit free listings?

I personnel favour a levy being deducted from each booking of half of 1% and the cash deposited in a no-fault claims account, last year alone this would have put $13 million into the no-fault claims account.

Since the number of claims is minuscule or at least we’re led to believe in comparison to the number of bookings, it would seem like the obvious thing to do.

What about “Moral hazard” I hear you intone (lack of incentive to guard against risk where one is protected from its consequences) or in other words people making false and Exaggerated claims, like every other claim this can be handled by an assessor and the review process of the guest.

Additionally, I would go so far as to say, that should a host leave the Airbnb platform, a host in the event of never making a claim would get a portion of the levy back since this bank account would be accumulating bank deposit interest.

With regards to the levy and rebate amounts an Actuary would be better placed to do the math.

Airbnb should change one of their mottos from

"fail Fast"

to

Keep it simple stupid