Airbnb’s home suppliers, or “hosts” using the Airbnb label, are beginning to use legal channels to hold Airbnb accountable for “unilaterally, and in violation of hosts cancellation policies, refunding guests who booked reservations” and for inciting travelers to cancel their reservations.
On March 13, Airbnb announced the company would be overriding its hosts’ cancellation policies by adjusting the terms of its Extenuating Circumstances policy and by issuing full refunds to guests for stays between March 14 and March 31. While the company refunded the cost of the rental, Airbnb did not initially refund its service fee. However, on March 14, after significant push back from its suppliers, Airbnb decided to also refund its service fee. Later, Airbnb extended the dates for refunds through May 31. The series of events led to significant hardship for its home suppliers who were working with guests directly to change stay dates before Airbnb stepped in an overturned their efforts.
As a result, hosts began discussing whether Airbnb had the legal right to take this action launching forums and groups such as Twitter’s Airbnb Host Class Action.
This week, Traverse Legal, led by managing partner, litigation attorney and Airbnb host, Enrico Schaefer, is taking things a step further by launching a fundraising campaign to pursue a collective action against the company, saying “collective action by Airbnb hosts is critical to effect change.”
“This fund is about bringing fragmented voices together,” Schaefer wrote. “It is about creating leverage and sending a collective message demanding change. Our attorneys are already working on the right legal strategy for group action. Our attorneys have dug deep into the terms of service, the extenuating circumstances policy, the arbitration mandate, the class action waiver and other contract issues.”
According to Shaefer, “There are hundreds of thousands of Airbnb hosts globally asking Airbnb to uphold their end of the bargain. Airbnb’s lack of transparency and lack of accountability are breaches of their contractual obligations to hosts. Now is a time for collective action. Hosts are making substantial capital investments directly tied to the Airbnb platform. They require predictability, follow through by Airbnb, transparency and accountability.”
The following text is taken from Traverse Legal’s website:
Airbnb unilaterally, and in violation of hosts cancellation policies, refunded guests who booked reservations between the dates March 14th and May 31st. Our analysis of the contract terms, relevant law and facts has led to the conclusion that Airbnb hosts have a viable breach of contract case against Airbnb:
- Why did Airbnb refund guests? Airbnb recently relied on the “extenuating circumstances clause” of its standard terms / agreement with property owners and guests to justify its first and second round of guest cancellations and refunds due. Airbnb concluded that the Covid-19 / coronavirus was an extenuating circumstance.
- Key Issue: Does a pandemic fall within the language of Airbnb’s extenuating circumstances clause?
- Do hosts have legal claims against Airbnb? As you will read below, our attorneys represent Airbnb hosts and have determined that Airbnb may be in breach of its platform agreement with hosts as a result of providing traveler refunds in response to coronavirus. Stated another way, guests were arguably NOT entitled to refunds under the rental agreement and Airbnb’s standard terms and policies.
- What can hosts do about the forced refund? Airbnb could be liable for money damages to hosts for allowing booking cancellations and providing refunds. The terms of service contain a mandated arbitration clause for all disputes. This arbitration clause may, or may not, be enforceable. A possible class action is being analyzed as the class action waiver clause could also be considered unreasonable under California law or if the class action waiver is determined a violation of public policy.
- What should you do if you are a Airbnb Host who was affected by the cancellation and refund decision? Contact one of our litigation attorneys representing hosts. We are on the front line of the factual and complicated legal analysis for hosts. While this virus has taken the world by surprise, unexpected circumstances are drafted into your hosting agreement with Airbnb. In short, a pandemic is one of the contingencies which was foreseen and the risk that was adjusted under the extenuating circumstances policy. Airbnb should follow those policies and terms. Instead, Airbnb has diverted what appears to be one billion dollars in host revenue by allowing cancellations for traveler reservations between April 1 and May 31. While Airbnb has pledged 250 million to hosts, that leaves hundreds of millions in damages to be pursued by property owners. As any hosts point out, travelers have the option of buying insurance against these types of events. Hosts do not.
How can I get involved?
I have been a super host with Airbnb for nine years, with over 500 reviews from 4.8 to 5 stars and with a rental revenue of $120,000 on average per year. Airbnb canceled my super host account and all related reservations twice over the last four weeks. They admitted it was a mistake but then resulted in stating that my account was fraudulent. I feel discriminated and harassed by Airbnb and I’m not provided with any proper information nor access to my account , so I can receive my financial records, which I need it for tax purposes and accounting purposes.. The Airbnb customer support team has been highly unprofessional and is no longer trust worthy. Host accounts are not safe, traveler bookings are not safe, revenues are lost. Airbnb does nothing. They have a monopoly and they use it to their advantage leaving hosts and guests, the very people that make them their money, in the dust.
I must disagree with Munro Murdock, especially this line:
Far too many Travelers are looking for someone to blame for why they aren’t getting their money back, instead of realizing that when they chose to book the travel, in so doing they assumed a certain level of risk, should their ability to travel be jeopardized.
We are able to travel. The restriction is not on travel into Florida. It is specifically on short-term rentals, or most guests / travelers would have made the trip. In fact, I have two friends in GA who traveled to FL for Airbnb rentals, only to find when they arrived that they were not allowed to occupy. Airbnb did not even give them the courtesy of informing them to reschedule.
I’m sure that Munro will say “the burden of knowledge / research / awareness of government regulation, even if it’s local authority, is on the traveler. As a guest / traveler and not a “host”, I feel very differently.
Arbitration may work out best for the hosts, as the court of public opinion would likely favor the travelers / guests. At least Kimberly P. (see above) recognizes this.
While I respect your right to disagree with my position on this, you are using an example from FL unrelated to our HI properties, business and Guests, and as such, that context does not apply to us. We would never allow a booked Guest to come and stay if a property was not available or shutdown due to local restrictions.
Several thoughts and comments to share on this subject! It is a controversial topic that many Hosts and Travelers do not fully understand.
The moment I realized what Airbnb was doing to hosts in the midst off this global pandemic, one of my very next thoughts and assertions was that, they are going to be the target of a “class ation suit” collectively filed by hosts over this matter.
However, as I have since learned, this initiative now under way is NOT a class action…as Airbnb’s TOS do not allow for class actions to take place. It consists of separate arbitration filings and they (Traverse, in this case) are doing work on a contingency basis for qualifying parties (as I understand) AND providing education for ALL others (for free) who may want to file their own arbitration request direct for the standard fee which is about $200, if I am not mistaken. Dealing with potentially tens of thousands of arbitration filings from Hosts all over the world will certainly get Airbnb’s attention. I’m sure they are smart enough to know that it is coming.
For me, this is first and foremost a matter of principle. Even if my Clients never see a penny of the $75k some odd amount that Airbnb took from them in a short matter of days in an authorized manner, I cannot move forward professionally, with a clear conscience, unless I initiate the filing of the arbitration claims on behalf of the many property owners so affected, that I represent. To do so would be, I feel, a breach of my fiduciary duty to my Clients, as they have entrusted me and my Team to represent them and to protect their rights, as it pertains to their vacation rental property investment. Without question, their rights were clearly violated by Airbnb during this crisis.
When you watch the videos on Traverse Legal’s Youtube channel you will quickly see that they are also doing this out of principle, and out of a sincere interest to help hosts who suffered from Airbnb’s breach of contract and releasing funds back to Guests when they were not authorized to do so. I don’t think it is fair to just assume their sole motive is the profit one without doing more research on the matter.
Yes, IF the arbitrations are successful in favor of the complainant hosts, they (Traverse) will be in a position to earn legal fees for their involved efforts of representation, but until then, they (Traverse) will be investing significant amounts of money (probably in the high six to low seven figures) to represent hosts / managers in their arbitration claims, without any guarantee of being paid for their work. To me that is a fair approach given the circumstances we find ourselves in at this time, with little to no revenue being generated in the travel sectors of the economy. I think many hosts on their own would not know where to begin with a matter like this, but if educated and empowered by those in the know, may actually feel like they have a voice and could recoup some funds that were taken from them in an unauthorized manner.
Unfortunately, many Guests/Travelers mistakenly assume that all Hosts are all greedy and do not care about the impact COVID-19 has had upon the Guest populations throughout the world. Nothing could be further from the truth. Hosts and Managers DO care…they are in the HOSPITALITY business, after all…but they also care about contracts, terms and conditions. The vast majority of professional management firms throughout the world, are also bound by legal contracts with the property owners that do not allow them to simply refunded monies upon a Guest’s demands to do so. If they did it would be a breach of contract with the property owner and, as is the case with us in Hawaii where we are required to be licensed Realtors in order to conduct management activities, our very real estate licenses could be put in jeopardy by any action involving the disregarding of ANY legally binding agency contract with a real property owner.
As difficult as these times are, for everyone, I think THE most important thing, is for each and every person (and entity) to assume 100% responsibility for themselves, their actions, their contracts and what they agreed to or did not agree to. Far too many Travelers are looking for someone to blame for why they aren’t getting their money back, instead of realizing that when they chose to book the travel, in so doing they assumed a certain level of risk, should their ability to travel be jeopardized.
The issue at hand here, with Airbnb, is that the Company failed to remember that without the Hosts, they do not have a business nor a platform. They, without question, made a very calculated executive decision, to have the Hosts/Managers be the fall guys, if you will, and to carry the brunt of the costs of the COVID-19 pandemic…in order to insulate Airbnb, first and foremost. Certainly, without the Travelers there is no revenue for anyone, but for Airbnb to literally and blatantly turn their backs on their Host partners, in the manner in which they did, is truly mind-boggling! They demonstrated that they cannot be trusted to uphold their side of contractual obligations. The trust they once had with Hosts has been broken and will not be easy for them to restore. They will have hell to pay for that in the coming months and years, without question. It was truly a sad day for the Travel industry when a leader in the space (Airbnb) chose to forget their governing values in favor of the profit motive and trying to save face in the eyes of Travelers.
While the rental agencies and property owners have made millions the last few years renting their properties, these losses are only temporary for them. However, citizens who paid their rental money upfront and then either got sick from covid-19, or got laid off from their job are scraping by and risking losing their homes while trying to feed their families. Your arrogant complaining is nauseating and it wouldn’t bother me if you all lost your rental properties because of your greed.
i lost my company, that i spent five years building. i lost all my money. i defaulted on my credit cards. etc. airbnb’s change of policy put me out of business, permanently. the airbnb space is, or was, overcrowded. we are not making a killing like people did a few years ago. you have it wrong. the cancellation policy i had in place is a 50/50 split called a “strict policy”. seems fair to me, but airbnb made their strategic decision to override this policy. it was in their best interest to do this. how is it fair that i lose my company and my employees lose their jobs? how is it fair in your mind that i shoulder the burden 100%? your idea that hosts make a fortune is widespread idea that simply is NOT TRUE in my case and in the case of most in the country of Greece. the guests could have simply lost their few hundred dollars or euros. we hosts lost our companies, our livelihoods and our employees suffered the same fate. it’s not fair at all and i deeply resent your popular misconception of the situation.
Thank God for AirBnB doing the right thing! While the rental agencies and property owners have made millions the last few years renting their properties, these losses are only temporary for them. However, citizens who paid their rental money upfront and then either got sick from covid-19, or got laid off from their job are scraping by and risking losing their homes while trying to feed their families. Your arrogant complaining is nauseating and it wouldn’t bother me if you all lost your rental properties because of your greed.
I think it’s great that we as hosts are starting to get mobilized in trying to think outside the box about how to remedy the completely unfair situation that has been hoisted upon us by Airbnb
However, I do not think it is appropriate to ask for hosts, already in major financial pain and Dire Straits, To give money for really what should be free, as most class actions are taken on contingency.
Thanks for your work and research. I am also sorry you lost refunds from your properties as a result of Airbnb. Have you considered looking into VRBO / HomeAway as well?
I pulled all of my properties down from abnb years ago because of their unethical business practices and tactic. It looks as if they haven’t changed. So vrbo/homeaway is not much better. In fact, VRBO gave back an $8,000 refund to one of my clients without our consent. I currently have an attorney looking into it. VRBO did an abrupt about-face in the early March time frame and stopped returning refunds … but I am still out $8K and I am sure I am not alone. Of course, too, they will not respond to me regarding this matter. I just receive happy talk about how they are looking into it.
Best of luck to you. Should you decide to look into VRBO / HomeAway let me know and I will contribute.