Airbnb getting hit?

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BeanCity
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Airbnb getting hit?

Post by BeanCity » Mon Apr 13, 2020 5:55 pm

Are people who bought properties with the intention of putting them on Airbnb for short term rentals getting hit significantly? I had to cancel multiple trips over the next few months due to covid 19, which made me wonder how the hosts are doing....how are you coping, if your demand has fallen?

Lee_WSP
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Re: Airbnb getting hit?

Post by Lee_WSP » Mon Apr 13, 2020 5:57 pm

Yes, there are articles on this. Apparently some are shifting to long term rentals.

renue74
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Re: Airbnb getting hit?

Post by renue74 » Mon Apr 13, 2020 10:10 pm

I had a full time Airbnb and switched it to a long term rental back in November.

I have several friends in town and they have been hit with cancellations.

My new tenants are retired downsizers and pay on time. I love them.

phxjcc
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Re: Airbnb getting hit?

Post by phxjcc » Mon Apr 13, 2020 10:20 pm

Varies by county/city.

Where we are, no rentals less than 60 days until June 20, by city decree.

Florida, I have read, is May 1--at this time.

btenny
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Re: Airbnb getting hit?

Post by btenny » Mon Apr 13, 2020 10:35 pm

There are tons of VRBO and Airbnb rentals in the Tahoe area. Many were custom built or renovated and expanded to 5-9 bedrooms for more profit. These mini hotels are now vacant. They are too big to long term rent profitably. Other homes have been upgraded a lot and removed from the long term pool to make them Airbnb quality. Now they are also vacant. There are few long term renters who live "on the hill". Many workers live elsewhere and commute. It is cheaper. Service workers want smaller cheaper places.

Add to these woes is the desire by permanent locals to restrict short term rentals drastically. Some areas are kicking them out completely.

So if this slowdown lasts these rentals will get repossessed or sold. It will be interesting how this evolves. I am pretty sure similar situations exist in many active tourist spots.

Good Luck.

Ocean77
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Re: Airbnb getting hit?

Post by Ocean77 » Mon Apr 13, 2020 10:39 pm

Those excesses like the Airbnb boom have a way of working themselves out eventually.

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celia
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Re: Airbnb getting hit?

Post by celia » Mon Apr 13, 2020 10:51 pm

Some of the owners (and RV owners) are letting medical professionals stay there for free so the medical worker doesn’t contaminate their own family. AirBnb is waiving all fees for these so in some areas, fewer rentals are available.

I also wouldn’t be surprised if out-of-town professionals who volunteered to help in hot spots are also being housed similarly.

MrBeaver
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Re: Airbnb getting hit?

Post by MrBeaver » Mon Apr 13, 2020 10:57 pm

I've seen at least one local property get listed for sale which has a couple of secondary units to the main house which have been rented with a pretty high booking rate (based on number of reviews) for the past calendar year. I don't know the specifics, but it wouldn't surprise me if the immediate halt in revenue has ruined the business model for the owners and they decided to try to get out ASAP.

It's actually in an area where we have considered buying a place to live in, but at this uncertain time even I'm having second thoughts. A long-term commitment and move now? Even though I have cash, it seems a bit scary. I can't imagine there are lots of buyers eager to buy right now. But maybe that means we should pursue it, assuming we won't be able to AirBnB the other units for a year from now to make sure the numbers work out.

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F150HD
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Re: Airbnb getting hit?

Post by F150HD » Mon Apr 13, 2020 11:14 pm

its more like Air-b-n-FEE :dollar :dollar

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Rainier
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Re: Airbnb getting hit?

Post by Rainier » Tue Apr 14, 2020 7:00 am

I don't live in an AirBNB town, but we are about 45 minutes outside NYC. Houses are flying off the market here, either being purchased sight unseen or rented. We assume it is people fleeing NYC either as temporary rentals or permanent movers who finally made the decision to leave the city.

Wanderingwheelz
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Re: Airbnb getting hit?

Post by Wanderingwheelz » Tue Apr 14, 2020 7:39 am

In my state short term rentals are banned indefinitely. Tourism is a very big industry for the state, too.

megabad
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Re: Airbnb getting hit?

Post by megabad » Tue Apr 14, 2020 8:10 am

I don’t do short term but a buddy of mine just pulled off all of his from Airbnb after the forced mandatory refund. He claims he is now looking for a different reservations site due to this policy. So I would say they might be losing some business permanently due to this. He had about a dozen rentals that cancelled. I guess he will see some of the relief funds from Airbnb but he is not comfortable with a 3rd party changing the terms of his rental agreements without his consent which I understand.

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Rainier
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Re: Airbnb getting hit?

Post by Rainier » Tue Apr 14, 2020 8:25 am

megabad wrote:
Tue Apr 14, 2020 8:10 am
I don’t do short term but a buddy of mine just pulled off all of his from Airbnb after the forced mandatory refund. He claims he is now looking for a different reservations site due to this policy. So I would say they might be losing some business permanently due to this. He had about a dozen rentals that cancelled. I guess he will see some of the relief funds from Airbnb but he is not comfortable with a 3rd party changing the terms of his rental agreements without his consent which I understand.
What else would he use? I assume all booking sites would have something like this or their customers would disappear. Also, AirBNB is not a third party.....they are THE party. It's their contract, their website, their customers.

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jfn111
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Re: Airbnb getting hit?

Post by jfn111 » Tue Apr 14, 2020 8:46 am

One of my larger customers owns, manages, 20+ ABNBs. He had us list 7 of his properties because business had gone to zero and he needed some cash reserves. 2 of the listings we pulled because he found some longer term renters for them. The other 5 are under contract with closings starting next Monday.
The importance of having an emergency fund for his business became critical for him to weather this storm.

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jhfenton
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Re: Airbnb getting hit?

Post by jhfenton » Tue Apr 14, 2020 8:55 am

Rainier wrote:
Tue Apr 14, 2020 8:25 am
What else would he use? I assume all booking sites would have something like this or their customers would disappear. Also, AirBNB is not a third party.....they are THE party. It's their contract, their website, their customers.
+1 Even airlines, notoriously inflexible, have had to adjust their cancellation policies to accommodate those who cannot or will not fly under these circumstances. AirBNB had no choice but to adjust their cancellation policies for rentals with strict policies.

Personally, I never book AirBNB listings that don't have flexible (or in a pinch semi-flexible) cancellation policies. I cancelled my reservation in April for the Boston Marathon, but I currently still have cancellable reservations in NC in July for a marathon and in Atlanta Labor Day weekend for a convention. Both of those events could be cancelled as well.

megabad
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Re: Airbnb getting hit?

Post by megabad » Tue Apr 14, 2020 9:08 am

Rainier wrote:
Tue Apr 14, 2020 8:25 am

What else would he use? I assume all booking sites would have something like this or their customers would disappear. Also, AirBNB is not a third party.....they are THE party. It's their contract, their website, their customers.
I don’t understand your post. Airbnb has a large number of competitors. A quick internet search would reveal this. Airbnb’s largest competitor offered much more favorable terms to hosts weeks ago. Airbnb is a 3rd party in every sense of the word. They do not own the homes, maintain the homes or do much of anything other than payment processing. The host decides much of the terms of the lease agreement (or at least they did until Airbnb changed that). Hosts explicitly selected from 3 different refund types that are very clear to customers. Or at least they did until Airbnb unilaterally decided to void all those agreements. While Airbnb has Direct agreements with both Customers and hosts (that I am quite sure allow them to change any terms whenever they choose), this doesn’t change the fact that they are a 3rd party. My point was that Airbnb’s actions were not viewed positively by many hosts and that they may indeed “get hit” Permanently because of this.

Barcelonasteve
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Re: Airbnb getting hit?

Post by Barcelonasteve » Tue Apr 14, 2020 9:26 am

It couldn't happen soon enough. I think airbnb invites too many yahoos to get into the rental business and, because the renters are short term and have entered a complex contract involving a third party company, the hosts can get away with nonsense that would be a lot more difficult to get away with for long term renting. My first (and last) experience with airbnb was last December when it turned out the "superhost" thought that simply not listing heat as an amenity relieved her of her obligation to provide a functioning heating system. It never occurred to me to check for this amenity. I realized too late that some of the reviews from a year before contained multiple references to the house being too cold (but the reviewers oddly gave the host high ratings). Airbnb took her side, too, initially ("Heat isn't listed as an amenity," they said). Holy crap! After a bit of effort where I made it clear I would be pressing the issue with every regulatory agency I could think of, I received all my money back and the superhost is dealing with the local housing code enforcement authority.

You might say that the vast majority of airbnb hosts are responsible, but I doubt there's reliable data to support that. I'd rather not risk having a vacation ruined by some high tech slumlord.

Lee_WSP
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Re: Airbnb getting hit?

Post by Lee_WSP » Tue Apr 14, 2020 11:24 am

megabad wrote:
Tue Apr 14, 2020 8:10 am
I don’t do short term but a buddy of mine just pulled off all of his from Airbnb after the forced mandatory refund. He claims he is now looking for a different reservations site due to this policy. So I would say they might be losing some business permanently due to this. He had about a dozen rentals that cancelled. I guess he will see some of the relief funds from Airbnb but he is not comfortable with a 3rd party changing the terms of his rental agreements without his consent which I understand.
Any short term rental site is going to allow credit cards. You cannot win the chargeback process under normal circumstances. It’s pretty much impossible to win given covid and the travel restrictions.

csm
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Re: Airbnb getting hit?

Post by csm » Tue Apr 14, 2020 11:39 am

megabad wrote:
Tue Apr 14, 2020 8:10 am
I don’t do short term but a buddy of mine just pulled off all of his from Airbnb after the forced mandatory refund. He claims he is now looking for a different reservations site due to this policy. So I would say they might be losing some business permanently due to this. He had about a dozen rentals that cancelled. I guess he will see some of the relief funds from Airbnb but he is not comfortable with a 3rd party changing the terms of his rental agreements without his consent which I understand.
So your buddy expected that those 12 guests should have just let him keep their money when it was not possible or safe to travel due to a global pandemic? And many of those potential guests could either be sick or unemployed, but he would have just said "too bad" there is no refund based on the cancellation policy in force prior to this unprecedented situation?
jhfenton wrote:
Tue Apr 14, 2020 8:55 am
+1 Even airlines, notoriously inflexible, have had to adjust their cancellation policies to accommodate those who cannot or will not fly under these circumstances. AirBNB had no choice but to adjust their cancellation policies for rentals with strict policies.
We've booked our first ever AirBnB stay for the month of August, along with international airline reservations. We made the reservation in early February before any of this current situation could be imagined.

We were hesitant and nervous doing so because we typically are spontaneous travelers and have never previously booked travel more than a month in advance of a trip. However, we knew we had to make this trip for my mother-in-law's 90th birthday and we knew it was unlikely we'd find a better price closer in (we booked business class travel on Lufthansa during a special fare offer and booked a month-long AirBnB stay with a rebate for being a full month but with a fairly strict cancellation policy).

While it is still unknown whether the situation will allow us to travel when the time comes, if we are unable for reasons beyond our control (e.g. flight is cancelled, or I am not be permitted entry to Denmark which is the case today), I would certainly hope that AirBnB (and the airline) will honor a refund.

I sympathize with business owners and do feel for what they may be going through. Nevertheless, it would not be fair if I am restricted from traveling (e.g. due to the flight being cancelled or the borders remaining closed), to have to lose the payments (which were not insignificant).

AirBnB is currently only allowing refunds for bookings made prior to mid-March for check-in up until end-May, so your buddy's dozen cancellations with refunds would have fallen in that time period. With some states prohibiting visitors and forcing quarantines, I absolutely think it was fair for those people to have the option to cancel with a refund.

tim1999
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Re: Airbnb getting hit?

Post by tim1999 » Tue Apr 14, 2020 11:59 am

There is a young entrepreneur in my area who bought a few $1 million+ large homes and spent big money converting them into luxury Airbnb-type "private mini-resorts" with big pools, hottubs, elaborate outdoor firepit things mini-golf courses, basketball courts, 5+ bathrooms, etc. I thought it was nuts but apparently he had some success doing vacation rentals on them for large families, bachelor party groups, celebrity entourages, etc.

He is probably getting killed on these houses right now, since tourism in my area is completely dead with restaurants and attractions closed, and they are not the type of houses that people would rent to live in long-term unless the rate were a bargain. You would also need to find a very specific buyer if selling them who would want all of those extra recreational "amenities" that he added.

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Rainier
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Re: Airbnb getting hit?

Post by Rainier » Tue Apr 14, 2020 12:24 pm

megabad wrote:
Tue Apr 14, 2020 9:08 am
Rainier wrote:
Tue Apr 14, 2020 8:25 am

What else would he use? I assume all booking sites would have something like this or their customers would disappear. Also, AirBNB is not a third party.....they are THE party. It's their contract, their website, their customers.
I don’t understand your post. Airbnb has a large number of competitors. A quick internet search would reveal this. Airbnb’s largest competitor offered much more favorable terms to hosts weeks ago. Airbnb is a 3rd party in every sense of the word. They do not own the homes, maintain the homes or do much of anything other than payment processing. The host decides much of the terms of the lease agreement (or at least they did until Airbnb changed that). Hosts explicitly selected from 3 different refund types that are very clear to customers. Or at least they did until Airbnb unilaterally decided to void all those agreements. While Airbnb has Direct agreements with both Customers and hosts (that I am quite sure allow them to change any terms whenever they choose), this doesn’t change the fact that they are a 3rd party. My point was that Airbnb’s actions were not viewed positively by many hosts and that they may indeed “get hit” Permanently because of this.
Pass the Kleenex box and I'll explain. Yep, AirBnB is the Kleenex of rental companies. It used to be VRBO, but no more. Customers who got burned by competitors weeks ago when the lockdown began will never have those customers again....but at least the hosts are happy.

Right now, the consumer is the ultimate king now and businesses will be fighting over their dollars. Nobody is going to lock into non-refundable deals for years to come (could be a generation or more). Pay now for a 3% discount (nonrefundable) or pay when you arrive....let me think about that one. Before all this I had already moved away from pre-paying for anything unless there was a substantial discount.

Hosts are endless at this point, customers are in short supply.

Lee_WSP
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Re: Airbnb getting hit?

Post by Lee_WSP » Tue Apr 14, 2020 1:15 pm

Rainier wrote:
Tue Apr 14, 2020 12:24 pm
megabad wrote:
Tue Apr 14, 2020 9:08 am
Rainier wrote:
Tue Apr 14, 2020 8:25 am

What else would he use? I assume all booking sites would have something like this or their customers would disappear. Also, AirBNB is not a third party.....they are THE party. It's their contract, their website, their customers.
I don’t understand your post. Airbnb has a large number of competitors. A quick internet search would reveal this. Airbnb’s largest competitor offered much more favorable terms to hosts weeks ago. Airbnb is a 3rd party in every sense of the word. They do not own the homes, maintain the homes or do much of anything other than payment processing. The host decides much of the terms of the lease agreement (or at least they did until Airbnb changed that). Hosts explicitly selected from 3 different refund types that are very clear to customers. Or at least they did until Airbnb unilaterally decided to void all those agreements. While Airbnb has Direct agreements with both Customers and hosts (that I am quite sure allow them to change any terms whenever they choose), this doesn’t change the fact that they are a 3rd party. My point was that Airbnb’s actions were not viewed positively by many hosts and that they may indeed “get hit” Permanently because of this.
Pass the Kleenex box and I'll explain. Yep, AirBnB is the Kleenex of rental companies. It used to be VRBO, but no more. Customers who got burned by competitors weeks ago when the lockdown began will never have those customers again....but at least the hosts are happy.

Right now, the consumer is the ultimate king now and businesses will be fighting over their dollars. Nobody is going to lock into non-refundable deals for years to come (could be a generation or more). Pay now for a 3% discount (nonrefundable) or pay when you arrive....let me think about that one. Before all this I had already moved away from pre-paying for anything unless there was a substantial discount.

Hosts are endless at this point, customers are in short supply.
Agreed. Finding hosts is not going to be the issue going forward. The challenge is convincing travelers to continue short term renting. Their no hassle refund policy is going to earn Airbnb a lot of good will if everyone else refuses to budge and makes people dispute the charge.

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Callisto
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Re: Airbnb getting hit?

Post by Callisto » Tue Apr 14, 2020 1:45 pm

My Airbnb offering isn't really a vacation rental, its for low/mid income working class people. As it turns out, a lot of people just want a cheap place to live with no lease, so they can find a better place, or, if they like the place, convert to a month to month.

Lotta people lost their jobs and went home. Typically this time of year I don't have many vacancies, its certainly been the most its ever been. But surprisingly, I think its going to come back strong, at least for my kind of tenants. I'm already almost fully booked by mid May. Ironically, I think my type of listing will be in ever more demand, as people start coming back to work, in still uncertain times. I imagine even less people are going to want to commit to a 12 month lease, in case things get worse and we see another round of layoffs, etc.

TravelGeek
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Re: Airbnb getting hit?

Post by TravelGeek » Tue Apr 14, 2020 2:21 pm

csm wrote:
Tue Apr 14, 2020 11:39 am
We've booked our first ever AirBnB stay for the month of August, along with international airline reservations. We made the reservation in early February before any of this current situation could be imagined.

We were hesitant and nervous doing so because we typically are spontaneous travelers and have never previously booked travel more than a month in advance of a trip. However, we knew we had to make this trip for my mother-in-law's 90th birthday and we knew it was unlikely we'd find a better price closer in (we booked business class travel on Lufthansa during a special fare offer and booked a month-long AirBnB stay with a rebate for being a full month but with a fairly strict cancellation policy).

While it is still unknown whether the situation will allow us to travel when the time comes, if we are unable for reasons beyond our control (e.g. flight is cancelled, or I am not be permitted entry to Denmark which is the case today), I would certainly hope that AirBnB (and the airline) will honor a refund.

I sympathize with business owners and do feel for what they may be going through. Nevertheless, it would not be fair if I am restricted from traveling (e.g. due to the flight being cancelled or the borders remaining closed), to have to lose the payments (which were not insignificant).
You might face the situation of your particular flight being canceled, but the borders are open. In that case, finding an alternative flight would seem to be a reasonable thing AirBnB would expect from you. Fortunately Lufthansa would likely assist you and rebook you.

Lee_WSP
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Re: Airbnb getting hit?

Post by Lee_WSP » Tue Apr 14, 2020 2:51 pm

TravelGeek wrote:
Tue Apr 14, 2020 2:21 pm
You might face the situation of your particular flight being canceled, but the borders are open. In that case, finding an alternative flight would seem to be a reasonable thing AirBnB would expect from you. Fortunately Lufthansa would likely assist you and rebook you.
I'm pretty sure the borders are still closed. Whether they open in August is anyone's guess.

csm
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Re: Airbnb getting hit?

Post by csm » Tue Apr 14, 2020 2:51 pm

TravelGeek wrote:
Tue Apr 14, 2020 2:21 pm

You might face the situation of your particular flight being canceled, but the borders are open. In that case, finding an alternative flight would seem to be a reasonable thing AirBnB would expect from you. Fortunately Lufthansa would likely assist you and rebook you.
I don't know how accurate it is, but I read on another post here on BH that some Schengen countries were extending their border closures. I googled it and was led to a link claiming that France has extended border controls to end October, and Denmark for another seven months. However, I do not know the credibility of the site (so won't link to it) and have not been able to confirm with any official sources, e.g. the Danish news that we watch daily.

In any case, it is too early to worry about travel in early August so we are patiently waiting and just following the restrictions in our local area for the time being.

Of course, another concern is if we travel across borders, through airports and on international flights, at a time when there is still a lot of person-to-person transmission and then arrive in Denmark to visit my 90-year old MIL and 87-year old FIL, it is probably not wise for us to visit with them until after a period of self-quarantine. Again, too early to start speculating.

DaftInvestor
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Re: Airbnb getting hit?

Post by DaftInvestor » Tue Apr 14, 2020 3:00 pm

Lee_WSP wrote:
Tue Apr 14, 2020 1:15 pm
Rainier wrote:
Tue Apr 14, 2020 12:24 pm
megabad wrote:
Tue Apr 14, 2020 9:08 am
Rainier wrote:
Tue Apr 14, 2020 8:25 am

What else would he use? I assume all booking sites would have something like this or their customers would disappear. Also, AirBNB is not a third party.....they are THE party. It's their contract, their website, their customers.
I don’t understand your post. Airbnb has a large number of competitors. A quick internet search would reveal this. Airbnb’s largest competitor offered much more favorable terms to hosts weeks ago. Airbnb is a 3rd party in every sense of the word. They do not own the homes, maintain the homes or do much of anything other than payment processing. The host decides much of the terms of the lease agreement (or at least they did until Airbnb changed that). Hosts explicitly selected from 3 different refund types that are very clear to customers. Or at least they did until Airbnb unilaterally decided to void all those agreements. While Airbnb has Direct agreements with both Customers and hosts (that I am quite sure allow them to change any terms whenever they choose), this doesn’t change the fact that they are a 3rd party. My point was that Airbnb’s actions were not viewed positively by many hosts and that they may indeed “get hit” Permanently because of this.
Pass the Kleenex box and I'll explain. Yep, AirBnB is the Kleenex of rental companies. It used to be VRBO, but no more. Customers who got burned by competitors weeks ago when the lockdown began will never have those customers again....but at least the hosts are happy.

Right now, the consumer is the ultimate king now and businesses will be fighting over their dollars. Nobody is going to lock into non-refundable deals for years to come (could be a generation or more). Pay now for a 3% discount (nonrefundable) or pay when you arrive....let me think about that one. Before all this I had already moved away from pre-paying for anything unless there was a substantial discount.

Hosts are endless at this point, customers are in short supply.
Agreed. Finding hosts is not going to be the issue going forward. The challenge is convincing travelers to continue short term renting. Their no hassle refund policy is going to earn Airbnb a lot of good will if everyone else refuses to budge and makes people dispute the charge.
Agree. AirBNB did the right thing here and I think it will only benefit them in the long run. The consumers will drive which of these services survive - not the hosts. For my last several rentals I used AirBNB. After getting a no-hassle refund for a COVID-19 hotspot that was on lockdown I will continue to use AirBnB (when things open back up). Folks like megabad's buddy who decide to flee AirBnB to a second-rate competitor (because they were forced to refund stays that couldn't be delivered) may have trouble renting going forward (it is going to be challenging enough without being on the industry-leading platform).

TravelGeek
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Re: Airbnb getting hit?

Post by TravelGeek » Tue Apr 14, 2020 3:15 pm

Lee_WSP wrote:
Tue Apr 14, 2020 2:51 pm
TravelGeek wrote:
Tue Apr 14, 2020 2:21 pm
You might face the situation of your particular flight being canceled, but the borders are open. In that case, finding an alternative flight would seem to be a reasonable thing AirBnB would expect from you. Fortunately Lufthansa would likely assist you and rebook you.
I'm pretty sure the borders are still closed. Whether they open in August is anyone's guess.
Pretty sure we weren’t talking about now :)
csm wrote:
Tue Apr 14, 2020 2:51 pm

I don't know how accurate it is, but I read on another post here on BH that some Schengen countries were extending their border closures. I googled it and was led to a link claiming that France has extended border controls to end October, and Denmark for another seven months. However, I do not know the credibility of the site (so won't link to it) and have not been able to confirm with any official sources, e.g. the Danish news that we watch daily.
I mentioned in some other thread here yesterday that the EU is considering extending the travel restrictions until May 15.

https://ec.europa.eu/commission/pressco ... /ip_20_616

President Macron is apparently pushing for a significant extension.

https://simpleflying.com/eu-september-border-closure/
csm wrote:
Tue Apr 14, 2020 2:51 pm

Of course, another concern is if we travel across borders, through airports and on international flights, at a time when there is still a lot of person-to-person transmission and then arrive in Denmark to visit my 90-year old MIL and 87-year old FIL, it is probably not wise for us to visit with them until after a period of self-quarantine. Again, too early to start speculating.
Completely agree.

bikesandbeers
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Re: Airbnb getting hit?

Post by bikesandbeers » Tue Apr 14, 2020 3:21 pm

the AirBNB on my corner is now on the (for sale) market. I know he tried to sell it four years ago but decided the money was too good renting it on AirBNB. Obviously he can't carry the mortgage without any rental income. We will see what it goes for.

Walkure
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Re: Airbnb getting hit?

Post by Walkure » Tue Apr 14, 2020 3:35 pm

Rainier wrote:
Tue Apr 14, 2020 12:24 pm
megabad wrote:
Tue Apr 14, 2020 9:08 am
Rainier wrote:
Tue Apr 14, 2020 8:25 am

What else would he use? I assume all booking sites would have something like this or their customers would disappear. Also, AirBNB is not a third party.....they are THE party. It's their contract, their website, their customers.
I don’t understand your post. Airbnb has a large number of competitors. A quick internet search would reveal this. Airbnb’s largest competitor offered much more favorable terms to hosts weeks ago. Airbnb is a 3rd party in every sense of the word. They do not own the homes, maintain the homes or do much of anything other than payment processing. The host decides much of the terms of the lease agreement (or at least they did until Airbnb changed that). Hosts explicitly selected from 3 different refund types that are very clear to customers. Or at least they did until Airbnb unilaterally decided to void all those agreements. While Airbnb has Direct agreements with both Customers and hosts (that I am quite sure allow them to change any terms whenever they choose), this doesn’t change the fact that they are a 3rd party. My point was that Airbnb’s actions were not viewed positively by many hosts and that they may indeed “get hit” Permanently because of this.
Pass the Kleenex box and I'll explain. Yep, AirBnB is the Kleenex of rental companies. It used to be VRBO, but no more. Customers who got burned by competitors weeks ago when the lockdown began will never have those customers again....but at least the hosts are happy.

Right now, the consumer is the ultimate king now and businesses will be fighting over their dollars. Nobody is going to lock into non-refundable deals for years to come (could be a generation or more). Pay now for a 3% discount (nonrefundable) or pay when you arrive....let me think about that one. Before all this I had already moved away from pre-paying for anything unless there was a substantial discount.

Hosts are endless at this point, customers are in short supply.
I have to disagree on consumers shying away from nonrefundable options - it's the businesses who will have to stop offering them. This crisis has created a moral hazard with the widespread generous cancellation policies. Right now the average consumer is asking "Why should I pay twice as much for a 'refundable' airline ticket if even the 'nonrefundable' ones get refunded every time things hit the fan?" In 2008 it was "too big to fail," but 2020 has given us "too cheap to not refund." The only way out is to charge everyone for the risk of cancellation upfront whether they want it or not.

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Re: Airbnb getting hit?

Post by Lee_WSP » Tue Apr 14, 2020 4:51 pm

Walkure wrote:
Tue Apr 14, 2020 3:35 pm
I have to disagree on consumers shying away from nonrefundable options - it's the businesses who will have to stop offering them. This crisis has created a moral hazard with the widespread generous cancellation policies. Right now the average consumer is asking "Why should I pay twice as much for a 'refundable' airline ticket if even the 'nonrefundable' ones get refunded every time things hit the fan?" In 2008 it was "too big to fail," but 2020 has given us "too cheap to not refund." The only way out is to charge everyone for the risk of cancellation upfront whether they want it or not.
Because the non-refundable clause is to prevent consumers from canceling for no reason or whatever reason. A force majeur event is unfortunate, but punishing the consumer for it is going to net you a ton of bad will.

I mean, if you have a monopoly, you can do whatever you want, but AirBnB most certainly is not a monopoly. And neither are the hosts who put their properties up for rent.

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Re: Airbnb getting hit?

Post by skjoldur » Tue Apr 14, 2020 5:30 pm

Rainier wrote:
Tue Apr 14, 2020 7:00 am
I don't live in an AirBNB town, but we are about 45 minutes outside NYC. Houses are flying off the market here, either being purchased sight unseen or rented. We assume it is people fleeing NYC either as temporary rentals or permanent movers who finally made the decision to leave the city.
I'm curious about this. By "flying off the market" do you mean that the listings are being removed or that you actually know they are being sold or rented? I have read that lots of properties (both rentals and sales) have had their listings removed. But I have not heard any rumors that places outside of NYC were being quickly purchased. Can you point me at any sources for this information? Thanks!

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Re: Airbnb getting hit?

Post by Hustlinghustling » Tue Apr 14, 2020 8:19 pm

parody or not I’m not sure. but speaks to this precisely
https://twitter.com/weeaboo/status/1241555854446518272

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Re: Airbnb getting hit?

Post by Whakamole » Tue Apr 14, 2020 9:13 pm

skjoldur wrote:
Tue Apr 14, 2020 5:30 pm
Rainier wrote:
Tue Apr 14, 2020 7:00 am
I don't live in an AirBNB town, but we are about 45 minutes outside NYC. Houses are flying off the market here, either being purchased sight unseen or rented. We assume it is people fleeing NYC either as temporary rentals or permanent movers who finally made the decision to leave the city.
I'm curious about this. By "flying off the market" do you mean that the listings are being removed or that you actually know they are being sold or rented? I have read that lots of properties (both rentals and sales) have had their listings removed. But I have not heard any rumors that places outside of NYC were being quickly purchased. Can you point me at any sources for this information? Thanks!
Maybe they are flying off the market due to the "repossessed by the bank" posters going up on the doors.

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Re: Airbnb getting hit?

Post by oldmotos » Tue Apr 14, 2020 10:50 pm

We have had two vacation rental properties in SW Florida for 10 years. We have lost the last week of March and all of April so far which has hurt but not enough to change our business. The high season here is Christmas through April so if the the problems had started sooner it would have been much more painful. All of our cancellations were from repeat guests that booked directly from us and only one asked for a cash refund. We will give the others credit on future stays so we are still taking the full loss but at least it helps with the current cash flow. I know of many owners in our area that gave no credit or a 50% credit and I can kind of see their point that this was not their fault so why should they take the full loss. We used to love VRBO/Homeaway but since Expedia bought them they are gouging both the owner and the guest and do not allow them to speak directly before accepting a reservation which is not how we like to do business. We looked into Airbnb but do not like their business model either and their current hosts are furious with them. Many companies with a more fair business model are trying to get a foothold in vacation rental booking but it is very difficult to fight the big guys. I think there will be some lasting problems but SW Florida is still an extremely popular destination so we are not overly concerned. We are fully booked for next winter with repeat guests.

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Re: Airbnb getting hit?

Post by megabad » Wed Apr 15, 2020 5:21 am

I must say that I am rather shocked to see widespread support for Airbnb, a vast multi billion dollar enterprise, over much smaller mainly local landlords. It seems that most of the people that demand refunds in their time of need also demand that those refunds come at the expense of others who also have limited resources instead of from the multi billion dollar company making the decisions. Only after the massive wave of pushback did Airbnb agree to offer any support for hosts (which I commend). I did not expect so much hypocrisy here. I had no idea so many felt this way. I didn’t think it was controversial to expect that maybe the large corporation might chip in to to help hosts a little bit after that large corporation unilaterally made a decision that harms them (whether that decision is right or wrong).

Probably should also point out that the parent company of Airbnb’s largest “second rate” competitor had 11 billion in revenue....

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Re: Airbnb getting hit?

Post by tea_pirate » Wed Apr 15, 2020 5:49 am

megabad wrote:
Wed Apr 15, 2020 5:21 am
I must say that I am rather shocked to see widespread support for Airbnb, a vast multi billion dollar enterprise, over much smaller mainly local landlords. It seems that most of the people that demand refunds in their time of need also demand that those refunds come at the expense of others who also have limited resources instead of from the multi billion dollar company making the decisions. Only after the massive wave of pushback did Airbnb agree to offer any support for hosts (which I commend). I did not expect so much hypocrisy here. I had no idea so many felt this way. I didn’t think it was controversial to expect that maybe the large corporation might chip in to to help hosts a little bit after that large corporation unilaterally made a decision that harms them (whether that decision is right or wrong).

Probably should also point out that the parent company of Airbnb’s largest “second rate” competitor had 11 billion in revenue....
Too bad, so sad, that's the "risk" aspect of their decision to invest in real estate materializing right there.

Furthermore, Airbnb is a scourge in any large city, contributing to inflating rental prices even higher. Here in Boston you've got a single person signing 1 year leases for multiple apartments in the same building, then turning them into short-term rentals on Airbnb. It's been reported in some buildings that entire floors feel like "hotels" with different people constantly coming and going. This removes supply from an already constrained rental market and jacks up prices for people who just want to rent one apartment. I hope those people see their $30k in total lease payments come due at the end of the month with a big fat $0 in the income column, and that they lose the shirt off their back by the end of this.

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Re: Airbnb getting hit?

Post by Rainier » Wed Apr 15, 2020 5:57 am

skjoldur wrote:
Tue Apr 14, 2020 5:30 pm
Rainier wrote:
Tue Apr 14, 2020 7:00 am
I don't live in an AirBNB town, but we are about 45 minutes outside NYC. Houses are flying off the market here, either being purchased sight unseen or rented. We assume it is people fleeing NYC either as temporary rentals or permanent movers who finally made the decision to leave the city.
I'm curious about this. By "flying off the market" do you mean that the listings are being removed or that you actually know they are being sold or rented? I have read that lots of properties (both rentals and sales) have had their listings removed. But I have not heard any rumors that places outside of NYC were being quickly purchased. Can you point me at any sources for this information? Thanks!
Quickly sold. No sources other than my wife that watches houses constantly. House came on last week....house goes contingent within days. Houses ranges from 750k to $10m+ in my town. These fast sales are happening at the low end.

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Re: Airbnb getting hit?

Post by megabad » Wed Apr 15, 2020 6:03 am

tea_pirate wrote:
Wed Apr 15, 2020 5:49 am

Too bad, so sad, that's the "risk" aspect of their decision to invest in real estate materializing right there.
While I understand this is the populist opinion after reading this thread, I would still suggest you be careful how far you take this mentality. Others could use the same logic to say that renters and primary residence owners have chosen to take risks and should be forced to pay or evicted and we would have a much bigger problem right now. I have always been an advocate of compassion and think that everybody could benefit from having just a little more of it right now. I say this as someone who actually somewhat agrees with your comments that short term rentals can be very disruptive to local residents. I just don’t believe in the “screw everyone but me mentality” because if everyone had that mentality...well...

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Re: Airbnb getting hit?

Post by Noobvestor » Wed Apr 15, 2020 6:04 am

I bought a home at what (luckily) turned out to be the lowest part of the downturn after 08/09. Since then, we have kept that property and rented in the HCOL area we now live in. I recently negotiated a shorter-than-usual lease in our building (3 months). In 3 months, we might pull the ripcord and move back to a LCOL area to save money (depending on employment, markets, etc...) but are eyeing prices to see how things shake out -- we would consider buying a new home in this region or elsewhere. Will be interesting to see how the AirBnb fiasco resolves.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

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Re: Airbnb getting hit?

Post by tea_pirate » Wed Apr 15, 2020 6:54 am

megabad wrote:
Wed Apr 15, 2020 6:03 am
tea_pirate wrote:
Wed Apr 15, 2020 5:49 am

Too bad, so sad, that's the "risk" aspect of their decision to invest in real estate materializing right there.
While I understand this is the populist opinion after reading this thread, I would still suggest you be careful how far you take this mentality. Others could use the same logic to say that renters and primary residence owners have chosen to take risks and should be forced to pay or evicted and we would have a much bigger problem right now. I have always been an advocate of compassion and think that everybody could benefit from having just a little more of it right now. I say this as someone who actually somewhat agrees with your comments that short term rentals can be very disruptive to local residents. I just don’t believe in the “screw everyone but me mentality” because if everyone had that mentality...well...
As a millenial, I'm having a real tough time finding an ounce of compassion for real estate owners, especially those of the older generations. They're supposed to be the victims now after inflating the housing market through decades of enacting NIMBYism to entrench their own positions, and until recently were sitting back with an "I got mine" mentality? Nope, no, absolutely not. We make over 2x the median household income for the area and are struggling to figure out if we can even afford one house to live in as a primary residence. The only people I've got compassion for are those working class people less fortunate than myself who have zero hope of ever buying a home the way things are going.

So you know what? I've got my 12 month emergency fund. Time for these landlords to pull themselves up by the bootstraps and get their own.

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Re: Airbnb getting hit?

Post by DaftInvestor » Wed Apr 15, 2020 8:05 am

tea_pirate wrote:
Wed Apr 15, 2020 6:54 am
megabad wrote:
Wed Apr 15, 2020 6:03 am
tea_pirate wrote:
Wed Apr 15, 2020 5:49 am

Too bad, so sad, that's the "risk" aspect of their decision to invest in real estate materializing right there.
While I understand this is the populist opinion after reading this thread, I would still suggest you be careful how far you take this mentality. Others could use the same logic to say that renters and primary residence owners have chosen to take risks and should be forced to pay or evicted and we would have a much bigger problem right now. I have always been an advocate of compassion and think that everybody could benefit from having just a little more of it right now. I say this as someone who actually somewhat agrees with your comments that short term rentals can be very disruptive to local residents. I just don’t believe in the “screw everyone but me mentality” because if everyone had that mentality...well...
As a millenial, I'm having a real tough time finding an ounce of compassion for real estate owners, especially those of the older generations. They're supposed to be the victims now after inflating the housing market through decades of enacting NIMBYism to entrench their own positions, and until recently were sitting back with an "I got mine" mentality? Nope, no, absolutely not. We make over 2x the median household income for the area and are struggling to figure out if we can even afford one house to live in as a primary residence. The only people I've got compassion for are those working class people less fortunate than myself who have zero hope of ever buying a home the way things are going.

So you know what? I've got my 12 month emergency fund. Time for these landlords to pull themselves up by the bootstraps and get their own.
Well stated. I thought the question you (megabad) started wasn't a question of AirBnB versus host - but a question of host versus consumer. For decades we have been renting houses for week long vacations (before Airbnb we did so through real estate agents who took similar fees to AirBnB). At one point we contemplated buying a vacation home of our own and renting out. The financials looked good and beneficial to us based upon how much we were paying yearly for rentals and how much we could potentially make by renting. Why didn't we do it? We didn't want to take on the risk. So for years I have allowed folks to profit off of me in exchange for them holding the risk - why should I now have to pay for their risk after years of them getting the reward from me? This is my view.

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Re: Airbnb getting hit?

Post by pshonore » Wed Apr 15, 2020 9:28 am

Rainier wrote:
Wed Apr 15, 2020 5:57 am
skjoldur wrote:
Tue Apr 14, 2020 5:30 pm
Rainier wrote:
Tue Apr 14, 2020 7:00 am
I don't live in an AirBNB town, but we are about 45 minutes outside NYC. Houses are flying off the market here, either being purchased sight unseen or rented. We assume it is people fleeing NYC either as temporary rentals or permanent movers who finally made the decision to leave the city.
I'm curious about this. By "flying off the market" do you mean that the listings are being removed or that you actually know they are being sold or rented? I have read that lots of properties (both rentals and sales) have had their listings removed. But I have not heard any rumors that places outside of NYC were being quickly purchased. Can you point me at any sources for this information? Thanks!
Quickly sold. No sources other than my wife that watches houses constantly. House came on last week....house goes contingent within days. Houses ranges from 750k to $10m+ in my town. These fast sales are happening at the low end.
I watch the property transfers in Central CT every week (local paper) and the list is getting smaller and smaller.

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Re: Airbnb getting hit?

Post by jhfenton » Wed Apr 15, 2020 9:39 am

oldmotos wrote:
Tue Apr 14, 2020 10:50 pm
I know of many owners in our area that gave no credit or a 50% credit and I can kind of see their point that this was not their fault so why should they take the full loss.
It doesn't matter how they feel or whose fault it is. If the purpose of a contract is frustrated by a change in circumstances, it is not enforceable. Unless there was a quite explicit provision to the contrary in their lodging agreements--highly unlikely--their frustrated lodgers are entitled to a refund, regardless of the stated cancellation policy. (The same goes for AirBNB, which is why the anger of the understandably frustrated hosts is misplaced.)

If they get away with it, it'll only be because it was too late for a chargeback, and it's not worth the trouble to sue in small claims court out of state.

Props to you for doing the right thing. I expect it will redound to your benefit in future seasons.

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Re: Airbnb getting hit?

Post by TravelGeek » Wed Apr 15, 2020 1:22 pm

megabad wrote:
Wed Apr 15, 2020 5:21 am
I must say that I am rather shocked to see widespread support for Airbnb, a vast multi billion dollar enterprise, over much smaller mainly local landlords. It seems that most of the people that demand refunds in their time of need also demand that those refunds come at the expense of others who also have limited resources instead of from the multi billion dollar company making the decisions. Only after the massive wave of pushback did Airbnb agree to offer any support for hosts (which I commend). I did not expect so much hypocrisy here. I had no idea so many felt this way. I didn’t think it was controversial to expect that maybe the large corporation might chip in to to help hosts a little bit after that large corporation unilaterally made a decision that harms them (whether that decision is right or wrong).

Probably should also point out that the parent company of Airbnb’s largest “second rate” competitor had 11 billion in revenue....
Consider a situation where consumer has agreed to pay $5000 for a monthly vacation home rental in location X. Original terms specify no cancellation after day Y. A week after day Y, pandemic is declared, governor of location X declares a shelter at home order and prohibits vacation rentals.

I am curious how you think this could or should be resolved. The consumer cannot use the rental. The property owner cannot legally let the consumer occupy the home. Should AirBnB cancel the reservation and send $5000 to the owner since it wasn’t their fault? (it wasn’t the fault of the owners of AirBnB either)

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Re: Airbnb getting hit?

Post by megabad » Wed Apr 15, 2020 2:30 pm

TravelGeek wrote:
Wed Apr 15, 2020 1:22 pm

Consider a situation where consumer has agreed to pay $5000 for a monthly vacation home rental in location X. Original terms specify no cancellation after day Y. A week after day Y, pandemic is declared, governor of location X declares a shelter at home order and prohibits vacation rentals.

I am curious how you think this could or should be resolved. The consumer cannot use the rental. The property owner cannot legally let the consumer occupy the home. Should AirBnB cancel the reservation and send $5000 to the owner since it wasn’t their fault? (it wasn’t the fault of the owners of AirBnB either)
You appear to be working on the premise that there was a Universal force mejeure issue here. The problem with that is that a huge swath of the country was not on lock down at that time of the announcement. This is not overly relevant though now.

To answer your question, if the fault lies with no one, assigning all the costs to one party does seem morally questionable to me. Though this appears to be the view of many in this thread (which is certainly hypocritical given the off topic political responses). It seems to me that Airbnb has continually reaped the benefits of the host property and has an ongoing contractual relationship with hosts and should share some of the burden (as they do in the proceeds). They eventually decided they agreed with me on this position. Despite the comments in this thread, I didn’t believe that as an overly controversial opinion and still don’t. Just want to get us back on track by saying this is not a political view for me nor a statement on housing equality. It is simply a statement that a company that screws its suppliers will suffer similar damage as one that screws its customers. I don’t particularly think either need to happen.

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Re: Airbnb getting hit?

Post by TravelGeek » Wed Apr 15, 2020 2:48 pm

megabad wrote:
Wed Apr 15, 2020 2:30 pm

You appear to be working on the premise that there was a Universal force mejeure issue here. The problem with that is that a huge swath of the country was not on lock down at that time of the announcement. This is not overly relevant though now.
Don’t understand this comment. My scenario doesn’t depend on any such premise. It’s a simple scenario.
To answer your question, if the fault lies with no one, assigning all the costs to one party does seem morally questionable to me. Though this appears to be the view of many in this thread (which is certainly hypocritical given the off topic political responses).
So how would you solve the scenario I laid out in a fair way? It’s a serious question that I am grappling with.

Perhaps:
Consumer pays $1666 to property owner
AirBnB pays $1666 to property owner
Property owner records a loss of $5000-$1666x$1666)

That doesn’t seem fair. Perhaps what gets split is the profit the property owner was expecting from the rental?
It seems to me that Airbnb has continually reaped the benefits of the host property and has an ongoing contractual relationship with hosts and should share some of the burden (as they do in the proceeds).
Should the consumer also contribute to the burden?

You mention AirBnB being a billion dollar business, but they are only that big because they handle so many property rentals (thus you want them to share the burden in many, many canceled rentals). What if it was a hypothetical case of a tiny competitor who manages exactly one rental - they also continually reaped the benefit of the host property etc etc. (how) does that change the financial burden?

Is there business continuity insurance that the property owners could have paid for to cover the losses? Or do they generally exclude pandemics?

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Re: Airbnb getting hit?

Post by megabad » Wed Apr 15, 2020 3:02 pm

TravelGeek wrote:
Wed Apr 15, 2020 2:48 pm
megabad wrote:
Wed Apr 15, 2020 2:30 pm

You appear to be working on the premise that there was a Universal force mejeure issue here. The problem with that is that a huge swath of the country was not on lock down at that time of the announcement. This is not overly relevant though now.
Don’t understand this comment. My scenario doesn’t depend on any such premise. It’s a simple scenario.
To answer your question, if the fault lies with no one, assigning all the costs to one party does seem morally questionable to me. Though this appears to be the view of many in this thread (which is certainly hypocritical given the off topic political responses).
So how would you solve the scenario I laid out fairly? It’s a serious question that I am grappling with.

Perhaps:
Consumer pays $1666 to property owner
AirBnB pays $1666 to property owner
Property owner records a loss of $5000-$1666x$1666)

That doesn’t seem fair. Perhaps what gets split is the profit the property owner was expecting from the rental?
It seems to me that Airbnb has continually reaped the benefits of the host property and has an ongoing contractual relationship with hosts and should share some of the burden (as they do in the proceeds).
Should the consumer also contribute to the burden?

You mention AirBnB being a billion dollar business, but they are only that big because they handle so many property rentals (thus you want them to share the burden in many, many canceled rentals). What if it was a hypothetical case of a tiny competitor who manages exactly one rental - they also continually reaped the benefit of the host property etc etc. (how) does that change the financial burden?

Is there business continuity insurance that the property owners could have paid for to cover the losses? Or do they generally exclude pandemics?
What you have described is exactly force majeure. As I said that isn’t particularly of importance other than it voids many contracts if explicitly called out.

I would likely resolve it exactly as Airbnb did in theory (without consideration of the exact payment amounts), with both Airbnb and the hosts taking damages depending on the cancellation window. If The cancellation window was long, damages would rather quickly approach zero. This was not Airbnb’s original position though. In your particular example, I wouldn’t expect the customer to be burdened though in many others I could see that being reasonable.

The size of Airbnb does not change my moral view that they should share in the burden. As such, the numbers aren’t particularly relevant to my personal view.

I would assume some insurance policies may cover some of the effects and some do not, not sure. It doesn’t affect my personal view on the above though artificial situation though in theory.

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Re: Airbnb getting hit?

Post by Pu239 » Wed Apr 15, 2020 3:29 pm

tea_pirate wrote:
Wed Apr 15, 2020 6:54 am

They're supposed to be the victims now after inflating the housing market through decades of enacting NIMBYism to entrench their own positions, and until recently were sitting back with an "I got mine" mentality?
NIMBYism is the reason for high housing prices? I always thought it had more to do with supply and demand.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot

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Re: Airbnb getting hit?

Post by colodane » Wed Apr 15, 2020 4:37 pm

Customers and owners of AB&B properties aren't the only ones in a pinch here. Just saw today that AB&B itself just went for another round of financing (don't recall how many millions it was) and had to pay 12% for the money!

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