Is It Time to Break Up with Airbnb?

With coronavirus case counts rising steadily around the US, short term rental hosts are in for a rough few months. No one’s traveling due to quarantine restrictions and advance bookings have fallen off a cliff. Sadly, Airbnb seems intent on making things even worse for its own hosts. When the company decided to unilaterally grant full refunds to any guest who cancels due to coronavirus concerns, they left millions of hosts twisting in the wind. If you didn’t previously appreciate the risks involved with being too reliant on Airbnb for bookings, you probably do now.

Here’s what’s going on, and what you can do about it…

Airbnb Has Always Favored Guests

I’m constantly amazed at how many Airbnb hosts don’t realize that you are not Airbnb’s customer. You may help generate thousands of dollars in revenue for them every year, but your real estate and host services are simply considered “supply.” In Airbnb’s corporate mind, you are infinitely replaceable.

Airbnb has known for a long time that travelers are their key constituency. They’re the ones who whip out the credit card and send money directly to Airbnb. So Airbnb is pretty much always going to come down on the side of the traveler. You’ve probably seen this in action when it comes to damage claims or other challenges related to guests who don’t follow your house rules.

Airbnb hosts are now experiencing this guest-first orientation on a grand scale. Once they realized that the coronavirus would seriously impact the tourism industry, Airbnb certainly didn’t waste any time in circling its own wagons to protect its reputation with its actual customers: travelers. As a mere host, your wagon is left to fend for itself on the open prairie.

Your Cancelation Policy Isn’t Really “Yours”

Hosts with strict or moderate cancelation policies might have reasonably expected to weather the storm of disrupted travel plans somewhat intact. The whole point of a cancelation policy is to effectively share risk between traveler and host. Hosts and guests should have a right to expect that this means all risks, including reasonably known ones like a guest’s missed flight and completely unknown risks like a surprise asteroid impact.

We now know that Airbnb reserves the right to override hosts’ cancelation policies at their sole discretion. What that essentially means is that your “Flexible,” “Moderate,” or “Strict” host cancelation policy is merely a suggestion. It’s simply not within your power to enforce or waive the policy at your discretion. Instead, it’s enforced or waived at Airbnb’s sole discretion. Given that we’ve already established that Airbnb generally won’t have hosts’ best interests in mind, this is a significant risk for all hosts listing with Airbnb.

In case you’re still not convinced that Airbnb favors guests, just take a close look at what they call a “Strict” cancelation policy. It’s not actually strict at all. The guest can get a 50% refund if they cancel only 7 days in advance? That’s incredibly lenient. What if it’s a two-week rental? You’re highly unlikely to be able to re-book on such short notice. You’re out half the expected revenue and there’s nothing you can do about it. Interestingly, Airbnb still keeps their full booking fee. What kind of partnership is that?

How to Diversify Away from Airbnb

By now, it’s probably increasingly clear that short term rental hosts should pursue a diversification strategy. Stop telling people that you run “Airbnbs” and start talking about “short term rentals” or even a “lodging business.”

Your new strategy should include listings on the other major platforms like VRBO and, as well as a robust effort to secure as many bookings as possible on a direct basis. This means setting up your own website with searchable dates and the ability to accept payments and security deposits. Fortunately, there are some great services like Lodgify that take care of all the messy technical details for you.

If you want a fully custom short term rental website, there are going to be plenty of freelancers available on services like Upwork. Find the right person and you’ll have something up and running in a matter of weeks.

What Comes Next for Short Term Rentals

If the travel and tourism industries can’t get back on their feet by summer, 2020 may prove to be a total wipeout for many Airbnb hosts. The sad irony is that the more reliant you’ve been on Airbnb for your bookings, the more financial distress you’re likely to suffer.

But you don’t have to suffer in silence or inaction. Take this opportunity to rethink your booking strategy and take back control of your business. Get a direct booking site up and running. Trick out your listings on all the other major platforms. Be ready when travelers are finally on the move once again.

Some hosts will surely move to long-term rentals, house temporary healthcare workers, or even provide safe spaces for suspected coronavirus patients to self-quarantine. It’s a good bet that very few short term rental hosts will invest the time and energy required to post a new listing while much of the country is shut down. That may yet create an opportunity for forward-thinking vacation rental hosts to reap outsized rewards once the economy opens back up for business.

Be sure you’re ready when it does.