‘Tip of the iceberg’: Airbnb, Vrbo guests fighting for refunds after coronavirus cancellations
Evan Skowronski was supposed to stay in a Connecticut Airbnb this month with his wife after booking their stay in January.
Due to the coronavirus pandemic, the couple opted to cancel their trip in April. Skowronski, 53, a scientist working on infectious disease surveillance, canceled the booking outside of the company’s extenuating circumstances policy, which promises refunds or travel credits. He had been caught up in a back and forth with the company and his host in an effort to receive a refund, only just receiving it Thursday.
And Skowronski is far from alone as travelers and hosts from short-term rental platforms like Airbnb and Vrbo have been stuck battling for their money back.
Emma Kaufmann, 49, is another hurt consumer. The writer and illustrator is seeking a refund of more than $1,400 after canceling her reservation for a trip to Berlin set for three weeks in June and July. She made the reservation in January and chose to cancel on May 12 after her flight was canceled. If she had waited to cancel (as the company had continuously updated its policy) she could have qualified for a company refund.
“How was I meant to predict what Airbnb’s policy would be on June 15? It is just as likely that they would not have extended their policy,” Kaufmann, of Baltimore, Maryland, told USA TODAY.
The coronavirus pandemic has prompted many a U.S. traveler to rethink their travel or cancel it entirely, leaving airlines, cruises and hotels on the hook for refunds or travel credits. Short-term rental services’ unique models — where both hosts and guests exchange money on the platform — have created a complicated refund issue.
In the case of Airbnb, guests request refunds from hosts and the company, hosts requests from the company, and both groups have aired their grievances on social media when they grow dissatisfied.
But travelers could also resort to arbitration or attempt other legal action as they grapple with the financial fallout.
What Airbnb’s coronavirus cancellation policy looks like
When the pandemic happened, Airbnb had more than $1 billion worth of cancellations, CEO Brian Chesky told USA TODAY. The company made the choice to override its host cancellation policy to offer refunds to guests, which prompted an intense backlash from hosts.
“We did not want guests to feel like they were compelled to travel, putting themselves in harm’s way because they weren’t going to get a refund,” Chesky said of the choice. The company offered an apology and $250 million to its hosts, which Chesky said wasn’t enough to cover what they would’ve earned but was the most they could do. Airbnb also created a relief fund for its Superhosts, which is up to more than $17 million.
But a closer look at Airbnb’s policy reveals it has made changes over time, Teel Lidow, CEO and head of product at FairShake, which assists consumers with arbitration forms and processes, told USA TODAY.
On March 14, the policy said that existing reservations made on or before March 14 were covered under its extenuating circumstances policy. “Guests who cancel will receive a full refund, and hosts will be able to cancel without charge or impact to their Superhost status.” But the language shifted slightly by May 1: “Guests who cancel will have a variety of cancellation and refund options, and hosts can cancel without charge or impact to their Superhost status. Airbnb will either refund, or issue travel credit that includes, all service fees for covered cancellations.” Right now, Airbnb’s policy covers guests with stays through July 31.
Airbnb spokesman Charlie Urbancic told USA TODAY in a statement: “Once COVID-19 evolved into a global pandemic, we updated our extenuating circumstances policy to allow guests to cancel and receive a full cash or credit refund – including all our fees – for eligible bookings made prior to March 14. We made this decision because we firmly believe that travelers should not have to choose between safety and money.”
What Vrbo’s coronavirus cancellation policy looks like
Vrbo’s policy applies to bookings made before March 13. It has extended the policy until June 30 to bookings canceled due to government restrictions (which vary widely by city, county and state) regarding travel or stays in vacation homes.
Travelers outside the cancellation window can receive a full credit to be used within the next year. But if travelers are not eligible for a 100% refund and doesn’t accept credit, hosts are encouraged to give at least a 50% refund.
As for the refunds themselves: “There was a period where we had essentially had an operational challenge keeping up with all of the money flow and the refunds, and so they were taking longer for a period of time than we would’ve liked, but we’re starting to catch up to that,” Vrbo president Jeff Hurst told USA TODAY.
The company has taken a different approach than competitor Airbnb, which has played intermediary when travelers and hosts can’t work out the refund. If Vrbo hosts and travelers don’t reach a resolution, the host is subject to penalties.
“Ours has been more of a balanced approach, trusting our partners to do what’s right and providing rewards and repercussions on both sides of that equation,” Hurst said.
Ashley Gordon of New York, who was part of a group that made a four-day April reservation in Scottsdale, Arizona, for her bachelorette party, says the rental service’s refund policy lacks teeth. After initially being denied any refund of the $5,700 due, the property owner finally agreed to cancel the Gordon group’s final payment, leaving them with a $3,100 loss.
“Vrbo is deflecting responsibility, making their customers chase the money and not requiring a 50% mandated refund. I don’t expect the homeowner to lose everything, but Vrbo has made it clear they are standing behind their properties and not their customers,” she previously told USA TODAY.
Janice Kercheville, a 60-year-old retiree from Aurora, Colorado, was set to stay at the Marriott Desert Springs in Palm Desert, California, in March. Her group had to cancel due to coronavirus concerns because several in their party were high risk. She never received a refund.
“Ultimately the management company that handled the rental for the owner offered me a week in one of their other resorts, usable within six months, but that has basically no value because my group of friends are still not comfortable with travel and the additional risk of exposure to COVID,” Kercheveille told USA TODAY.
Have short-term rental consumers been successful?
Jennifer McDonald, an attorney from Atlanta, made an Airbnb reservation on Feb. 18 for a trip planned April 30 to May 3 and struggled to get a refund from her host.
When she tried to contact Airbnb by phone, the wait time was more than five hours, so she sent a message via the online chat feature on March 30 and received no response. She then contacted the Airbnb property owner on March 31.
“He replied he was ‘unaware’ of any updates to Airbnb’s cancellation policy and he would not offer a refund,” she said. McDonald took the issue to Twitter, and the company said it could be “some time” before she received a response.
An Airbnb representative ultimately told McDonald her trip would be refunded on April 3.
What consumers can do
Whenever you sign up with Airbnb or Vrbo — or most companies, really — you sign a contract, Lidow said. That contract may include a clause that says how you dissolve disputes with the company.
Generally, guests need to go through arbitration – a small-claims-court-style proceeding, usually done over phone or email –and explain what went wrong. The company responds, and the arbitrator issues a binding decision.
But it’s unclear whether Airbnb’s policy changes throughout the pandemic would hold up: “It’s really a untested question whether the changes that they made to their policies and their contract after COVID-19 happened in response to COVID-19 are binding in any way,” Lidow said.
Both hosts and guests are filing claims due to the COVID-19 cancellation policy situation. Lidow said the company has more than $3 million worth of Airbnb claims it’s processing from hundreds of hosts and guests, and thinks it’s the “tip of the iceberg.”
One such claim is from Blake Hayden. The 34-year-old is the host of a historical home in Tiverton, Rhode Island, which is furnished with ancient antiques and sits on the side of animal sanctuary where they have alpacas and horses. Hayden held fast to a strict cancellation policy, which Airbnb effectively voided during the pandemic, putting him in financial strain amid canceled bookings.
“I’m phasing myself out of Airbnb, and I’m going to work with some of the other companies out there that do short-term rentals as well that have not treated their hosts as badly during these times,” Hayden told USA TODAY.
Lidow said it’s an uphill battle for those seeking refunds from short-term rental services outside of the cancellation policy coverage windows.
Skowronski has a week-long stay in Europe booked in October for his anniversary with his wife. He booked it with — you guessed it — Airbnb, which is only covering stays through July 31. Time will tell if he’s out more than $1,000: “Who knows whether that’s in the wind or not?”
Contributing: Bill Keveney
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