Key highlights from this report:
- Airbnb and Vrbo (Expedia) have been inundated with refund requests.
- Many of those requests stem from COVID-19 shutdowns, quarantines, etc.
- Both organizations are at risk of doing long-term damage to their brands.
Hard Times for Vacation Rentals
We all know the story. If it hasn’t happened to you directly, it has probably affected someone you know.
You booked a trip prior to March of 2020, not realizing the country was about to go into full-scale crisis mode. So you ended up losing money for your accommodations and (possibly) your airfare as well.
But it wasn’t your fault. You wanted to take the trip. You fully intended to do so. But you were unable to as a result of shutdowns, travel restrictions and quarantine procedures stemming from the coronavirus (COVID-19) pandemic.
I feel your pain.
My wife and I are currently involved in a dispute with a condo owner in Maui. We booked a trip back in January, with a follow-up payment during the first week of March. Little did we know Maui w.ould be implementing travel restrictions and quarantine procedures that made the whole trip a non-starter.
I’m not crying over here. Just sympathizing.
Now, Vrbo, Airbnb, and similar companies are under mounting pressure to honor refunds from people in similar situations — people who booked before the government shutdowns and quarantines went into effect.
Sure, these companies have cancellation policies and loads of lawyer-drafted fine print. But that’s beside the point.
The point is that millions of folks had to cancel trips due to forces well beyond their control. And many of those same people are now in financial distress due to job losses, child care, etc. So yeah, it’s a big deal.
How Are Airbnb and Vrbo Handling Refunds?
Airbnb recently updated its “extenuating circumstances policy” to be more flexible and accommodating for those who booked before a certain date.
As of July 1, 2020, the company’s website stated:
“Reservations for stays and Airbnb Experiences made on or before March 14, 2020, with a check-in date between March 14, 2020 and August 15, 2020, may be canceled before check-in. This means that guests who cancel under the policy will receive a full cash refund or travel credit in the amount they paid (where travel credit is available), hosts can cancel under the policy without charge or impact to their Superhost status, and Airbnb will either refund, or issue travel credit in an amount that includes, all service fees.”
Vrbo, which is owned by Expedia Group, has taken more of a middle-of-the-road position, seeking to accommodate rental owners and trip takers alike. A delicate dance, to be sure. They appear to be encouraging, but not requiring, property owners and managers to honor refunds when possible. Good luck with that.
According to a page on Vrbo’s help center, last updated on May 31:
“We [Vrbo.com] are strongly encouraging property owners and managers to issue at least a partial refund for situations in which a flexible credit cannot be accommodated. Please contact the owner or property manager to discuss cancellation and refund options. Although they are not obligated to provide a refund beyond the terms of the rental agreement, we are rewarding owners and managers who offer full refunds.”
When Pandemics Aren’t in the Fine Print
There are many sides to this argument, and plenty of legal arguments. According to The National Law Review, a pandemic like COVID-19 may or may not be considered force majeure, depending on the language used within the contract or services agreement.
But I think we can all agree that COVID is a major event over which the average person has little to no control.
We could argue all day about who should receive a refund or who shouldn’t, when it comes to vacation rentals and coronavirus restrictions. But let’s cut through the noise and get down to the basics.
A person who pays for a vacation rental and does not get a refund for events beyond their control ends up losing a significant amount of money. A property owner who refunds a booking also loses money.
The real question is, was the property owner who accepted the payment able to provide the service at the mutually-agreed-upon date, or another date reasonably close to it? And was the person who booked and paid for the rental able to access it on that date?
In many scenarios (including my own), the answer to both of these questions is no. So the law should side with the consumer in this scenario, which is the person who paid for the trip.
Unfortunately, the laws that regulate the vacation rental industry aren’t always as clear as we would like.
Ending Up on the Wrong Side of History
Ultimately, we have a situation where people have paid for a service they were not able to use, due to forces beyond their control. Do you want to look those people in the eye and tell them “tough luck”?
Airbnb, Vrbo and similar vacation rental outfits have some tough decisions to make over the coming months. More and more people will request refunds. More and more property owners will dispute them.
There is no clear guidance on how to handle this, because none of us have been through it before. (Internet booking wasn’t a thing during the Spanish Flu, so don’t even go there.)
At the end of the day, these companies should ask themselves two questions:
- What is the right thing to do in this situation, when putting ethics before profits?
- And what do we stand to lose over the long term if we fail to do the right thing?
The answers are right there in front of them, if they choose to see.
Share your thoughts: Have you been left hanging by a vacation rental company? Ready to exercise a little people power? Share your experience below.