Will a new STR platform rise from Airbnb's COVID Missteps?

Question

There are plenty of threads on how unhappy we all are with Airbnb's treatment of hosts around here: forced 100% cancellations, the new 40 page cleaning manual and 24 hour between guests suggestion (although guests will be able to see if we are subscribing to that suggestion so it's not really a suggestion), and the insulting bone we have been thrown with the 25% of our existing cancellation policy direct deposit too little too late.

Some hosts I know are snoozing their Airbnb listings in protest, some are taking measures to push more bookings toward other platforms and direct bookings. I have even seen one listing that said "We love our vacation home, but due to Airbnb's recent treatment of hosts, we are not taking rentals on this platform at this time." No matter what measures hosts are taking, one thing is clear: Airbnb caters mostly to guests, not the hosts who power their platform.

While there are plenty of other existing platforms, Airbnb has been the tech leader in the space for the past decade. I have been wondering for the past several weeks if there will be a new platform that arises from Airbnb's blunders. Maybe a baby company out there in Silicon Valley land waiting on a round of funding to get off the ground. What do you guys think? What measures are you taking to push bookings to other platforms?

Leora Merrell · Answer

I have mixed feelings on this.

1. This is a brand new situation to all of us, Airbnb included. When I did my research and ran numbers before investing in a STR, I certainly did not include pandemic in anything.

2. Airbnb competes with hotels. Hotel chains all offered 100% cancellation, no questions asked. Surely Airbnb had to do the same. I am currently battling with a VRBO reservation I made last September for a family reunion. We are all military with orders not to leave the area we are assigned to before June 30. Of course that is right in the middle of the planned reunion. I offered the owner to keep our deposit and reschedule for next summer. It took a ton of negotiating and honestly begging to get him to agree. But it left a terrible taste in my mouth and made me not even want to stay in his home we reserved. I'd hate for any of my guests to feel this way. I don't want to book on VRBO ever again.

3. I have chosen to list my STR on Airbnb. We all did. No matter what policies we choose, we are at their mercy. I understood that going in. Until I have my own booking platform that I can drive traffic to the way Airbnb does, I have a hard time getting upset when Airbnb is literally not my business. It's a tool I use to rent out my cabin and until I control all the tools, I have to understand that crap is going to happen.

4. Last, (sorry this is long) the number of upset guests had Airbnb allowed their hosts to keep their policies would outnumber upset hosts exponentially. The media coverage and outcry would have been INSANE. They had to choose between two crappy choices. No guests = no platform. Hosts will always be there no matter how upset some get. When vacationing starts again, hosts will come back because the money will be there.

Anyway, I probably don't make any sense. But if another platform comes up, I'll join that too.

Valerie Rogers · Answer

When they started fully refunding cancelled bookings with no regard to my cancellation policy and without my consent I immediately blocked off all of the high season dates for all of our properties. Going forward I will only use Airbnb to book my off seasons.

It’s not that I would not have given the traveler a full refund; we gave full refunds for every cancelled booking in March & April. I just didn’t like that they took the decision out of my hands.

I may discontinue using Airbnb completely once I see what this whole “cleaning protocol” is going to look like.

Thankfully VRBO allowed owners to control the refund process for Covid-19 cancellations. Travelers may decide they prefer using Airbnb over VRBO since Airbnb so clearly supported the traveler and VRBO supported the owners in this situation.

Historically I’ve always received the majority of our bookings from VRBO. Maybe it is time for me to start learning how to use social media marketing more aggressively than an occasional post now & then.

Michael Greenberg · Answer

Bye-bye-bnb-bye-bye!  Similar to @Valerie Rogers, I will be migrating away from Airbnb, not because they refunded, they just took a unilateral stance, then used it as leverage as a publicity stunt.  Their entire existence has been spent trying to capture Guests while dancing with Hosts to try and keep us happy.  It's even more infuriating now that they had to show their true colors.  There are a few "cottage sites" out there like Houfy that might be able to capture some market share using different strategies.  I believe there is an opportunity right now in this space to spin up an alternative solution.  One thing is for sure, I'm not going to put my business at risk again - hurt me once, shame on you; hurt me twice shame on me.

My additional question for the group would be "what would your ideal OTA look like?"  Loaded question, but could it work or is the model just not sustainable?

Michael Greenberg · Answer

So as Dr. King says "I have a vision".... so stay with me here.  I'm getting closer to the retirement years and thinking about my legacy.  My wife and I are givers, and we were talking about a way to give back even more.  I was then thinking about housing 1st responders for free while Airbnb was giving everyone their money back.  I chose to just to shut down, couldn't really afford the loss and the expense.  However, what if there was a way to remove the conflict Airbnb has with Hosts and Guests.  Stand up a non-profit SaaS STR platform. Charge one of two ways:  A small host annual subscription or a per stay fee that would be a true donation - less a tiny admin fee for maintenance, then provide a guest the option to either match that donation or a force a small minimal amount.  Allow Hosts/Guests to choose to whom the donation goes to, or it is tied to one... maybe first responders. I'm not familiar enough with 501(c) organizations and requirements, but this would take out the conflict. I honestly could see this being endorsed by some VERY powerful people.  Love to hear your thoughts.

Avery Carl · Answer

@Michael Greenberg VRBO almost has it right, it’s just not as slick and easy to use as Airbnb. This is a chance for them to reclaim their previous market share, or for a new one to pop up. I haven’t thought through what a potentially perfect one would look like, but I do agree with everything you just said.

Mark Reitman · Answer

I don't know if another OTA will arise as a result of this. But I do think Chesky (the CEO) will be on the hot seat to keep his job. An IPO is still a goal and investors will want confidence in someone to lead Airbnb to and beyond that point. While the decisions, themselves, are debatable, the decision-making process, communication and roll-outs have been awful. If he doesn't show he's learned and grown from that, he might soon be out or at least kicked to the Board.

Kevin Lefeuvre · Answer

1) Take airbnb to arbitration and get your money back. You can't sue airbnb but you can take them to arbitration. I did (for other matters), it took me 6 months, obviously some of my time and got them to settle at a good deal before the actual final audience. Settlement offer came from them! Please don't ask more I won't be able to share more. Read their terms about arbitration and take it from there. It costs you only $200. They have to pay and their pockets are deep enough to do so. Don't let go your hard earned money.

2) There is definitely room for a new OTA player but not now. I have been thinking of this since a couple years ago. I appreciate some hosts claiming they see the end of the tunnel, but I believe the industry is hurt for years, not just months, and hotels are better positioned to transit through this crisis than the unstable STR market composed of hosts with no reserve and not enough motivation to stay in this business. Some may say Airbnb started at time of crisis. Yes but not the same type of crisis. In 2008 was a crisis needing STR and there was no STR. Now there is a crisis NOT needing STR, and there are plenty of STRs.

3) If you are in a isolated mountain / vacation market with cheap RE assets where even with a low vacancy rate you are fine, and own 1 or 2 properties , I think you will be fine. All other cases are not sustainable IMO. If you scale the business you need to be in a more concentrated location and you are in trouble. Not even to mention the regulation in the cities which are trending to back to full ban.

4) Let's face it, STR BUSINESS FAILED TO BE A HIGH GROWTH, HIGHLY PROFITABLE! I started STR 5 years ago here in SOuthern California. Guests were high end, smart, educated, honest. A pleasure to interact with. 5 years later, in the same market I saw a total change in the profile of the guests, requiring more management time, less profitability and less fun. I decided to gradually switch to LTR and started doing so before COVID. I have one unit left now, vacant since 2 months that I think I will convert now without waiting summer. Not sure yet. As the leader in the space Airbnb has the biggest part of the responsibility for this failure by what I call mis-educating guests from the beginning. They thought they need to take the guests side to get volume (which is right). They chased higher volumes of guests instead of higher quality. Example: when they don't let the host ask for a deposit which is the basics of any rental (from a bike to a house), they allowed guests to believe they can do whatever they want. That culture was visible years before covid and predictable. I was not surprised at all with their policy during covid refunding guests.

Yitzchok Carmen · Answer

You make 100% sense. Airbnb is looking at the larger picture. And they know that you need them a LOT more then they need you. The hosts are not going anywhere, we are will use whatever it is that will fill our places up. We are not "customers" that are always right. Thats just the truth of the matter.

Nick Rutkowski · Answer

@Avery Carl

As hosts, it would be wise to diversify platforms and after this catastrophe with AirBNB this should happen sooner than later. AirBNB missed their IPO date and have been scrambling since. This pandemic made their decision making go out window, instead coming up with a well balanced approach to help both ends. I’ve heard the cleaning regulations are an opt in so hosts can be a part of a new collection. Who knows if that will stand. However, this could bring more people to AirBNB, host will have to choose between greater autonomy or profit. Fingers crossed for a better, less regulated platform.

Avery Carl · Answer

@Ken Latchers I also had this thought. How quickly we will forget this happened as the bookings roll back in.

Will a new STR platform rise from Airbnb's COVID Missteps?

Most Popular Reply