Why Airbnb is not as good as you think.

Let's talk marketing, and let's start by talking about the hot topic when it comes to vacation rental marketing...Airbnb. 

Mention this topic to any experienced vacation rental manager or refer to a vacation rental as an "Airbnb" and expect an eye roll. While owners who self-manage or less experienced managers sing their praises to anyone who will listen.

What's the difference? Experienced managers know that not being the "Merchant of record" is a problem. This basically means you, the owner or manager, don't have control of the payment. Airbnb processes the payment, sets the terms, issues payments and refunds and basically has all the control (of YOUR money). 

Many owners and property managers realized why this is a problem in 2020. As Airbnb made the call to cancel all guest reservations and issue full refunds in mid-March leaving homeowners who relied solely on Airbnb as a booking source with no income. Airbnb said they could do this as part of their "Extenuating Circumstances Policy."

Whatever the reasoning it was a bad call for many homeowners, especially in our area where we didn't get hit by COVID until much later than the rest of the country. And just because Airbnb's policies work for homeowners in LA or NYC it doesn't mean they work for NPI, you can't take a blanket approach like that in this industry, there are too many variables. Airbnb apologized for their poor handling of the circumstances and has since tried to make changes to make it up to owners but it's too little too late. For comparison, other Online Travel Agencies (OTAs) left the cancellation decision to the homeowner/property manager but encouraged everyone to offer a more lenient cancellation policy given the circumstances. 

Another issue with Airbnb being the merchant of record is they don't pay you until after the guest checks out. As opposed to having the stay paid in full in advance. This leaves owners unprotected if the guest decides to back out of their commitment. If the guest has any kind of an "issue" during their stay (valid or not) and they complain to Airbnb about it, you can just about guarantee the guest is getting at least a partial refund. 

Today's guests are smart too. They know Airbnb is pro-guest as opposed to being pro-host, and they take advantage of that. We have more problem guests booked through Airbnb than all other OTAs combined. Some of the claims are outright ridiculous too but the guest knows our hands are tied because they booked with Airbnb. 

Fortunately for our market Airbnb is not the best OTA for bookings. While Airbnb is typically the top booking source for urban area markets, many beach or destination markets have VRBO (which along with Homeaway is owned by the Expedia Group) as their top booking OTA, which is the case for us as well. 

Since Airbnb had their Initial Public Offering in December their stock has soared. As those stock prices have soared so has the commission they charge to owners/property managers. What was once 3-5% (depending on which model you chose) is now 15%. That's just on the owner/property manager side. Their still adding a Service Fee on the guest side as well. Oh and when that cancellation or refund happens, guess which part doesn't get refunded...you got it, Airbnb's service fee.