Airbnb Facing Proposed Class Action from Hosts Over Full Refund COVID Policy

Texas Airbnb host Anthony Farmer has filed a proposed class action lawsuit against Airbnb over alleged breach of contract in addition to other claims.

When the COVID pandemic hit in March of 2020, Airbnb reservations were canceled left and right, forcing the application-based rental company to engage their Extenuating Circumstances policy, in which full refunds would be returned to eligible guests. However, Airbnb hosts claim this has caused significant financial damage to their business and that many guests did not receive the refunds they were eligible for.

Hosts had existing refund policies in place which were overridden by Airbnb’s COVID refund policy.

For Airbnb hosts like Farmer who rely on this rental marketplace for the majority of their income, this refund policy deeply hurt their pocketbook. Hosts who rely significantly on the income earned via their rentals often impose strict cancellation policies, entitling them to a percentage of the reservation booking if a guest needs to cancel. However, when the pandemic hit, Airbnb activated a policy providing full refunds to eligible guests, negating any existing refund policy a host might have had.

In response to the outrage among some hosts, Airbnb announced that it intended to return 25% of what the hosts would normally have received from their standard cancellation policies using the $250 million fund they were working to establish. However, some hosts claim when this money did come through they did not receive the correct amount. Airbnb has blamed this on technical issues they are currently working to solve.

Guests were also unhappy with the way refunds were dealt out.

Hosts were not the only people unhappy with Airbnb’s reaction to the pandemic. Airbnb customers had difficulty accessing the refunds Airbnb promised. Some claimed the process for obtaining the refunds was unnecessarily complicated, and some never received refunds at all. Others still were offered travel credits rather than an actual monetary refund.

The main question presented in this complaint seems to be: where did the money end up?

Airbnb hosts like Farmer are demanding to know what happened to the money that was not used to pay back hosts for refund policy discrepancies, as well as the money that was allegedly not paid back to customers as promised. The official complaint alleges that, “Airbnb then kept the remaining funds for itself—ignoring its fiduciary and contractual obligations to remit any such money to Hosts.” However, whether or not this is actually the case remains to be seen.

Arbitration is in the works.

Airbnb announced that they are currently engaged in arbitration with Farmer and other hosts; however, Farmer claims that the company failed to pay the required arbitration fees on time. This is what he credits with the motive for filing the proposed class action complaint. If the class is approved, other Airbnb hosts who were similarly affected by the Extenuating Circumstances policy can join the lawsuit to seek recompense for their damages. If arbitration does not pan out, a class action lawsuit might very well be the only option for Airbnb hosts and customers to figure out a solution.