Balancing Customers in Conflict: AirBnb supports a renter by bending policy, screwing the guest, while failing to explain why…

Summary:

  • I booked a trip in Summer 2021, which I chose to cancel because of wildfires.
  • The AirBnb policy on extenuating circumstances appears to cover “declared emergencies.”
  • AirBnb had to arbitrate, ultimately coming down on the side of the renter
  • AirBnb customer service failed to explain why they did not honor the extenuating circumstance policy to me as a guest, when the governor of Montana declared a state emergency on July 14.
  • As a guest, I feel negative about this experience. I was a net promoter, but now I’m probably going to mention this story as a cautionary tale any time someone mentions the brand.
  • The renter probably feels supported.
  • AirBnb made a calculated decision between the two parties, but the third option was to support both customers and refund the money out of their own pocket.

The story:

I love AirBnb. I loved AirBnb.

At the beginning of July, I booked a trip to Montana on AirBnb, with 3 stays. By Mid-July things were looking bad. Two weeks before my trip, a statewide fire emergency was declared. Forecasts we for 90 degrees without rain, with wildfires and air quality changing daily. Over the the past year, I had seen front-line health workers under stress. This led me to thinking about the fire fighters and how a choice to travel under emergency could be putting them in harm’s way, if we were caught in a dangerous area.

My friends and I decided to cancel, and move the trip to New England.

Two of the cancellations went smoothly. One, didn’t fit the renter’s cancellation policy, but the renter graciously approved the cancellation. The third told me, “I was up there last week. Not much of a issue. No ground smoke smell at all.” We went to arbitration. I thought the AirBnb extenuating circumstance definition was clear and favored my case:

In arbitration, however, we went around and around. Round 3, I got the response:

I asked for confirmation on the extenuating circumstance policy.

Escalation didn’t take it anywhere. I never got a response. Twitter didn’t take it anywhere. I have about 17 followers. I was pissed, and everytime I think about it, I’m pissed, but it’s time to dial back the personal emotion and look at it from some different points of view.

By the Numbers

I am an AirBnb guest 15 nights a year. I’ll estimate, the renter is an AirBnb renter 150 nights/year. For simplicity, we’ll say that the nightly rate I pay averages about the same that the renter charges per night. The overall value of us as customers is 10:1 in the renter’s favor. All things being equal, arbitration should always favor the renter.

There’s a third option to consider, what happens if you make both parties whole? Then AirBnb would have to foot the whole cost of the rental, not just their service fee. Rounding, let’s say AirBnb makes a 20% service fee. It will take five trips of the same length/cost to get recoup one trip refunded. Is it worth it? What’s the guest’s customer lifetime value (CLV)? By the numbers, it’s probably a toss-up, but only because I’m probably going to continue being a customer. Also, money now is worth more than money later. Thinking about the decision maker, an operations or service manager, taking the money now instead of addressing the issue, may lead to higher KPI’s and they may not be around to sow the losses of choosing short term.

Beyond the Numbers: Customer Service, Trust in the Brand

It’s more complex than that. As I’ve said, I think there’s a clear, documented policy that says I should have been able to cancel. In my estimation AirBnb violated this policy. This goes to the heart of AirBnb’s brand. Is AirBnb trustworthy? Will AirBnb do what they say they do?

This could be headed off by a great customer service rep, who can show the customer the fine print and convince him or her that it was there all along. When escalated, a manager would be able to support where the rep wasn’t convincing, but also have some power to provide a sweetener.

In the case there are times when there’s just a cost of doing business. From my biased perspective, it appears AirBnb is finding in favor of a customer with a higher future value by ignoring their policy and then not explaining that policy. I’m still waiting for an explanation.

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