An Airbnb policy, designed in part to combat racial and ethnic discrimination against travelers, has, in effect, discriminated against homeowners, putting many of them out of business. Among those feeling the pinch are retirees and people nearing retirement. Until recently they had planned to use income from Airbnb rentals to supplement savings, cover unexpected expenses or make up for reduced earning power in a world that is inhospitable to older workers.
Those opportunities, to profit from the gig economy, were derailed or substantially curtailed after Airbnb rolled out a feature known as Instant Book. It enables guests, as they are called in the company’s parlance, to book automatically, without prior approval by the host. Instead, they are guaranteed a reservation purely on the basis of certain preset requirements that a host agrees to in advance (such as recommendations from past hosts, which might prove to be unreliable). In other words, the individual who is renting the premises gives up the right to subjectively vet those to whom they entrust their property.
Hosts who agree to these terms now stand to earn a lot more from Airbnb rentals, according to the company website. And since introducing Instant Book, in 2015, Airbnb has stepped up the pressure on homeowners to use this system. New York City hosts who signed on to Airbnb in November to update the calendar for their listings got the message, “Last month, New York hosts who let guests book instantly got up to 245% more views.”
The flip side is that hosts who want to personally vet their prospective renters, and therefore elected not to enable Instant Book in their listings, have recently seen their Airbnb rentals dwindle or evaporate.
That’s because the Airbnb algorithm, which determines search rankings, gives preference to listings that allow Instant Book. Details are proprietary, but my experience with the platform and interviews with hosts on three continents suggests that those who decline Instant Book are now operating at a noticeable disadvantage.
For some people it is more extreme than for others. But, generally speaking, unless a host has enough prior guests and positive ratings to offset the substantial weight given to Instant Book, their rank drops so low in search results that prospective guests are not likely to find their listing.
Hans Gutbrod, of Tbilisi, Georgia, is among those whose ability to be an Airbnb host has been destroyed. Gutbrod, who is in his late 40s, is the executive director of Transparify, a non-profit that ranks the financial transparency of major think tanks. For several years he rented his primary residence – a 900-square-foot “bright and modern apartment in old Tbilisi” – when he traveled for business or pleasure. During that time he had more than 20 guests and garnered consistently excellent ratings. Inquiries dried up “the moment I turned off Instant Book,” he says.
Like other hosts who object to Instant Book, Gutbrod says he needs to carefully vet guests – something most effectively done through human contact. He has sometimes turned away people who seemed to want more of a party place. ”Offering such a space is not a right,” he says.
Airbnb’s vigorous promotion of Instant Book coincides with well-documented charges of racism by its hosts, and the threat of damning class-action lawsuits against the company. But while installing measures to fight one form of discrimination, the company has engaged in another, says Loretta Egan, an “over 60” Australian costume designer for TV and film. ”I have the right to choose who stays in my home,” she adds.
Egan and her husband live in New South Wales, and for the past five years have rented their sunny studio in Bondi Beach (a Sydney suburb) via Airbnb. By exchanging written messages with potential guests, “we felt secure about their being in our place without our meeting them,” she says. Though multiple bookings and five-star reviews earned her “Superhost” status – a designation that applies to only about 7 percent of Airbnb hosts – Egan says that since declining to use Instant Book she has had very few inquiries, requests or bookings.
As an African-American woman, Nanine Alexander, 69, says she understands discrimination. “But the idea that I would do Instant Book is crazy,” says Alexander, a retired American journalist who now attends the Barcelona Academy of Art. Her Airbnb listing is for a private room and bath, with kitchen and living room privileges, in her 1,000-square-foot Barcelona condominium.
Alexander requires prospective guests to post a clear head shot on their Airbnb profile – she won’t accept a caricature, photo of the family pet or fuzzy beach panorama that some people use instead. And she wants to see at least one positive review from a prior Airbnb host or a LinkedIn profile that establishes the person as a “solid citizen.” Airbnb guests are strangers sleeping down the hall, she explains. “I don’t want to have to put a lock on my bedroom door.”
Built into Alexander’s vetting process is one last step after accepting a reservation: Her wife, Tamsen Wassell, 61, a management consultant, goes to meet guests at the bus stop or train station. Airbnb rules allow hosts to turn away people with whom they aren’t comfortable in person, Alexander says. So far it hasn’t been necessary for her to do that.
In a search for private rooms in Barcelona (hers is in El Born, a creative community near the beach), Alexander’s listing still shows up on the first page, but only after one eliminates Instant Book as a filter. Travelers who aren’t fluent with the Airbnb platform may not be sophisticated enough to do that. And though she has a strong track record on Airbnb (47 five-star reviews from guests), Alexander, too, has had a decline in bookings since ignoring Airbnb’s e-mails urging her to use Instant Book.
To pinpoint the shift, Alexander reviewed her records for the years 2014 to 2017, looking for seasonal patterns. After a steady stream of three or four guests per month from June through September of the first three years that she examined, bookings “dropped off a cliff” this summer, Alexander says. She had three guests per month in May and June, but only one per month in July, August and September.
For Gutbrod, Egan and Alexander, money from Airbnb rentals provides extra disposable income – they don’t rely on it to meet current expenses. But the decline in revenues brought about by Instant Book could pose a substantial hardship to other hosts. Simone Wallace, for example, a retiree in Venice, California, spent $60,000 of her savings to convert two rooms of her three-bedroom house into a studio apartment with a separate entrance.
Until recently Wallace was on track to recover that investment within three years, after which her venture would become profitable. But as Airbnb increased pressure to use Instant Book, interest in her property declined. Whereas last year she received several inquiries a week and was typically booked two months in advance, this year, during the entire month of November, she did not receive a single inquiry. Fortunately, she has a guest arriving in January who will stay for two months, but she worries about what will happen after that.
“I never made a lot of money during my professional career,” says Wallace, 72, who co-owned a community feminist bookstore for nearly three decades, and then became a teacher of English as a second language. “I need this annual revenue to stay in my home.”
Instant Book has also profoundly affected my own financial planning. In the autumn of 2015 and 2016, my husband, Ken, and I (we were then 63 and 59, respectively, at the time) rented our entire Park Slope, Brooklyn townhouse for three months – once through Airbnb and the other time through competitor HomeAway (which also owns VRBO). The proceeds completely covered our expenses as we spent three months of each year in France while I wrote a book about living on both sides of the sharing economy. (Ken is retired.)
Between trips, we carefully vetted prospective guests who contacted us, turning away a couple of scamsters whose criminal records we uncovered, and a movie producer who thought it would be great to have his entire crew work in our historic limestone. I shudder to think what might have happened with Instant Book.
This year, as Airbnb pushed Instant Book more aggressively, our game plan to use rental income to finance foreign travel fell apart: We did not have a single inquiry from Airbnb, or from HomeAway, which has also installed Instant Book. A report on our listing from HomeAway indicated that our premium property, on a coveted block, had dropped to about No. 600 in the search rankings.
We went to France anyway this fall, and found other ways to make the trip pay for itself. (Stay tuned for details in a future blog post.) Now back in New York, we’ve adopted Plan B: cultivating relationships with real estate agents to help us find tenants, rather than relying on homesharing websites.
Objections to Instant Book were among the more than 11,000 questions posted online in anticipation of a livestream Q&A on November 29 with Brian Chesky, Airbnb’s CEO, whose title is also “Head of Community.” But only topics voted most popular by participants were put on the one-hour agenda. Instant Book was not one of them.
Even if it had been, the response might not have been very illuminating. Though Chesky spoke about the company’s plans to improve its telephone customer service, he dodged most of the other questions, including this one: “Can you assure guests have an actual photo of themselves?” More than 6,000 people who participated in the program had voted that they wanted this question answered. (For a workaround, see Alexander’s vetting approach, described above.)
“I found the streaming event to be a waste of time,” Wallace, the Venice, California host, told me in an e-mail afterward. “We hosts are often established property owners needing to earn an income from our homes in neighborhoods we care about, and therefore want to know who is booking our homes.” The owners of Airbnb, who are in their 30s, have little in common with most hosts “and make no attempt to be inclusive,” she adds. “I assume we older folk are invisible to them.”
Actually, middle-aged and older people were included in the studio audience shown on the livestream, and among the questioners. But an animated video that opened the program, poking fun at us, took my breath away. The 51-second skit, animated by Nate Milton, which you can view on YouTube, is supposedly “based on a true review.” In it, a pair of dentures disappears from a glass while an elderly man – an Airbnb guest in Australia – sleeps. It seems that the dentures were stolen by a kangaroo, who appears grinning broadly as he wears them. The host makes sure they are returned to the guest, who writes: “Thanks to Lionel in Australia for saving my STOLEN TEETH. . . Great host!!”
At a time when older hosts are feeling disenfranchised by Airbnb, is this meant to be funny, or portray an act of kindness? Either way, it is one more example of extreme insensitivity by a company that prides itself on promoting “community.” Airbnb did not respond to requests for comment.
Deborah L. Jacobs, a lawyer and journalist, is the author of Four Seasons in a Day: Travel, Transitions and Letting Go of the Place We Call Home and Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide. Follow her on Twitter at @djworking and join her on Facebook here. You can subscribe to future blog posts by using the sign-up box on her website’s homepage.