Airbnb Possibly Ripped Off Hosts and Guests with the Covid-19 Relief Funds



Airbnb Possibly Ripped Off Hosts and Guests with the Covid-19 Relief Funds



Despite all the chaos in 2020, this year has been perfect for introductory IPOs in the stock market. Airbnb wants to raise $3 billion through its first public offering on the stock exchange.

The beginning of the year started well for Airbnb, but things got tough once the pandemic rolled out. Yet right now, Airbnb is experiencing a resurgence, and its business is unexpectedly recovering fast since the summer downturn.

The company plans on making its IPO filing official in November, right after the election. Investors will hopefully be able to purchase stock in December, just in time for Christmas. At least according to company officials, that is the plan.

The valuation of Airbnb is expected to be approximately $30 billion. It was crucial that the volatility in the stock market stay calm before the company made any financial plans public.

For practical purposes, travelers prefer to stay in private residences than expensive public hotels because of the pandemic. This is excellent for investors and any claims that Airbnb may be facing in the future.

Anthony Farmer


Anthony Farmer, an Airbnb host, filed a new class-action lawsuit against the company last week in the US District Court for Northern California, San Francisco. The case number is 3:20-CV-7842. Farmer is alleging that Airbnb violated contracts with its hosts by offering full refunds to guests right before the worst of the pandemic in March 2020.

Farmer is currently unemployed, so he depended upon Airbnb for regular income. He has a vacation property where he takes ongoing bookings. A guest had booked to stay at his property on March 27, 2020, but canceled the reservation on March 12, 2020.

Under the company’s cancellation policy, hosts would get 50% of the booking rate. Instead, Farmer received a $99 cancellation fee which was reversed out of his account two weeks later. The guest, however, received half of his booking rate of $225 as a refund. As a result, Farmer has lost a total of $655 from canceled reservations.

Airbnb has not been forthcoming on how it was refunding its guests. Hosts were receiving their refunds from the Host Relief Fund of $250 million. Unfortunately, most hosts received paltry sums or nothing at all.

Corporate Misdeeds


During the pandemic, the lawsuit explains that Airbnb ripped off its hosts and the guests.

To follow through with the corporate vision, Airbnb offered full refunds to travelers for fully booked rentals by March 14, 2020. For travelers to obtain a booked refund, they had to fulfill specific criteria by uploading rigorous documentation.

Howbeit, Airbnb did not offer full refunds to its guests. Some guests received partial refunds while other guests had their claims refused by the company. In addition to that, different types of compensation were diverted to travel credits for future stays instead of full cash refunds. Guests were forced to accept travel credits that would expire in 2021.

So far, about 200 hosts desire to join the class-action lawsuit across the United States. Enrico Schaefer from Traverse Legal, the claimants’ lawyer, wants to expand the lawsuit globally. Schaefer said that “Airbnb needs to return the money Airbnb took from hosts and start living up to its contractual obligations.” Attorneys for the claimants allege that Airbnb:


  • Violated California Consumer Protection laws

  • Engaged in the breach of contract against its hosts

  • Violated its breach of fiduciary duty



Airbnb Representative


Ben Breit, an Airbnb spokesperson, has responded to the new lawsuit. He mentioned that the allegations from the new lawsuit are inadequate and baseless. When the pandemic hit in early spring, the company responded according to its Extenuating Circumstances policy.

The company took upon itself to provide eligible guests full refunds according to its terms and conditions. By following policy, the company took a financial hit. In light of the pandemic, health and safety are a priority for guests.

New Endowment Fund


By and large, given the class-action lawsuit, the company just established a new relief fund for its guests that seek to provide compensation from any claims that arise. The Host Endowment Fund has 9.2 million shares. Claims will not be paid out until the fund reaches the threshold of $1 billion.

Expected Jury Trial


Despite the health and safety policy, Farmer is seeking comparative compensation. His attorneys are seeking statutory damages, punitive damages, and treble damages as allowed by the law. In addition to compensatory relief, Gibbs Law Group LLP and Traverse Legal PLC want financial records accounting with injunctive and equitable relief.




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