Spring Break. This year, for many of us the "break" is the worry that will happen to us financially or mentally as we all deal with the Corona Virus.
Our family this year spent a year planning our trip to Washington DC. This was going to be a family trip with our children (age 13 and 15), my wife's parents, and my mom and her boyfriend. My wife and her parents have spend time in DC, but for the rest of us it was going to be a new experience to visit the nation's capital and all that it has to offer. We were booked to travel home by train, taking the @amtrak home to Orlando.
We looked into hotels, but felt with three separate families we would have a better time renting a hometown that was more experiential than staying in a hotel.
We combed the internet and found a VRBO townhome that looked great in the pictures, and was conveniently located close enough to make this a walkable experience in downtown Washington. You can see for yourself by looking at this link for the townhome: "Grand Downtown DC Living" . For the past number of years we have used VRBO for family vacations, and had great experiences through the use of families second homes. Our trip was planned for April 5-10, taking the train home to arrive in town the Saturday before Easter, so that we could spend Easter at home prior to the kids starting school on Easter Monday.
Obviously, that has all changed.
As soon as we say that that the Corona Virus was going to effect our trip, we looked at our options. VRBO's policy is to contact the homeowner. Thus we did, and requested to cancel. The homeowner initially took the position of "I am sorry, no refund".
I then explained that I understood her position, but as this was outside of both of our control, we weren't cancelling for our convenience, but rather because of circumstances beyond any of our control. I offered to "share" in the hurt, and we offered to accept a 50% split, so we would both walk away wounded We even offered to change our booking to another time so that she would recoup the income at a later time. She accepted.
But then she reneged. Her response was "I am so sorry we are facing devastating losses we cannot refund you....
We will refund only what's required by VRBO." Now, I can imagine what the owner of this property is going through. I am sure that like most of us, they are facing financial challenges. Maintaining what I would assume to be a million dollar plus second home that counts on rental income to support the investment would be a challenge. With all investments there is a risk, and this situation could not have been foreseen by anyone.
I feel for the homeowner, and fully understand what she is facing (we owned investment property on the Florida panhandle during the BP Oil Spill, so I have been in her position before.
So we cancelled, and what was provided was a $329.00 refund (basically, the refundable deposit was returned, and the property damage protection was cancelled.
No alt text provided for this image
Thus we are currently out $4,033.59.
I could harp on the fact that we made a deal, and she reneged. I could use this platform to bash the homeowner for not providing a refund when services were not rendered for situations beyond anyone's control. Am I happy with the Owner's position? Do I want a refund?
Do I think that what has occurred is bad business? I am not going to go into that any further, because it is just sour grapes on my part, and not the reason I sat down to write this article. I want to focus on the bigger picture, and that is VRBO and how they are managing this crisis.
In contrast, VRBO's biggest competitor is Airbnb. Their coronavirus policy can be found here.
In essence, Airbnb has made the business choice to put the customer first, and is providing 100% refunds to all travelers. Obviously Airbnb has analysed the risk, and recognized that taking this position is going to upset and potentially turn away homeowners. However, when we all start travelling again, the CUSTOMER is going to come back, knowing that Airbnb put the customer first. While homeowner's may not like the short term pain, the long term gain from retaining their customer base will best serve them in the long run.
VRBO on the other hand, per their policies, is deciding to stand behind their position that they are just the rental platform, and the contract to rent is between the homeowner and the tenant.
Many homeowners have done the right thing and provided refunds, but although VRBO is encouraging homeowners to provide refund, they state: "We expect owners and property managers to provide at least a partial refund of the amount paid to date for any reservations booked before March 13 with a stay night between March 13 and April 30, but this is ultimately up to their discretion. Owners and property managers that are not abiding by our COVID-19 emergency policies may be subject to removal from our site." (via email from VRBO customer support received 3/25/2020).
So imagine now that you are a homeowner, and you do the right thing by offering refunds. You read about others at VRBO that have not done the same, angering customers and hurting the relationship of VRBO. Would you be happy with VRBO?
What I really think is bad business on behalf of VRBO, is that they are unfairly putting homeowners up against renters, and essentially leaving it up to both parties to behave like fighting rats.
Kind of like when you buy something through Amazon, and you find out you are actually buying through a third party?
When we make any purchase through any platform, we don't expect to be left to deal directly with some unknown party on the other end. Companies that are online platforms need to take responsibility for the products they are selling. If a supplier (in VRBO's case - the homeowners) do not represent the company appropriately, then it falls on the "company" to step up.
Through Linkedin, I reached out to the VRBO president, Jeff Hurst. I was pleasantly surprised that I did receive a response.
Obviously, these are trying times, and this is going to take a while to all fall out.
I have received notice from VRBO that they are refunding all of their service fees. We haven't seen this yet but I believe this will show up in time. That means that currently we stand to loose the rental at $2,995.00, a cleaning fee of $180.00, and Lodging Tax of $524.59, for a total of $3,699.59. Obviously a lot of money to pay for a vacation that we won't be taking, but again, that is not what this article is about.
The $2,995.00, to the best of my understanding is in the hands of the homeowner, and they are tasked with the decision of what to do.
What has become clear, is that this is their choice to make. They can do the right thing, and return the money. What would they get in return? The confidence that they won't get "punished" by VRBO.
By punishment, as I understand that could mean being banished from the VRBO site. So they move onto Airbnb. Thus VRBO's position means that they loose both the customer (me) and the property owner. And what sucks for VRBO is that they agreed to forfeit their fees, meaning for them it is really loose/loose/loose (although is it really a loss for the homeowner that walks away keeping the clients money?)
Let's further examine the other costs.
What happens to the $524.59 in Lodging tax? Is it right that this is still collected if services were not rendered? At the time of writing, I have reached back out to Jeff Hurst, but that was less than an hour ago. Time will tell.
What happens to the $180.00 cleaning fee?
The house won't need to be cleaned because of our stay, hurting the pockets of the cleaners than would have been paid for this work. Is this kept or returned? If kept, by who? The homeowner?
VRBO? Does it go to the cleaners to keep them employed so they can pay their bills? (If to the cleaners, then please keep these funds, but VRBO should be telling that story because during these times I think we all want to hear about how companies are helping the people that keep their businesses running.)
The bottom line here is that during these unprecedented times all businesses have and will continued to be faced with challenges that there is no manual outlining how to proceed. In this case, I believe that Airbnb's leadership took quick and decisive actions and made decisions that were in their best interest for the longterm.
VRBO on the otherhand has floundered, and while they have continued to inch closer to Airbnb's position, they have done nothing but damage the relationship with both the homeowners and the tenants by not taking leadership and creating an environment that does not look at the best interest in any parties short term, and hurts the long-term outlook. I hope they recognize that it is still not too late to change course as they need to salvage what they can before they loose their client base forever.
If I was a homeowner, I would look to be booking in the future through Airbnb, as they treated the customers right and thus the customers will be returning. I would worry about keeping my property at VRBO, because this situation is going to scare away much of the client base, and bookings are surely going to take a hit because of the companies position or unwillingness to take a stand.
As a customer, I don't think I will be back to VRBO. This has not been a positive experience.
I will certainly consider booking through Airbnb for having the customer's back through this ordeal.
Certainly something to keep in mind as we all make decisions related to our own businesses. Stay healthy and safe!
User's recommendation: Stay away from VRBO, as they are not looking out for the interest of the customer. Try Airbnb instead, or stay in a hotel.
Product or Service Mentioned: Vrbo House Booking.
Monetary Loss: $3700.
Preferred solution: Full refund.
VRBO Pros: Some great properties listed.
VRBO Cons: Poor leadership, Poor refund policy, Leave owners and renters in a bad position of disagreeement, Agent for the homeowner.