Airbnb is making its global party house ban permanent.
Who knew the short-term rental business could be fraught with so many pitfalls?
Airbnb (ABNB) – Get Airbnb Inc. Report has come under greater scrutiny in recent months.
The company was one of the big winners from the shift in the U.S. psyche during the covid-19 pandemic as tens of millions of workers suddenly became untethered to the places they once called home.
Between the movement toward working from home and the mass layoffs that ensued during the economic downturn, in a way many working Americans were able to experience a level of freedom during the pandemic that they never had before.
Airbnb was one of the major beneficiaries of this societal shift.
“Something bigger than a travel rebound is happening. The world is undergoing a revolution of how we live and work,” co-founder and CEO Brian Chesky said during his company’s November 2021 earnings call.
“Airbnb makes it possible to work from any home. And this newfound flexibility is bringing about a revolution in how we travel,” Chesky said.
While the company was up over 4% through the previous 12 months from May 4 (the day the Fed rate hike started weighing on markets), it’s down about 6.2% year to date and has been experiencing some bad press lately.
Part of that bad press at the start of the pandemic was media stories about rentals being used as party houses.
In August 2020, Airbnb temporarily banned all parties and events listing across its platforms globally.
On June 28, the company made that ban permanent.
The Airbnb Party’s Over
Airbnb says that the temporary ban “proved effective” in the company’s efforts to be better partners in the neighborhoods on its platform.
“We focus on trying to deter the very rare cases of Hosts who do not operate responsibly, or guests who try to throw unauthorized parties. To that end, in August 2020 we announced a temporary ban on all parties and events in listings globally — which at the time was in effect ‘until further notice,'” the company said in a statement.
When the party ban went into effect, Airbnb estimates that 73% of its listings globally already had bans in their “house rules” and unauthorized parties have always been prohibited.
That policy didn’t stop parties from happening, Airbnb did suspend over 6,600 guests from Airbnb in 2021 for trying to violate the ban.
The ban includes a 16-person occupancy cap that can be lifted if the host has a large home that can house more than 16 people “comfortably.”
To combat these parties Airbnb relies on measures like a 24-hour safety line, a neighborhood support line, and a partnership with rival Vrbo to share information on repeat party house offenders in the U.S.
Airbnb’s Social Media Problem
As mentioned earlier, Airbnb could use some good press.
The housing market is tight for long-term renters in most major American cities. Scarcity is driving up prices as speculators turn lodging into investment vehicles.
People on social media have started to notice.
But the online battle against Airbnb isn’t just about its economic impact. Twitter users were also taking the company to task over the product they offer.