In this video Enrico Schaefer examines Airbnb’s revised Extenuating Circumstances Policy (ECP) that takes effect in January 2021. He begins by noting the policy’s headline change – pandemics and epidemics are now listed as covered events – and contrasts this with earlier statements that COVID‑19 would no longer qualify for refunds. Schaefer walks through the new policy language, highlighting the categories of “declared emergencies,” “epidemics/pandemics,” “government travel restrictions,” “military actions,” and “natural disasters,” while also enumerating the explicit exclusions (personal illness, jury duty, event cancellations, transportation disruptions, etc.). He critiques Airbnb’s drafting style, arguing that the language is deliberately vague, giving Airbnb unlimited discretion to approve refunds without transparency or evidence sharing with hosts. Schaefer explains how this discretion conflicts with basic contract principles: the host‑guest agreement is fixed at reservation time, yet Airbnb can retroactively alter its terms. He references Airbnb’s Terms of Service, pointing out illusory contract clauses that grant Airbnb sole discretion to issue refunds, which he argues are unenforceable under law. The video also raises practical concerns for hosts – lack of vetting, no requirement for guest‑provided proof, opaque arbitration processes, and the difficulty of defending against refunds. Schaefer concludes that despite superficial improvements, the new ECP still fails to provide clear, accountable rules for hosts and calls for continued pressure on Airbnb for transparency and enforceable contract terms.
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All right, so the big news last week was this concept that Airbnb was going to change its extenuating circumstances policy for 2021, starting in January 2021. And obviously this is one of the things that we've been fighting for. On behalf of hosts is to either really restrict, eliminate, or have the ECP completely redrafted because as it currently stands, it's just illusory. It's a promise of nothing where Airbnb can simply do whatever it wants with no accountability and no transparency. So it's exciting news that Airbnb is making a change to its policy, but it's probably time to dig in and see what exactly was changed. Now, One of my favorite channels on YouTube is Airbnb Automated. Sean does a great job of breaking stuff down, digging in deep. He's got resources to be able to tap into to find out what's going on with Airbnb. So let's take a look at this little clip from Sean's analysis of the ECP, which was done a week ago, and then take a look at what the language looks like today from the new ECP starting in January.
That are checking in January 30th still will have to deal with the new policy, so you're good to go there. Airbnb did address one question, which is what happens if the COVID-19 flare-up happens again? Well, Airbnb did remind everyone that only reservations made before March 14th are subject to refund for the pandemic, that anybody booking now After March 14th, 2020, understands that there's a pandemic, understands that coronavirus is real, and they are traveling and accepting the risks of that. So coronavirus will no longer be a reason that somebody can quote a pandemic as a reason for cancellation. It'll have to be a new event. Now some of you may think that this is too—
All right, so let's take a look at that. So basically what Sean is saying is based on what he was told a week ago, pandemic COVID-19 events will not be a reason for a refund after January of 2021. So, let's take a look at the new policy and see what's there. So, let's take a look at what events are actually covered here in this new policy. So, this is pretty interesting stuff. So what Shawn has indicated is that epidemics will not be covered after January 1st, 2021. It may have been what he saw last week, but I will tell you that in the version that I'm looking at today, declared emergencies and epidemics are events that are covered as long as they are situations that occur after There's a lot of room for interpretation here. One of the problems we have with Airbnb is like, just say what you mean. You've got high-priced lawyers. Use plain English, right? Tell us exactly how this is supposed to work. And the reason that they don't is they want to maintain ultimate discretion to do whatever they want and say, oh, well, that's not what we meant when we wrote that. We meant something, whatever is convenient at that particular moment. So let's take a look. What events are covered after January 20th, 2021 under the Extenuating Circumstances Policy? All right. So this is the first thing that I just find interesting. I always point it out, but that these are cancellations when unforeseen events beyond your control arise after booking, after booking, and make it impracticable or illegal to complete your reservation. So Cancellations for unforeseen events. Now, isn't it interesting, Airbnb on its website has this article about travel insurance, and it's telling guests who are asking about COVID-19 refunds and whether or not that's gonna be covered by their travel insurance, what Airbnb advises its guests is travel insurance generally doesn't cover foreseen events. One that has already started or has reasonable expectation of taking place. Okay, so over here they're saying that a pandemic is an unforeseen event, and that's why it's included. Over here they're saying that known or foreseen events like COVID-19 and fear of travel are likely excluded from most policies. They're saying that COVID-19 is a foreseen event. They're telling travelers they're not likely going to have coverage for their travel insurance, right? Because, hey, pandemics are totally foreseen. People, they may be unusual, but everyone knows they can happen and they do happen, and therefore it's not an unforeseen event. Now, over here they're saying, oh, we have this extenuating circumstances policy. For unforeseen events. So on the other side, for hosts, they're telling hosts pandemics are unforeseen, therefore you have to allow us to use our discretion whenever we want for whatever reason to issue a refund. So I always find that really ironic, and it is a great example of how Airbnb plays both sides against the middle, how it simply drafts language which provide it unlimited authority to do whatever it wants. It makes it impossible for the, for the host or the guest, especially the host, to be able to know what they've agreed to when they start using the platform. All right. So when this policy allows for cancellation, it controls and takes precedent— precedence over the reservations cancellation policy. So one of the problems that we have with all of this is The contract between the host and the guest occurs at the time of the reservation. The extenuating circumstances clause, assuming that any of it's even enforceable— assuming it's enforceable— could only be a contract term as of that date of reservation. Airbnb still seems to believe that it can make any modifications it wants to the ECP after the rental contract is finalized, after a meeting of the minds between the host and the guest. After that contract is a final contract, and Airbnb as a third party, not a party to that contract, could come in at any time and change the terms of that contract to whatever Airbnb sees fit. Now, again, we see this from Airbnb all the time where they very cleverly draft things to provide them this kind of ultimate authority to be able to intervene in your rental contract To do whatever is best for Airbnb, right? To do whatever is best for Airbnb. And no one is naive enough to think that that's not what's happening here with these COVID-19 refunds. Airbnb is positioning itself against VRBO and Booking.com that respected the contract between the host and the guest and simply applied whatever the cancellation refund policy was between the host and the guest. Airbnb saw an opportunity. So that when travel returned, trying to build affinity with those guests so that they'd come back to Airbnb. Because guess what? Turns out really travelers aren't loyal to any particular platform. They're going to check most of or all of the platforms. So Airbnb is constantly trying to build this core foundation for its business of affinity with travelers, and it hasn't worked to date, but they keep trying. And they saw COVID-19 as an opportunity So what events are covered? An event is one of the following situations that occurs after booking. Okay? So if it occurred before booking, then it shouldn't apply. COVID-19 already is there, so it should maybe not apply. And maybe Sean's correct. Maybe that's the way Airbnb intends on applying this, but it's a very important question. And one that really hasn't been answered. Declared emergencies and epidemics. So, Shawn is right, a lot of the personal circumstances have been removed from the new version of the ECP. But what's been added is declared emergencies, which we're gonna talk about in a second. And what has been added now is epidemics, which, as you recall, were not included in the ECP policy prior to March of 2020. So government-declared local or national emergencies, epidemics, pandemics, and public health emergencies. Very broad language. California is constantly under a declared emergency, but the concept that you can cancel in LA if there's fires in Northern California makes no sense, yet Airbnb does that all the time without If there's a hurricane that hits Louisiana and, oh, now it's going to rain in Austin, Texas, Airbnb will grant that refund to the guest even though the hurricane has nothing to do with Austin, Texas except for some incidental weather. So what we're seeing here is some improvements in the language, but really we're a long way from the finish line here. All right, so government travel restrictions, military actions, natural disasters. What is not covered? This policy only allows for cancellation for events described above. Everything else is excluded. So we need to know what everything is and what everything else is off the list, and that means they have to be much more clear with their language. Examples of situations that this policy does not allow cancellation. include unexpected disease, illness, or injury. So these are the personal circumstances that a guest might have. If they have an unexpected illness or injury or disease, it says it's not covered. Yet if it's a pandemic, it is covered. How is this supposed to work? And since they never tell the host why they provided the refund or show the evidence, Right? How is the host ever supposed to know what was said by the guest to support the refund? And Airbnb simply doing whatever it wants with no transparency. No longer covered government obligations like jury duty or court appearances or military duties, which is kind of interesting because we all love the military, right? Travel advisories or other governmental guidance that falls short of a Prohibition. Cancellation or rescheduling of events for which a reservation was made. And we have so many examples where guests told the host, my event got canceled, now I have no reason to come and I'm canceling. That was never a reason for a refund, and yet Airbnb without fail granted the guest a refund in every case that I've seen. Okay. And not covered transportation disruptions unrelated to a covered event, like road closures, flight, train, or bus or ferry cancellations. Right. So here they're saying what is not covered. So this is helpful. We need a much larger list. We need to know how the timing works out. We need to know how are they gonna apply this. If someone makes a reservation a month ago, For February of next year, are they going to be applying this policy? Are they going to modify my contract with my guest? And what if they change it yet again and yet again between now and then? That is a violation of basic contract principles. Why Airbnb continues to think that it needs to put a policy in place which doesn't respect contract rights is really hard for me to understand as a lawyer because this is basic simple stuff, right? Why not draft the ECP so the ECP at the time of the reservation is the one that gets applied? And the answer is probably because they don't want to staff that. They don't want to have to figure it out, right? They don't care about contract principles. They're going to do whatever is best for Airbnb. And what's best for Airbnb is to be able to tell the customer service people, well, look at this document today. You don't have to look at when the reservation was Look at this document today and apply it. All right, so here's the really big problem with the new ECP. It still provides zero accountability and zero transparency. So what does it matter what is on this list if Airbnb has no obligation to vet the claim by The guest to make sure that it's legitimate. It never has to tell the host why it's providing the refund or show the host the evidence or support the claim for a refund. And there's nothing you can ever do about it except file an arbitration, which Airbnb is going to fight. And you don't even know why they did what they did, so you're filing an arbitration based on your guess that it wasn't covered. These are huge disincentives to to ever be able to enforce your contract rights here. So these are really big issues, really big issues. And so what is the policy in terms of what their vetting is? What proof has to be submitted? Are they gonna do another thing where as long as you say the word COVID, you can automatically get a credit and there's zero review? Are they going to report to hosts what the evidence is that's submitted? Why are they even acting as an arbiter of these issues? Why not let hosts and guests work these things out as part of the cancellation policy they agreed to in their contract? So really interesting that they've decided to make this change. Really hard to know what it's going to mean, if anything, on the ground. ground without accountability and transparency. So let's take a look at a couple other things that I think are really important to take a look at when we're dealing with this, right? So if you take a look at the terms of service, at least as of November 2019, which probably apply to all of this, what Airbnb says in its terms of service is Airbnb may decide in its sole discretion that it's necessary to refund a payout. In its sole discretion. Well, what that's basically saying is that your cancellation policy is completely meaningless. They can do whatever they want, whenever they want, for any reason, and they don't have to tell you why. That's a textbook illusory contract term, and I am telling you that is not enforceable. under law. And that's what Airbnb's lawyers have relied on. This is the language that they've relied on with the arbitrator as supporting their refund. And I'm here to tell you it's not going to fly. This next sentence says, this may be for reasons set forth. So that's interesting. This is a good, really good language if you happen to be Airbnb, right? So it's in our sole discretion. And here's what we— what may support that. And they say what may support a refund is the extenuating circumstances policy. Well, this should say that Airbnb may provide a refund if and only if the guest provides supporting evidence under the Airbnb extenuating circumstances policy. A decision is made by Airbnb. There's some standard report that is provided by Airbnb to the host advising of what the claim was, what the evidence was, and providing some sort of feedback from the host because the host has been dealing with that guest. And in many instances, the guest has already admitted that it has nothing to do with anything that could be listed in the extenuating circumstances policy. So these are the types of things that, that would make this claim potentially enforceable, that don't exist. The second part of this says, if Airbnb believes in good faith while taking the legitimate interests of both parties into account, this is necessary to avoid significant harm to Airbnb, other members, third parties, or property. They've never relied on that for COVID-19. I don't even know what that means. Again, illusory. It has to be a definite contract term. You have to know what you're signing up for, what you're agreeing to. So This is the extenuating circumstances policy that exists prior to March of 2019, and so this is the one that we're litigating in arbitration. In rare circumstances. Now, keep in mind, when a guest makes a reservation with you and they select your strict or super strict cancellation policy, they are never presented any information about the They are agreeing under your rental contract to your cancellation policy. That's it. There's nothing in the process of renting by a guest which puts any, any link or any information about an ECP or a way to get around the cancellation policy of the host. But in any event, Airbnb says in rare circumstances. Okay. And if Airbnb determines that it falls within the ECP, Airbnb may provide a refund. What might be covered— again, this kind of loose language really bothers me because, no, tell us what is and tell us what is not covered. That's a contract term, right? That's how you have a contract. Might, may, will, whatever, sole discretion— these things don't provide any certainty to hosts. Okay, so a valid extenuating circumstances as of March of last year was— and you'll notice you won't see the word epidemic here, only an endemic, which is the opposite of a pandemic. Lawyers for Airbnb, in drafting this policy, decided pandemics were not going to be covered, and then they ended up deciding the opposite when they saw a competitive advantage over Booking.com and VRBO and tried to shove it down your throat to existing reservations that had already been finalized. All right, so that's really important to understand the changes, to understand what is being proposed for January of next year, and why it is we need to keep pushing on Airbnb for clarity, transparency, and accountability. My name is Enrico Schaefer. We'll see you next time.
