Airbnb customer wins $1100 refund for holiday cancelled by Covid-19

Sue Hogg booked three nights’ accommodation for her and her husband in Auckland in August 2020. But two days before they were due to arrive at the Airbnb apartment, Auckland went into lockdown and the Bay of Plenty couple had to cancel their booking.

The host initially offered a 50 percent refund or to transfer the booking to a later date, Sue said. However, they later withdrew this offer. Airbnb also declined to provide a refund.

When Sue advised Airbnb she’d lodged a claim in the Disputes Tribunal, it offered her a $931 voucher, provided she agreed to withdraw her claim. Airbnb sent her a 1300-word agreement to sign, waiving her rights to take any future claims against the company in relation to the dispute.

Airbnb’s conditions were “over the top”, Sue said. She didn’t sign the agreement and continued her case in the tribunal, naming the property manager and property owner as respondents.

“This Airbnb Payment Agreement is full and final settlement between Airbnb and myself of any and all claims by or on behalf of myself, and of any other claims, counterclaims, appeals, rights and/or obligations, past, present or future whatsoever arising out of or in any way connected with the facts and/or subject matter of the Subject and whether between the parties to this Airbnb Payment Agreement (including an Airbnb group company) or between any of such parties and any third party.” - Extract from 1300-word agreement Airbnb wanted Sue Hogg to sign.

Tribunal orders full refund

At a hearing in February, the tribunal referee held Sue was entitled to a full refund from the property owner.

“As the lockdown made it impossible for Mrs Hogg to obtain a benefit from her contract, the contract must be regarded as frustrated,” the referee said.

A contract is “frustrated” when it’s impossible to perform for reasons outside the control of the parties. If the contract doesn’t state what happens in these situations, the Contract and Commercial Law Act entitles consumers to a refund, less any reasonable expenses incurred by the company.

The referee found the property owner had failed to provide evidence of costs they’d incurred.

The owner claimed Sue hadn’t cancelled the booking in time to enable the accommodation to be re-let. However, the referee rejected this, finding adequate notice was given on the day the lockdown was announced. “If there was demand [the owner] could have found another booking. I see no unfairness to [the owner] on this ground,” the referee said.

The tribunal also found the owner had failed to provide evidence of the contract terms offered to Sue when she made the booking.

The owner provided copies of Airbnb policies and contract terms limiting refund rights. This included Airbnb’s policy that customers unable to travel due to Covid-19 restrictions couldn’t claim there were extenuating circumstances and request a refund for cancelled bookings.

However, the referee rejected this evidence, stating “without the actual text of what was set out on the [Airbnb] website and evidence of agreement to the terms by Mrs Hogg I find that she did not agree to them”.

Airbnb complaints

Complaints about Airbnb jumped after the Covid-19 lockdown in August.

Airbnb customers who contacted us said they were denied full refunds when they had to cancel bookings due to lockdown restrictions. Some were left hundreds of dollars out of pocket.

In November, we made a complaint to the Commerce Commission asking it to take court action against Airbnb for imposing cancellation terms we think are unfair.

If you’ve been unreasonably denied a refund by Airbnb, make a complaint to the commission. Let us know too.

You also have the option of lodging a claim in the Disputes Tribunal against the Airbnb host.