Airbnb & Homestays: The Legal Challenges

Airbnb & Homestays: The Legal Challenges

In just a few years Airbnb, Uber and Lyft have become leading services providers to the meetings industry. As they grow in popularity, meeting organizers must adjust to account for their prevalence and their impact on the usual methods of doing business.

Airbnb and other homestay services are impacting meetings the most. As attendees turn to homestays in greater numbers, groups use fewer rooms and planners face an increasing risk of rooms attrition at their contracted meeting hotels. 

To lessen the threat of attrition, the natural reaction is to lower the group’s room block. But while a lower block reduces the risk of attrition, it also reduces the anticipated rooms revenue to the hotels. This effect will likely make the hotel less willing to provide complimentary function space and other concessions often provided to large groups.

There is no legal “right or wrong” to this scenario. As with many aspects of a meeting contract, it’s up to meeting planners to negotiate with hotel partners to secure the costs and concessions they desire. Realistically speaking, however, groups seeking lower room blocks must also consider requesting less complimentary function space. Otherwise they should be prepared to pay for some of their function space needs.

Groups using convention centers may also face additional costs for meeting space if they lower their room blocks. If the homestays do not pay the local lodging tax, guests staying in homes rather than hotel rooms lower the value of the meeting to the government authorities that run CVBs and convention facilities. 

That should not be the case in cities where homestay guests pay the same lodging taxes as hotels, however. In those places, since governments are receiving the same tax revenues from homestays as hotels, subsidized meeting facilities in convention centers should continue to be provided in equal quantity.

Homestays bring unique legal challenges in addition to affecting room blocks and concessions.  Most attendees booking Airbnb and similar lodgings do so on their own, so it is commonly thought that they bear their own risks if something were to go wrong.

That is sometimes true.

But it is also true that planners and meeting host organizations may still be subject to liability for injuries, losses and other harms suffered by attendees arising from homestays. This is because many attendees expect planners to check everything out and anticipate problems, even if there is no relationship between the meeting group and the homestay. The best policy is for the planner to acknowledge the risks associated with homestays, and take reasonable steps to prevent them.

Planners should consider following these tips if attendees might book homestays:

  • With meeting registration materials, provide answers to questions such as (i) Are homestays legal in the meeting location? (ii) What rules and regulations apply to homestays, such as minimum stay requirements? (iii) What are the minimum fire alarm and safety requirements that attendees should look for? (iv) Which hidden fees should attendees watch out for, such as security deposits, cleaning fees, and booking fees? and (v) Which neighborhoods are particularly convenient and safe for meeting attendees needing to travel to/from the meeting venue.
  • Check with local CVB’s to confirm details about homestay legality and preferred neighborhoods.
  • Create a list of “endorsed” properties recommended by the CVB, which meet minimum criteria in terms of safe neighborhoods, easy transportation to the meeting venue and preferred amenities. These endorsed properties might also agree to pay a booking rebate back to the meeting host.
  • Adjust room blocks to account for attendees using homestays. Many properties will allow a contract clause giving the planner the right to reduce the room block by up to 10% several months before the meeting, if demand does not meet expectations. Be forewarned that a significant rooms reduction may require a similar reduction in function space—it also depends on what the terms that the parties negotiate.
  • Consolidate hotel space to fill rooming needs with fewer properties, and choose hotels—particularly for overflow—with no room block commitments if possible.
  • Place a “disclaimer” in meeting registration materials making it clear that the meeting host and organizers will not be responsible for guests choosing accommodations outside the official room block.

Final Note: This article is not legal advice. It is a discussion of issues intended to help professional meeting planners and suppliers consider their circumstances and draw their own conclusions. Legal advice can only be rendered after a discussion of your particular fact situation with an attorney competent in meetings law.

Posted by Joshua L. Grimes, Esq.

Grimes Law Offices, LLC
123 South Broad St., 28th Floor
Philadelphia, PA 19109

Josh is a Philadelphia-based managing attorney of Grimes Law Offices, LLC. He provides legal aid for associations and meeting professionals, and also works as a speaker and corporate trainer.

blog comments powered by Disqus