Special Report: Price gouging alleged by AirBnb hosts

By ALAN SMASON

A report by AirbnbWATCH, a consumer watchdog group and an affordable housing advocate, is highly critical of local AirBnb hosts, whose rates for this weekend and through Carnival Day have shown unacceptable attempts to gouge the public by charging rates as much as 2007% higher than on other days in the year.

AirBnb has been charged with allowing its hosts to overcharge customers in town for Mardi Gras. (Photo via Wikimedia)

The report was issued on Tuesday and it showed prices for rentals of rooms, apartments and houses for Mardi Gras weekend and into Fat Tuesday that were taken directly off the AirBnB website.

“During Mardi Gras, an apartment in downtown New Orleans, which is normally rented for $299 per night, was being advertised for $1,800 per night for the weekend and Fat Tuesday. A typical three-night stay at that apartment would cost a total of $897, but the same length of stay during Mardi Gras would cost more than $5,400,” the report was quoted.

Similar price gouging was alleged last week in Milwaukee during the period just prior to and during Super Bowl LII held there.

Airbnb’s price gouging was a dream killer for many football fans during the Super Bowl and the company is continuing that practice with folks looking to celebrate Mardi Gras in New Orleans,” said Lauren Windsor, the group’s spokesperson. “Permitting their hosts to raise rent by these astronomical rates is a very worrisome precedent that Airbnb is setting at these widely attended events.”

Typical hotel rates run from $279 to $299 per day with most hotels requiring a minimum three-night stay. Two AirBnB private rooms that sold at $49 and $59 per night jumped in price by approximately $950 each, making the percentage increase jump between 1,685% and 2007%.

A room that is going for $299 per night next week is selling for $1,800 per night this week. Still another room that will be $188 next week is being offered through AirBnB for $1,600 per night. That’s an increase of more than 750% or $1,412 per night.

Chris Lehane, AirBnb’s Head of Global Policy and Public Affairs has publicly denied any price gouging on behalf of his hosts. “It’s pretty clear that our hosts don’t engage in gouging,” he was quoted in a recent newspaper article. “When demand for Airbnb increases, supply also tends to increase. When you look at big events, like for a Super Bowl weekend, there’s maybe a $20 increase.”

Windsor states this makes two weeks in a row that AirBnb hosts in two separate markets with major events have engaged in what she believes is unscrupulous gouging.

“Bottomline, the documented facts in this report expose AirBnb’s hypocrisy for a second time,” she said.

Affordable housing advocates claim that AirBnb diminishes the value of neighborhoods by replacing longtime residents with short-term tourists who do not contribute to the growth or support of the neighborhoods.