Domio said it considers Airbnb a “trusted partner.” After Airbnb completes an investigation into Domio’s alleged misleading and shoddy business practices, let’s see if the feeling is mutual.
Domio, the short-term rental platform that operates quasi hotels, just lost a major distribution platform, Airbnb.
After an investigation by The Information uncovered a series of allegedly fraudulent practices, including fake host names and misleading Airbnb accounts, Airbnb indefinitely banned Domio’s host accounts and listings starting Tuesday.
“We have indefinitely suspended all of Domio’s associated host accounts and listings as we expand our investigation into their activity dating back to 2016,” an Airbnb spokesperson said. “We will not hesitate to take aggressive action to remove suspicious content from our platform and, depending on the outcome of our investigation, we will determine the appropriate long-term action to take against these accounts.”
Airbnb’s wholesale suspension of Domio’s presence on its platform means New York City-based Domio can’t accept new reservations pending the outcome of the investigation. Airbnb, which has community standards barring hosts from writing fake reviews, would then determine what long-term action to take.
After interviewing more than 20 current and former employees, and reviewing court records, The Information found “that Domio has a history of questionable business practices, which helped it flout short-term rental laws in cities around the country. Those practices include the listing of rental properties using a network of misleading Airbnb host accounts—some featuring fake names and stock photographs—which made it harder to tie them to Domio.”
Asked about the Airbnb suspension, a Domio spokesperson said, in part, “… the company is committed to working collaboratively with local governments to provide safe and secure housing, and to comply with applicable local ordinances. We are actively working with Airbnb to resolve any potential issues and consider them a trusted partner.”
Wouter Geerts, a Skift senior research analyst who has written extensively about short-term rentals, said Airbnb’s ban of Domio would be impactful because the company isn’t large enough to subsist on direct bookings alone.
“Domio has been trying to find its unique niche for a few years, recently pivoting from masterlease to a franchisee model,” Geerts said. “Specialised in urban rentals with hotel like standards, Airbnb would likely be a significant channel for the company, although it has other avenues to pursue. Not large enough to rely on direct bookings alone, it should be worried about Airbnb’s competitors like Booking.com and Expedia launching their own investigations.”
Though the end of 2019, Domio had raised some $62 million in funding, and $50 million in debt.
Photo credit: This is a short-term apartment rental that Domio managed at Caoba, a building in downtown Miami at 698 N.E. First Avenue. Airbnb barred Domio from making new reservations through Airbnb as of August 18, 2020. Domio