Airbnb's Coronavirus Cancellation Policy Leads to Backlash and Hosts Exploring Alternatives
Late Saturday, Airbnb updated their ever-evolving coronavirus policy to offer free cancellations for all guests worldwide until April 14th, regardless of the cancellation policy the guest committed to.
Virtually overnight, millions of dollars of bookings disappeared for hosts and STR managers all across the globe.
Airbnb leadership sent this email out to hosts:
Hosts, Managers, and Property Owners Will Suffer The Most in Short Term From This Decision
The global coronavirus pandemic is an extremely difficult and unfortunate situation for everyone involved. It is no one party's fault, but it's clear who is going to suffer the most financially from this unexpected event: Hosts who sacrifice additional revenue with "strict cancellation" policies in order to have guaranteed income, are left holding the bag. Many of the hosts who use strict cancellation policies, need the certainty of income to pay mortgages, taxes, utilities, maintenance, and rents. The guaranteed income they thought they had were wiped out over night.
Many Airbnb Hosts and Managers on social media are livid that they are taking 100% of the loss due to an extremely unfortunate situation. What about travel insurance companies? Shouldn't they help cover the cost of this global pandemic? Why is Airbnb letting these wealthy insurance companies off the hook that some of their customers use? Why doesn't Airbnb have their own insurance to cover the black swan scenarios. After all, isn't the point of insurance, to protect parties against events outside of their control?
Hosts and managers are taking to social media to vent their frustrations:
Here are just a few examples of the zeitgeist:
This Decision Shouldn't Come As a Surprise...
Let's face it, Airbnb is smart. Focusing on keeping the demand side happier than the supply side is the same strategy Uber has successfully pursued to dominate the ride share market: Keep Uber riders happy and treat the drivers as replaceable. Revenue growth and customer demand is the name of the game. If less drivers want to put up with encroaching policies, then ride prices and driver prices will rise.
Airbnb has been able to strike a decent balance over the years in order to stay out of news headlines for mistreating hosts. However, taking the guests' side in gray area matters has always been at their core strategy. With high demand, there will always be hosts willing to put up with policy decisions like this in exchange for the business.
... And Hosts Will Likely Benefit in the Long Term From This Decision...
Hosts that are hurt need to realize this will keep the platform alive and give them business later. Nobody will use Airbnb in the future if their refund policy is way more restrictive than a hotel. It already is in most cases, but now that the world around us is canceling everything the tourists may have been traveling for, something needed to happen.
...However, Sudden Changes in Cancellation Policy Inspire Doubt in Other Airbnb Policies & Airbnb's Long Term Commitment to Hosts....
"Hosts are upset because they have been deemed underserving of an income whilst everyone else is entitled to their money because “times are tough”. They are upset because their cancellation policy’s have been overruled and the trust they have placed in Airbnb has been abused." - Airbnb Host on Reddit
The way Airbnb has handled this difficult situation has opened host and managers' eyes to the reality that Airbnb has the ultimate control and power over their destiny. For example, the original end date for this policy was April 1st, but Airbnb quickly extended it to April 14. How many more times will they keep pushing out this deadline? Questions like this domino into asking other tough questions. For example:
Will Airbnb's Million Dollar Insurance actually protect me in a worst-case scenario, or will they find a way to weasel out of that too?
Will there one day be a team of Airbnb bureaucrats whose sole job it is to de-platforming users if they don't agree with their personal views?
When Airbnb is publicly traded will they increase service fees in order to become profitable?
All of these are questions that hosts and property owners are starting to think about during this tough time.
Airbnb Hosts and Managers Are Making Threats About Leaving The Platform...
...But Will They Actually Outright Leave Airbnb?...
I doubt any of these people complaining on Twitter will follow through with leaving Airbnb or even suing them for this decision. In an already tough time, how could they give up the potential extra income? They are forced to continue with Airbnb, for now.
....No, But They Will Start To Explore Alternatives...
In Reddit and twitter threads, hosts provided other platform recommendations. Here are the alternatives that were mentioned.
#1: Offer Discounts to Repeat Guests Who Book Outside of Airbnb
Whereas before, many hosts took repeat guests through the Airbnb platform out of convenience and loyalty, more hosts will begin to collect their guests data and completely own the future relationship with the guest. Hosts feel that Airbnb has shown no loyalty to them, so why should they show Airbnb loyalty back? In order to truly control their own destiny, managers and hosts realize they need to own the relationship.
Not every travel company is offering exceptions for coronavirus cancellations. VRBO, Airbnb's biggest competition, has not offered any coronavirus exceptions to its cancellation policy.
In a March 14th letter, Vrbo president Jeff Hurst recommended that travelers reach out to homeowners to request a penalty-free cancellation. Addressing homeowners in a letter on March 12th, Hurst suggested that they remain open to such requests. "In the spirit of good hospitality," he wrote, "we strongly encourage you to offer a full refund."
You may have used Booking.com to book a traditional hotel room, but the site actually accepts homes, guest houses, and apartments, too. The platform sees more than 1.5 million nights booked worldwide every day, with 68% of those being families and couples (probably not loud, late-night partiers!). It also comes with complimentary search engine marketing to get your listings seen.
Like other platforms, you can set house rules, customize your availability calendar, and create security and damage deposits, just in case. There’s also guest misconduct reporting if anything goes awry.
To list on Booking.com, you’ll just pay a commission per night booked. (It varies by area, but in my city, it’s currently at 15%).
Owned by TripAdvisor, FlipKey is another vacation rental platform to put on your radar. At just a 3% fee per booking, it’s also one of the more affordable options out there. Eligible properties include everything from single rooms to full homes, houseboats, and more.
As a nice little bonus, sometimes FlipKey’s listings are displayed in TripAdvisor’s search results. If someone is on that site looking for flights or hotels in your city, there’s a chance your property could pop up there and snag you an extra booking.
#5 Private Porch
I can't vouch for this company, but it's another alternative that came up in Reddit a few times.
"Private Porch is the new way to share your place with the people you know and trust. Whether you list your vacation home or spare bedroom, you can now join the homesharing movement on your terms, and be completely in control. Build a small guest list and grow from there. Share with family and friends, trade with owners, or just earn a little extra income. You decide" - Private Porch's Website
Have any other recommendations or thoughts on this topic? Comment below 👇