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Airbnb Hosts Are Hurting From Cancellations Due to COVID-19

Many are unhappy with the company's policy on cancellation and refunds.

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Photography: Francesca Tosolini | Unsplash

The hospitality industry has been hit hard by COVID-19 and the ensuing quarantines. Not only are people afraid to leave their homes, they virtually can’t and shouldn’t, as numbers of those infected by the virus continue to rise. Airbnb has particularly suffered loses, but even more dire is the situation of its hosts.

Many Airbnb hosts see renting their spaces out as a primary source of income. Now that land, sea, and air travel have been postponed and quarantine is enforced in several countries, guests are understandably canceling reservations; however, many hosts are saying that the company’s policy on cancellations are putting the brunt of the burden on them.

Airbnb’s COVID-19 cancellation policy

Part of the company’s cancellation policy reads:

“Reservations for stays and Airbnb Experiences made on or before March 14, 2020, with a check-in date between March 14, 2020 and May 31, 2020, may be canceled before check-in. This means that guests who cancel will receive, at their option, travel credit or a full cash refund, hosts can cancel without charge or impact to their Superhost status, and Airbnb will either refund, or issue travel credit in an amount that includes, all service fees.”

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For hosts, this means that they need to refund cancelled reservations in full. Moreover, there have been complaints that some guests are citing the coronavirus as the reason for their cancellation, only to book at a cheaper place. Reportedly, there is no way of verifying which guests are getting full refunds for a valid reason, and which ones are just trying to abuse the system.

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Airbnb’s compensation

Faced by backlash from its hosts, Airbnb released $250M USD as compensation. According to this new policy, Airbnb will pay hosts who have been canceled on “25% of what you would’ve received for a cancellation based on your cancellation policy. For example, if you would normally receive $400 USD through your cancellation policy, we'll pay you 25% of that — or $100 USD.”

While hosts appreciate the gesture, many are worried that it won’t be enough.

According to data company AirDNA, while many vacation rental services remain open, demand for them is dropping. Airbnbs in major travel hotspots like Shanghai, Beijing, Seoul, and Tokyo have been losing revenue in the past months, and in general, the entire industry is hurting: when comparing the number of bookings between the first week of January and the first week of March, Beijing bookings have dropped 96%, Shanghai by 71%, Seoul by 46%, and Tokyo by 29%.

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Airbnb hosts have no choice but to cope. According to the Financial Times, several hosts have started offering medium- to long-term rentals to recoop costs. Those who are located near hospitals are offering lower rental rates for frontliners.

There’s no telling when the industry will get back on its feet, since the latest data shows that bookings continue to dwindle while cancellations are skyrocketing. Probably the only silver lining is that with some parts of Asia slowly recovering from COVID-19, business may start trickling in. For now, Airbnb hosts may need to buckle down and find other ways of getting spaces booked.

Sources: Inquirer.net, Financial Times

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