Prior to the start of the pandemic, Airbnb had seen rapid growth over the years since the company was founded in 2008. The company quickly took over the short term rental market to become a household name amongst vacation goers. They had been valued at $31 billion at the end of 2017 and were eyeing to go public by the end of 2020. Airbnb had over 50.2 million site visits in January 2020 alone. Since the start of the Coronavirus however, the company's value and reputation have taken a massive hit. The total value of Airbnb had dropped to $18 billion by the end of April this year, forcing the company to lay off 1,900 employees in April as well.
It doesn’t stop there. On March 11th, Airbnb announced changes to their refund policy, stating that “Reservations for stays and Airbnb Experiences made on or before March 14, 2020, with a check-in date between March 14, 2020 and July 31, 2020, are covered by the policy and may be canceled before check-in.” The deadline was originally set to March 31st but has been extended through July 31st as of now. This has angered hosts across the country, as many had to scramble to pay back the costs.
“Airbnb has been brutal to their hosts, they have 100% sided with the guests and just refunded no questions asked. It has been super painful,” Managing Partner of BeachHaus Rentals Brenda Sampiere said.
“They haven’t even required the guests to cancel in a timely manner, they should’ve given the guests a proper deadline to cancel instead of pushing the deadline back again and again. Airbnb has been horrible to the host.”
With no time at all to fill the spots that were previously booked, hosts lost thousands of dollars in the span of days after the policy had been changed. The company overruled the hosts previous cancellation policy that was set forth by the host.The sudden shift has led to hosts switching sites, posting their properties on competing websites such as HomeAway and Vrbo.
“These companies are the middleman between those interested in the property and the hosts themselves.They aren’t dealing with the customer directly like a normal hotel would. Their mere existence is dependent on the fact that they have a balance of hosts and guests on both sides.
"People right now don’t trust Airbnb as they can just keep extending the deadline forever in their eyes.”
"People right now don’t trust Airbnb as they can just keep extending the deadline forever in their eyes."
Rufus Marin, Former Airbnb Property Host
Vrbo and HomeAway left the policy as is, they did enforce a 50% refund as opposed to Airbnbs 100% refund guarantee,``Former Airbnb Property Host Rufus Marin said. “The fact they have extended the deadline to June and July has given everyone on Airbnb at this point a complete lack of certainty."
In Response to the cancellations, Airbnb started a relief fund for hosts to compensate for their losses due to the coronavirus. On March 30th, the company announced a $250 million relief fund where the host would receive up to 25% of what the guest would’ve paid if they cancelled their reservation in a timely manner. If you would’ve received $1,000 on a cancellation, Airbnb will give you $250 as compensation. To some hosts, this is too little, too late.
“Airbnb blew that $250 million on nothing as this is far too little for many of us to survive. Maybe 10% of the hosts on Airbnb can survive on that kind of compensation,” Marin said. “It did not do anyone any good other than maybe emotionally being told thank you very much for your service. They could’ve used that money much more effectively by doing a loan program for hosts who had proven they were going to stay with the company.”
The fallout of the situation going on with airbnb has tainted host relationships beyond repair, signaling a transition to working with their competitors.
“I don’t plan to conduct business with Airbnb ever again, as a lot of hosts feel the same way,” Marin said.” We plan to conduct business with their competitors. They provide better service with case managers that are a lot more experienced than Airbnbs. Never again will I do business with Airbnb again.”
The confusion has led to guests waiting to cancel at the last minute to insure that they receive their full refund.
“They are allowing people to block your calendar to reserve that reservation only to cancel at the very last minute. A lot of guests are waiting to cancel because airbnb keeps moving the bar on when they can cancel. If I had a July reservation and I cancelled in May, I wouldn’t get any of my money back. If I cancelled the day before, I can get all my money back,” Sampiere said. “ The fact that they are moving the bar forward is actually pouring salt on the wound as they are delaying the guest from cancelling. This whole process is blocking your calendar so that you can’t get a guest who wants to come in and actually stay and pay.”
Forced to act, property managers decided to come up with ways to ensure that they could get some clarity on who was serious about the reservation.
“What we did at BeachHaus was literally proactively contact every future reservation and just say we would gladly refund you, no questions asked. If there was a likelihood of the guest cancelling, we would ask them to please cancel now so we could ensure that our calendars were as accurate as possible,” Sampiere said. “ We tried to get ahead of that curve, you can’t wait to
the last minute to refund people because you can’t re-rent a place until that reservation is cancelled.”
Due to travel restrictions on flying, hosts have decided to shift their marketing attention. Staycations or shorter distance vacations have been used to combat the loss of guests travelling from a far to stay at these properties. The idea of staying in a new setting with your family has been at the forefront.
“The travel industry has all sorts of restrictions right now on flying. What we are really pushing and marketing right now is the staycation.
We are grateful that San Diego is a drivable destination from places like Arizona, Nevada, and even the locals who want to stay near the beach,” Director of Marketing and Services for BeachHaus Rentals Georgia Gregory said. “We are a very family oriented business and we are showcasing that to our clients.”
Depending on where your properties are located, you will see varying levels of business.
“The vacation rentals that are in a desirable location that you can drive to have not seen the dip in business compared to those who are in obscure places,” Gregory said. “Prior to COVID, you could rent out unique experiences in small towns like Marfa with ease. However, due to these places being hard to get to, they have seen a decline in business.”
CEO of Airbnb Brian Chesky has recently stated that the travel industry will not go back to the way it was prior to the pandemic. In an interview with Axios, Chesky said “They're getting in cars. They're traveling to communities that are 200 miles away or less. These are usually very small communities. They're staying in homes and they're staying longer.”
There have been cleaning procedures implemented to also help mitigate the spread of COVID-19.
“It is just asking when the guests leave to keep the doors open to let the air ventilate through the property. Making sure the maids wear masks and gloves when they are cleaning and sanitizing everything in the houses,” Sampiere said. “We are also prepared for if we ever have a guest who tests positive, we are ready to contact everybody about that. Thankfully we haven't had to go through that yet. We are doing the best we can to ensure the safety of our guests and employees.”
For guests, this has lifted some concern on their own safety when they stay at these properties.
“They made it extremely clear on how much they sanitized and cleaned the place up before we checked into the property.” Airbnb Guest Isaac Swicker said. “ That made for a safe experience. The hosts did make it very clear that we couldn’t party or have an extra number of guests who weren’t previously listed at check in.”
These unprecedented times have shocked the travel industry as a whole, causing many to wonder if Airbnb will ever recover from this.
“Coronavirus just wiped out a whole industry overnight. It completely made people have to restructure the way they do business and unfortunately, a lot of people won't recover from the damage the coronavirus has done,” Gregory said.
Throughout the whole controversy, there are those who still have good faith in Airbnb and understand that they are human and are trying their best to satisfy everyone around them.
“Airbnb is truly an amazing organization and I applaud them for what they tried to do. I just think in the midst of that, they have forgotten that this is a three way relationship and they decided to side with the guest,” Sampiere said. “ They have preserved who they side with, but I also understand they had to lay off a bunch of employees, so I understand they too are trying to get through this.
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