Airbnb –Hosts left without pay-out and guests receiving full refund

Since 11 March 2020, the day the World Health Organisation announced that the world was suffering from a pandemic known as COVID-19, we have been in a state of flux.

As global travel and tourism grounds to a halt, Airbnb hosts face a very uncertain time. The ban on travelling and the home-isolation rules restricting individuals from leaving their home, has brought a halt to short-term, mid-term and holiday rentals. As a result, hosts no longer have the monthly income they once benefited from.

In response to the travel restrictions, Airbnb announced an amendment and an extension to their policy for “extenuating circumstances”: all guest that had booked a stay before 14 March 2020 for stays on or before 31 May 2020 are eligible for a full refund. This amendment overrides any cancellation policies put in place by the hosts themselves.

Prior to this change in policy, Airbnb hosts had to choose from 1 of 6 cancellation policies which ranged from flexible to strict. The flexible policy permitted guests to cancel until 14 days before check-in for a full refund. The “super strict” policy required guests to cancel 60 days before check-in and they would only receive 50% refund of the nightly rate, not including the service fee.

Airbnb have stated that the reason for the updated policy term was that they “did not want guests making the decision to put themselves in unsafe situations and creating a public health hazard because of a commitment to their bookings”.

The change in policy, which was made without consultation with the hosts, means that many host cancellation policies (that ensured they still received a partial payment for those bookings) will no longer apply and guests will not be required to pay the hosts upon cancelling a booking.

So where does this leave the hosts? What measures have been put in place for the hosts who are suffering hardship as a result of this change?

As a result of the change in the policy, there has been an outcry by hosts angered by Airbnb’s decision to assist guests and not the hosts who are suffering financially due to the changes made to their policy.

In response, Airbnb have now set up a $250 million (circa £200 million) fund to grant relief to hosts suffering from cancelled bookings and to assist them through this difficult time. The programme permits hosts to claim 25% of their cancellation compensation when a guest has cancelled their stay during the specific period. The payments will be issued in April.

Host will therefore receive 25% of the cancellation fee only, if a guest booked before 14 March 2020 to stay on or before 31 May 2020.

For any reservations booked after 14 March 2020 hosts cancellation policy will remain in effect and the amended policy will not apply. This may however change in the coming weeks.

We are currently offering a 30-minute free consultation for COVID-19 related matters and concerns. If you are a host and have any Airbnb related matter that you would like to discuss, please contact us and we would be happy to assist.