New strict cancellation policy update

Lizzie
Former Community Manager
Former Community Manager
London, United Kingdom

New strict cancellation policy update

Hello everyone,

 

The Airbnb team heard feedback from you and the host community about the upcoming change to our Strict cancellation policy. In order to address your concerns, we’re delaying the change until May 1, 2018.

 

Before the change goes into effect, we’ll share more about what we’re doing to address your concerns, particularly around protecting your listing details from being shared with guests who cancel. But for now, we’d like to clear up some confusion and help you better understand the new policy and how it will benefit the whole community:

 

Here’s how the new grace period policy will work—and some of the protections we have in place for hosts:

 

Limited-time refund within 48 hours after booking when the check-in date is at least 14 days away

Guests must cancel within 48 hours after booking and can only cancel if their check-in date is 14+ days away. This means that no matter how far out your guests book, they only have 48 hours from the time they book to cancel for free. We want to make sure that if guests change their mind, you have enough time to get another booking.

 

Three refunds per year per guest

To prevent abuse, guests are limited to three fully refunded cancellations a year.

 

No full refunds for overlapping bookings

To make sure guests are not making multiple bookings and then cancelling, any booking made by a guest when they already have an active booking for those dates will not be covered under our grace period policy.

 

Your hosting success is top of mind for us, and tests of this policy—including among hosts with strict cancellation policies in place—strongly suggest the change will result in increased bookings and successful stays. With this grace period, not only do guests book with more confidence, but they also have the ability to resolve booking mistakes without requiring your valuable time and intervention.

 

We value your feedback, and will follow up shortly with more insight into how your ideas are shaping this policy.

 

Thanks,

Lizzie

 

----------Update April 24th, 2018----------

 

Hello everyone,

 

Just to let you know there is now an update regarding protecting your listing details, as mentioned above. 

 

Here is the link to take a look: An update on the Strict Cancellation Policy

 

Thanks,

Lizzie


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1,325 Replies 1,325
Louise0
Level 10
New South Wales, Australia

@Lizzie  How could it be improved?  It doesn't need to be improved, it's needs to go.  Ditch it.  It's unnecessary.   As I've said on several other posts, Airbnb should simply adopt the same approach as most travel and accommodation providers and offer tiered rates based on flexibility of cancellation terms, with the level of premium/discount applied set by the accommodation provider, i.e. the host.

I note that there's a limited rollout of an offer to guests of reduced service fees if they accept inflexible terms, which is similar to my suggestion.  However, the interposition of Airbnb between the the payer and the recipient defeats the purpose of this price signal because it breaks the nexus between the financial risk and the reward.  Why complicate things unnecessarily?  The existing model used by most of the industry is understood by all and seems to work well.  There's no need, and considerable risk, in re-inventing an already fully-functional wheel.

 @Sean

There is apparently an increase in fees slated to roll out soon:  Moderate 4% and Strict 5%,  even though Moderate and Strict will actually be Flexible for 48 hours when/if this rolls out!

I also saw a  post that mentioned a new feature thats appears not to be an opt-in,  giving guests  a discount if t...

Cor3
Level 10
Langerak, South Holland, Netherlands

Hi @Lizzie,

 

Maybe the guests should be given the famous 'Clock' with a message: "You've got hh:mm:ss before this booking becomes confirmed and the private details will be revealed to you. Otherwise you can still cancel this booking - free of charge"

 

@Huma0,

 

As usual: Very good analysis!

Indeed Max: 14 days ahead, is not going to work for me 😞

 

Huma0
Level 10
London, United Kingdom

@Cor3

 

Thanks!

 

That's a very good idea. A ticking clock to remind guests could be invaluable.

 

I mentioned in another thread that I had guests booked to arrive yesterday who informed me only hours before that they were going to cancel (and not because of any extenuating circumstances, but because of an allergy to cats). They were flying from the US, so I simply can't believe they would have done this unless they had lined up more than one place to stay. I have a Strict cancellation policy on that listing, but they seemed to be under the impression they would get a refund. Why would they think that? I'm guessing because they had seen a message telling them they could cancel penalty free within 48 hours of making a booking...

Louise0
Level 10
New South Wales, Australia

@Sean0 

"Since ABB clearly wants to increase the quantity of guest bookings, why not offer future guests the option of a lower transactional cost if they accept the risk of (Standard) Strict Cancellation Policies?   ABB could allow hosts the choice to keep (Standard) Strict Policy, with possibly an incremental increase in ABB transactional fees?" 


Sean, 
Airbnb are already offering this in a limited regional roll out.    I don't like it.  It's unnecessarily complicated and not sufficiently incentivising.  By standing in the middle, Airbnb blocks the clear, simple, direct price signal of guest pays less/more = host's financial risk decreases/increases.  

Cor3
Level 10
Langerak, South Holland, Netherlands

Hi @Ange2,

 

I was just going to refer to that post, but you were quicker than me 🙂

This would really be a good (excellent) alternative.

Guests can waive the cancellation risks, by getting a small discount.

This would work both ways - very well. I Suppose!

Because when they waive the cancellation risk, Airbnb actually has prove of this!

 

I really don't know whether this already exists in Airbnb (As I didn't come across yet).

Jeff158
Level 10
Caernarfon, United Kingdom

Unfortunately @Cor3 the non refundable appears to be to airbnb's advantage and not the hosts.

This link explains the non_refundable_reservations

 

@Huma0   It says "Cancel within 48 hours of booking AND 14 days before check-in to get a full refund."  They are not entitled to a refund, even by these new Airbnb standards. They probably thought they could get a refund because they didn't bother to read what your policy says or decided to ignore it. They will probably try extenuating circumstances next.

Cor3
Level 10
Langerak, South Holland, Netherlands

Hi @Jeff158,

 

I didn’t see that article yet, so thanks for pointing me at this (maybe it is still regional, I don’t know).

And you are absolutely right. It is a disadvantage to the hosts!

But when this is applicable to all, then we can take this into account in our prices (I know: Difficult subject).

And what would you prefer? 5% host service fees (because you have strict) or 3% with this waiver at a relative small discount.

Where I’m from: People are always complaining about privacy. But when they are offered only a € 1 discount, they are willing to give up all their private details (But maybe this is just the Dutch way 🙂 )

 

@Lizzie,

 

I suppose: It’s going to be a bit more difficult to the programmers than:

  • 1 SQL Statement: Set Policy = “Strict with Grace” Where Policy = “Strict”
    +
  • 1 Statement: If Today => 1 May 2018 Then Policy “Strict” = “Strict with Grace”

 😞

@Ange2  I was unaware of that. 

 

That thread mentioning curent discounts to guests to forego Host's Cancellation Policies is also news to me.  

 

@Lizzie ABB doing a really insufficient job at conveying all of this pertinent information to hosts.  

@Huma0  @Cor3  Not sure they will subject guests to the stress of a clock ticking down and the constant email reminders that you only have hh:mm left to reply before you are in for the full whack!

David2023
Level 4
Hawaii, United States

Hi Lizzie,

 

I have been on Airbnb and VRBO (your biggest competitor) for over 6 years now. VRBO did something in the past 60 days that allows guests an easier way to cancel their reservation with a host. In the past 60 days I have received 10 cancellations ( I have three properties on their site) of which 6 were within a 48 hour period. Over the past 6 years combined I don't think I received 6 cancellations. 

 

It seems Airbnb and VRBO are in a race to see who can trip over each other fast enough to get more guests to book. In the meantime it has made a nightmare for me dealing with these guests that come and go like the wind. It's very time consuming to then help the guest with cancelling the reservation because they don't know how to do it. When I have had a 30 or 60 day strict cancellation policy I never had problems. Now I only have headaches! Having properties on the two major vacation rental websites used to be fun and exciting to get bookings, but now it has become a major pain.

Now that is good news, @Lizzie. For our part, we would have opted into this voluntarily if only it had come with a provision for full contact info to be withheld until after the expiry of the grace period.

 

If that's on the menu, we're satisfied. And that's saying something, as often we are not. 🙂

@Lizzie - The biggest issue for me is that the entire policy protects Airbnb from abuse by limiting their exposure and protecting its ability to keep their fees, but it does absolutely nothing to protect hosts. As several other hosts have already pointed out, we have seen absolutely no data showing concretely a trend that a policy such as this will help secure more reservations. In the retail world, it is true if you get the person to register and get them rung up, they are less likely to return an item than to pass up buying it all together. If there is data that shows a guest is less likely to cancel once they have made a reservation vs. not making the reservation at all, this should be very easy to report. Surely Airbnb wants us to be comfortable and supportive of a data-driven decision such as this. 

 

When Airbnb rolls programs out in a professional way (don’t get me STARTED on their lack of transparency and communication), they would provide us with all the benefits, supported by real data, that a change in policy like this will do for us, not just their “gut feeling”. Also, they would lay out a goal number of increased reservations they intend to achieve and show us measurements on a quarterly basis of how this policy is stacking up against the goal to determine if it was really a good change at all.  I’m sure they are doing this in the corporate office, but they are not sharing this with us down here in the trenches taking the hits.  It’s really difficult to support any policy change they provide because it is immediately met with distrust and lack of agreement.

That being said, I do want to thank you for trying to provide some clarity around this option. As a details person, this doesn't really go far enough for me.  You “know” I have a whole lot of questions (and opinions to go with them):

 

1. Three refunds per year per guest - To prevent abuse, guests are limited to three fully refunded cancellations a year.

 

This assumes that it only goes against “free refunds” which, in essence, means they get back their Airbnb fees AND accommodation fees.  So what happens to the reservation on cancel #4?  Airbnb gets to keep their transaction fee and the host still gets bupkiss or do they get 50%?  So the host is always hostage for 48 hours with a strict cancellation, right?

 

And what about in this scenario …. Guest books 3 Flexible reservations and cancels them all, outside the 3-free window (because it’s a 48 hour window for those policies too).  This guest has paid Airbnb 3 times and hosts have received nothing (they have received a full 100% refund of accommodation fees).  Now the guest books a Strict property, and cancels within 48 hours, even makes 3 such reservations, so they NOW get 3 free.  So 6 reservations later, 6 hosts have been jerked around and received nothing and Airbnb has recouped service fees on 3 Flexible reservations.  Am I interpreting this refund system correctly?  If the guest never takes the “freebie”, they can book and cancel and book and cancel and book and cancel and never have to pay a host a thing?  This seems ripe for abuse. 

 

What I can tell you, as a Moderate property, we’ve seen a dramatic uptick in cancellations since the change in policy and most definitely not an uptick in reservations. 

 

2. No full refunds for overlapping bookings - To make sure guests are not making multiple bookings and then cancelling, any booking made by a guest when they already have an active booking for those dates will not be covered under our grace period policy.

 

Wait, WHAT?!  Airbnb is going to keep all the service fees from, let's just say 3 or 4 reservations, that a booking guest makes but all 3 or 4 hosts are getting nothing?  And how are you combating when 4 different people make bookings for the same time period who are traveling together? What situation will this be that Airbnb keeps fees or can even TRACK that this behavior is going on?  If the guests are added to the reservation, does Airbnb retroactively go back and get their fees back? 

 

3. Three refunds per year per guest 

 

Do these “free/grace period cancellations” count as cancellations we see in guest statistics? Will I get to see exactly how many times a guest has booked a space for a few days while they sleep on it separately or will it only show us traditional cancellations lumped together with these? Will cancellations of this kind be seen as reasons for a legit host cancellation because we are uncomfortable with this guest’s behavior ("sorry ABNB, I don't want this reservation because they cancel 50% of the time"). 

 

Thanks in advance for the additional clarification @Lizzie

Tom-and-Christen0
Level 4
Pennsylvania, United States

For what it's worth, I noticed an online ad for Airbnb yesterday - Google paid click - that had the tagline "Airbnb - Book Instantly - Cancel For Free"

 

It causes us a lot of work to have people book and cancel and we are only about 50% successful in re-renting all the dates. I agree with others that, at 3 in 2017, we had our highest amount of cancellations ever. And that was before Airbnb's new slogan.

 

It makes me a little nervous. But, again, I'm glad it's being discussed and listened to. Hoping for additional modifications.