Air BnB has sold the Hosts under the bus with the COVID 19 extenuating circumstances policy. Also, the solutions designed to mitigate the financial consequences from these actions are feeble, impotent and couched in marketing spin.
Like many posts by Hosts on this forum, I have empathy for the guest and accept the concept of partial refunds and credits …to share the losses. The existing cancellation policies could have played this role. Hosts selected their policies knowing the Pros and Cons of a strict versus flexible set of terms. The fact is that the intermediary, Airbnb, has not come up with a measured, suitable loss share basis.
Guest Travel insurance aside, their intervention ensures that the Host takes 100% of the hit many times over, effectively taking the turnover to negligible amounts / zero; for 2 ½ months before facing the longer term fall out in the travel sector. Actions speak louder than words. Air BnB considers the plight of the Host as less important than the needs of the Guest who gets a full refund for a one off vacation travel booking.
It seems bizarre and very unfair. Why did the platform do this you may well ask? The reasons given by Air BnB are at best, an example of pure arrogance, or at worst, dishonest.
Since when is this platform qualified and responsible for making decisions that discourage an individual from travelling? Sure, they are skilled at anticipating human travel behaviour. Nevertheless, Governments, good or bad ones, and other forms of neutral, qualified entities make decisions on public safety, not business people from silicon valley or equivalent.
Protect their market first. If the customer (guest) gets a full refund, the guest will choose this platform again in the future. Guest is king. Once the anger of the host has subsided, most hosts will be pragmatic by staying active on the platform. This is surely their thinking behind this decision.
“Relief” is offered to Hosts, yet, conspicuously absent from the headlines, is an extension of the extenuating circumstances by another 1 ½ months! The communication is inappropriate and insensitive. We learn of their sufferings of being “alienated” from their “co-workers” …and other self-serving, narcissistic behaviour (in a commercial sense). You have people facing dire financial consequences from the platform’s actions and they want self-pity, plus appreciation (we are good people missing our co-workers who miss us). Why use the first name (last name omitted) of the founders? A presumption that thousands of people know who they are. Celebrities portraying what is false humility. It is so bad it is humorous.
The “relief” is portrayed as 25% of the damage to be paid back to the hosts. There are international publications, like the recent article in by UK’s guardian, that fall for this vague offer. It is not 25% of the pain; it is 25% of the cancellation pay out! That is 12.5% for folks with a strict cancellation policy in most cases. Consider the fact that the platform makes between 15% and 20% on properties it doesn’t own. The extra profits emanate from a variety of revenue generators in the chain such as: payment gateways, forex conversion and investing the deposit money that essentially belongs to the Host.
It is an unbelievable business model. The fact that it doesn’t make large profits is not because it doesn’t have the ability to make a profit. The profit is sacrificed for expansion like all giant digitally based businesses. Their capital risk is the cost of the platform …not the properties it serves. Do not feel worried or sorry for this platform. There are many levers at its disposal to ensure its survival. The market Cap. Value has plummeted but those are nice problems to have compared to thousands of people whose accommodation businesses are in trouble.
The $5000 relief to Superhosts is misleading ….more spin. The criteria have disqualified a huge amount of superhosts. Again, we see an over complex, impotent solution from people that are literally playing god with a small “g”. Examples to follow:
Disqualified are superhost of less than 12 months. Okay, what about a host that took many years to get their property(s) onto this standard? A superhost of 6 months versus superhost of 6 years …. When you get the grade you deserve the benefits - period.
Another condition is denying a superhost relief because they don’t have a mortgage attached to a specific property. Too complex and misguided. Some people have loans from other sources used to fund their property or other assets. There are many ways to finance possessions and many forms of sacrifice.
Superhosts with more than two properties: Okay, so what about a person that decided to throw their life’s savings into short term self-catering accommodation with emphasis (support) on Air BnB? Hello? They are building your platform with commitment!
“Up to 5000$” ….more devious communication: There is no understanding or information on who gets $500 and who gets $5000 …. Air BnB is not accountable to this claim.
I have read a lot of understandably, emotional, angry communication from Hosts on these subjects. Other than the benefits of venting, it will not accomplish much. It is a brilliant business model and we must acknowledge the value it has given the world of tourism. The founders deserve much credit for this ingenuous business. In tough times, it has become apparent these folk do not possess the leadership qualities required for an entity of this size and significance. Their deficiencies are all too familiar of the digital age.
Don’t get mad, get smart. Stay on the platform and optimise. Diversify your marketing with many platforms but don’t make the mistake of assuming they are better, and have the morals / business ethics that you wish them to possess. They also earn 15% + on properties they don’t own. Success does weird things to people over time; they do not have your back.
The true liberation path is a slow and persistent one involving investment in your own brand to get the direct booking; own website using the same brand, offering lower prices, and supporting the repeat business dynamic from “after sales” service / communication.
Little by little the giant platforms will perform the services of an accommodation guide (without remuneration!). There will always be guests that want the security of booking via a platform but the older this industry becomes the more pressure on the intermediary perceived value. The intermediary can play a valuable role, but when it starts to under estimate the value of one or both of the principles, things begin to change. There will be long term consequences for Air BnB from these actions; the mistake is to think they will be immediate.
Stay safe and keep the faith in your accommodation business!
