Hey folks, lots of good ideas and discussion on this thread, here is my take.
I understand what AirBnB is doing with offering full refunds to guests. This pandemic is the very definition of a force majeure, so even if AirBnB offered some sort of travel insurance it would most likely be voided by the force majeure clause that is in every well written contract. Offering full refunds is AirBnB's PR move to ensure guests have a positive experience in a difficult time and continue to use the platform, which ultimately is good for hosts. I was not happy about the loss of income, but I was pleasantly surprised by the offer to compensate hosts 25% for bookings cancelled due to COVID-19, though I thought the check in cutoff date should have been end of August of Sept. Which AirBnB may still do if this situation drags on for longer.
I've accepted that the COVID-19 situation is going to be financially difficult for almost everyone in the world, not just AirBnB hosts, so I'll take whatever small amount of compensation I can get. I am not looking to debate that with anyone, merely stating that is what I have accepted in order to get on with how to proceed in this new reality.
Ultimately, the situation is what it is, no amount of griping is going to change it, so I'd like to share what I am doing to refocus my AirBnB business and what I, and hopefully other hosts, can do to mitigate future similar scenarios.
Once AirBnB rolled out their refund policy (around Mar 15), and it became evident that most countries would be imposing travel restrictions, I contacted all of my booked guests and requested they cancel their booking immediately for COVID-19 and I would approve a full refund, no matter their check in date. I did this in order to clear my calendar of bookings that I felt had a very low probability of being fulfilled. I have a strict cancellation policy, but I chose to offer refunds rather than play hardball as I:
a) Wanted to provide my guests with a positive experience that would hopefully encourage them or their family/friends to book with me in the future.
b) Clear my calendar of int'l travelers so I could shift my focus to local guests who are not yet subject to travel restrictions.
c) Suspect AirBnB will be extending the full refund cancellation window as this situation drags on, so I wanted to get out ahead of that eventuality.
I gave my booked guests until Mar 31 to cancel, after which I will start enforcing my strict cancellation policy. But even there, I will show some flexibility as the COVID situation is fluid and changing rapidly, so someone who books given today's situation may not be able to check in if new travel restrictions are in place before they arrive.
I have changed my cleaning and guest access policies, procedures and protocols to try to stay in line with the best practices relating to COVID-19, and I update them as new information becomes available. I inform my guests of these updated protocols in the "Other Things to Note" section of my description.
I have reduced my prices and extended my maximum stay to 61 days, in addition to offering a monthly discount, in order to cater to the needs of local guests, many of whom now find themselves between jobs and living spaces. I am fortunate to be located in Toronto with a large local population that still has a moderate level of freedom of movement, in a country that still allows a significant level of travel within its borders. I understand hosts in smaller centers and especially those in vacation destinations may find themselves in a more difficult situation with regards to their pool of potential guests due to the tight travel restrictions.
Over my 5 years of AirBnB hosting, it has moved from a side gig to about 1/3 to 1/2 of my annual income. The loss of income is going to have a significant impact on me, especially as I was laid off from my salaried employment due to the pandemic. Fortunately, I made the decision from the get-go to put aside 10% of my AirBnB income in low risk investments, mainly high a interest savings account, GICs and the like. I am also fortunate that the Canadian gov't has rolled out a program that pays $2,000/mth for the next 4 months to any citizen who can show they earned $5,000 in the past 12 moths, including self-employed and contract workers. They have also rolled out some programs offering interest free small business loans of up to $40K with 25% forgiveness if paid back by Dec 31, 2022. There are also programs at the provincial, municipal and local level that I am looking into. I encourage all hosts to look into any programs offered by their various levels of gov't to offset the financial impact of the COVID-19 restrictions.
Between my savings, the local bookings I will get, the AirBnB refunds, any gov't programs I qualify for, my line of credit, and potentially cashing in my retirement fund early, I can probably survive 12-18 months without changing my current business model, until hopefully better times return. I am however not going to sit on my current business model and hope for the best. I plan on doing the following during the next 6 - 12 months:
1. Secure funding and/or use my savings to do the renovations necessary that allow me to switch more easily between short-term and long-term rental models, depending on the market conditions.
2. Explore other listing platforms to spread my risk around various sources for guests, so I am not dependent on AirBnB exclusively for filling my listings.
3. Increase the amount of short-term rental revenue dedicated to my savings plan from 10% to 15%.
4. Renovate my long-term rental unit (not listed on AirBnB) in order to increase the asking price and reduce my reliance on revenue from short-term AirBnB rentals.
I know not all AirBnB hosts can do the above, but I think this situation has probably made us all consider how we can adjust the spaces we offer in order to respond to markets that may shift quickly.
I believe this situation is also an opportunity for AirBnB hosts to come up with a strategy for us collectively to mitigate the effects on our incomes of a sudden market downturn. This may be something like a co-op of hosts where you can opt in by directing 1% of your revenue to a fund that is then invested by a board, elected by the co-op members. Members experiencing significant income loss due to events out of their control could then be compensated from this fund, as long as they meet the criteria developed by the board, as directed by the co-op members. The advantage to this is there would be no force majeure clause as would exist in an insurance policy, and it would be directed by the AirBnB hosts themselves, not by AirBnB management. The downside is AirBnB may look at this as the backstop for hosts and not offer any compensation in the event of another COVID like event.
I'll sign off with one final note. At this time, many of us find ourselves with empty units and lots of time on our hands. I don't expect the situation to change any time soon. Now is the moment, if you can, to use those spaces and your time to help those in even more desperate situations than ourselves. While I following shelter-at-home directives, I am also currently volunteering at a local food bank and as a mover for a women's shelter that offers a program of free moving and storage for women looking to escape abusive home situations. I consider my forays from the house for these purposes to be essential travel. Both volunteer positions are coordinated with local authorities to ensure everything possible is done to meet COVID-19 precautions. I have also placed one of my rooms on the AirBnB Open Homes program in order to provide shelter to those who most need it, but cannot afford it at this time. I encourage all of you to contact your local charities to see how you can help in this time of global and local crisis.
Take care everyone, stay safe, stay healthy, practice physical distancing, wash those hands frequently and let's all make it through this together with as little damage as possible.
