100% refund for guest - perfect solution or threat to the community?

[Frank35]

When I first heard that AirBnB is refunding the guest 100% I was seriously impressed. I thought wow, AirBnB must have some sort of insurance, some sort of stashed away super fund to cover this and I was impressed.

Then however, I learned that this is not the case at all. I learned that AirBnB was actually refunding OUR money without even asking.

So how on earth can AirBnB refund money that isn't even theirs to refund? I understand that its a hardship for a traveller, not being refunded (100%). But for us hosts its for than a hardship, its a severe financial problem, at least for people who rely on their income from airbnb.

Here is some math: if there is a group of 10 friends, who booked a place for a weekend for 1.000 EUR and they have to cancel their plans due to the Covid-19 pandemic and they are not refunded at all. Their maximum financial damage per person is 100 EUR, which is annoying but not a real hardship.

The host on the other hand looses 1.000 EUR and yes, this is a hardship and can be very threatening if this continues for much longer. 

I just hope that AirBnB realizes that siding with the travelers does not solve the problem, it creates a very severe problem for a lot of hosts and in the long run undermines the very foundation AirBnB is built on.

[Helen3]

Then you should convert your STR to a long term rental @Frank35 

It is not Airbnb's fault or anyone else that you didn't build enough liquidity into your business model so you retained profits to keep you going when there were low periods of demand. Using STR to cover your rent and then not setting profit aside to do so, is a highly risky business model.

Your patronising comments about hosts who have home shares doing Airbnb  for pin money and so they can share a glass of wine with guests  are both untrue and not necessary.

[Frank35]

... and Helen: when so wisely talking about liquidity, business models and setting aside profits - quite easy to say for somebody working for NHS. Try talking to freelance people and small business owners and ask them if they have "set profit aside" to cover 6 months of no income. 

Walk in our shoes before you comment on ME being patronizing. 

[Juan63]

@Frank35 I maybe wrong, but it seems a room rental host like @Helen3  doesn't have much experience in the home rental department so I wouldn't take it to personally. 

[Helen3]

Yep you are completely wrong @Juan63  I have a number of STR and LTR properties.

Just one on Airbnb.

Always good not to make assumptions.

[Frank35]

Thanks Juan! I try my best, its very hard though 😉

[Helen3]

I talk about business models and liquidity because I ran a consultancy for twelve years and have STR and LTR properties

I have more than walked in your shoes dearie. I am not the one being patronising. @Frank35 

And yes I do  hold down a full time job too...amazing how women can multi-task.🙂

[Frank35]

I am not even commenting on this anymore 🙂

[Nanxing0]

Be honest I'm converting some of my listings to long term rental but it's easier said than done. In order to do that I need to clear up my calendar for the next few months and there are still a few reservations leftover from May to September, all my listings. I can easily find some long term rental tenants due to that the Universities near me are kicking students out of the dorm and some of them need to find such place to live in the next few months, but the price is that I need to also cancel those leftover reservations. I messaged those guests and asked for their intentions. Most of them are OK with cancellation as long as I give full refund, which I certainly will, but some of them insist on keeping the reservations. 

The point is that we are a whole community and we should be humble to each other and try to help others in the community, instead of keep demanding and blame someone's business model. Most hosts in the community are not professional business operators and they were not aware of the high risk and this is a good time for them to learn, but we need to help them go through the difficulty. 

[Mark116]

@Helen3 

That is easier said than done, though.  For one thing, most people are sheltering in place so I suspect that few people are looking for long term rentals right now and won't be for a few months.  Secondly, is the issue of the expense of clearing out a fully furnished house and then either selling at a pittance or incurring the expense of storing all that furniture.   We put our unit out as fully furnished long term rental and not a single inquiry.  

It may be once this crisis has passed that a lot of people will pull their units from the STR market and choose a long term lease option, or maybe not, because of course, you won't get paid if your tenant doesn't have the money and the cost and time of eviction is exactly the reason a lot of people initially gave up on long term leases.  There are financial risks associated with both types of rentals.

[Helen3]

There is definitely a market for health and other key workers who are likely to want a place for at least a few months. And for those needing to be in isolation,

In the UK we let places furnished as well as unfurnished. So fairly easy to convert to lets for a few months or more.

Something to look at @Mark116 ?

[Mark116]

@Helen3  I wouldn't be opposed to do a longer term rental for a health care professional, I'd have to think harder about disinfecting, but we are not really close enough to any major medical centers where there would be a need.   No one working in NYC would want to be staying in New Jersey because they're not going to want to take public transportation, and the local Jersey City hospitals I don't see as requiring people from outside unless things get truly crazy.

Furnished apartments in the US are not much of a 'thing' outside of corporate rentals, and I have found it difficult to figure out  how to get a foot in that door.  All of the sites seem to deal with professional management companies and to be exclusively luxury apartments, so again, it is a bad fit for what we have on offer, a nice, not not luxurious apartment in a nice, middle class neighborhood.

[Helen3]

Oh yes I see your difficulty - here we have probably more furnished than unfurnished LTRs so it's pretty standard.

We also don't have the same legal restrictions you do around tenancy rights post 30 days.

I don't know how it is working in the US but we are already converting conference centres into hospitals and I know NYC has already told your central government they don't have enough resources to cope with current hospital provision.

I don't know enough about your healthcare system to know when you will need to expand resources locally but do speak to your local hospitals - it's likely there will be staff who can't go back to their families in order to minimise the risk of spreading infection.

Worth a call or two.

Best of luck.

[Nanxing0]

@Helen3 That's right the situation is different in different countries so it should be handled in different ways. Bottom line is that at this moment all of us should work together to get through the bad time together, instead of fighting against each other and make the burden worse for those already suffering. It's quite obvious that most guests are not in immediate need of the money they used for booking but a lot of hosts are in immediate need of some money to pay their cost, as well as those cleaning people. Based on this we should work together to design a system that temporarily use this chunk of money to help those hosts first and then reward/refund to guests, instead of forcing all hosts to refund immediately and suffer from the financial burden.

[Frank35]

Oh yes!

[Jessica-and-Henry0]

@Frank35 

Just as guests are no longer able to travel, many hosts do not seem to fully acknowledge that equally, hosts are no longer able to provide services promised. 

Borders are closed and all nonessential travel is more or less banned. Hosting services will not be provided as promised. 

No guest *owes* money to a host just because that host has rent or a mortgage to pay. The guest is paying for a stay..... not because they want to make sure hosts have enough rent money.