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Airbnb hosts will be charged fees if they cancel summer bookings due to coronavirus concerns
Julie Bort
Apr 16, 2020, 7:34 AM
Airbnb CEO Brian Chesky. REUTERS/Mike Segar
Some Airbnb hosts have decided they don't want to allow people into their homes through the end of the summer, thanks to coronavirus concerns.However, Airbnb's no-penalty, COVID-19 cancellation policies only cover a very specific period: reservations that were made before March 14 for trips that take place through the end of May. If a host cancels bookings for June and July now, they will be charged $50 per cancellation and they could face other standard penalties, such as losing a Superhost status and being banned from the platform altogether. Airbnb says its cancellation policies are evolving and that hosts should wait to see if will extend its them through June.Visit Business Insider's homepage for more stories.
Airbnb hosts that have decided to cancel their bookings through the summer over coronavirus safety concerns may be in for a surprise.
Airbnb is currently charging hosts the standard penalty of $50 apiece for cancelling booking for June and beyond. Hosts may also be charged those fees for canceling bookings in April or May if those bookings were made after March 14. In addition, hosts may be subject to other penalties from the platform for cancelling through the summer, including losing their "Superhost" status and the possibility of being banned from Airbnb altogether, according to Airbnb's written policies and according to a host who was told by Airbnb that such penalties would apply to her.
An Airbnb spokesperson tells Business Insider that despite its written policies, it has promised hosts that it won't take such actions. "Specifically, we have communicated to all Superhosts that they will not be penalized or lose their status due to a decrease in bookings or increase in their cancellation rate."
But Superhost Laura Faulkner was told differently by customer support this week when she decided to delist the studio apartment attached to her home. It is typically booked out for months in advance, she told Business Insider.
"After cleaning in between guests in March, we decided we didn't feel safe anymore with people coming in and out (for our own health and the guests). Additionally we had lost so much business that it started to make more sense to temporarily get a short-term tenant that could provide stable income for that unit. So what we decided to do was take our listing off from April-July to limit exposure to other people in our property," Faulkner told Business Insider.
When she went to cancel her June and July bookings, she felt like Airbnb customer support was pressuring her not to. "Basically I was told that if I cancelled on anyone in June or July (which is more than reasonable given how quickly COVID-19 is evolving) that I would be subject to fees and would lose my Superhost status (because Superhosts can never cancel on anyone)," Faulkner says.
The Superhost designation is earned from high customer reviews, fast communications, and requires the host to maintain a cancellation rate of "1% or less," Airbnb says, while allowing at least 10 bookings a year.
Promises, for a limited time only
A month ago, Airbnb promised not to remove the Superhost designation or charge fees for cancellations for hosts that didn't want people in their property. But the Superhost promise only covered the month of April, it said, and the bookings made before March 14 that involve stays through the end of May.
Reservations made between that time frame, before March 14 for stays through the end of May, are covered by the company's COVID-19 extenuating circumstances policy.
All other bookings are not, meaning they are covered by the company's standard policies, including standard cancellation fees. In addition, the non-covered reservations are subject to the policy that says, "If you cancel 3 or more reservations within a year, we may deactivate your listing."
Instead of cancelling bookings now, Airbnb is advising hosts to wait and see if it will extend its no-penalties policies to cover June. A spokesperson tells us:
"We have made significant changes to our Superhost program to allow Superhosts to protect their status during this period of uncertainty. Specifically, we have communicated to all Superhosts that they will not be penalized or lose their status due to a decrease in bookings or increase in their cancellation rate. We are regularly updating our policies regarding Extenuating Circumstances cancellations and will communicate updates regarding future Superhost assessment periods. Regarding the post-May 31 reservations, we ask for patience as we continue to monitor the situation."
But there's some risk to waiting to see if Airbnb will extend its policy to June. If it doesn't and a host cancels within seven days of the booking (that is, waits until the end of May), the host penalty fee increases to $100, according to the current policies. The cancellation could wind up as a black mark against the the host. On top of that, waiting doesn't give the traveler as much time to make other arrangements.
Airbnb is currently advising hosts who already know they want to cancel summer guests to ask the guest to initiate the cancellation request. That way the host won't incur any fees. "So far most people have been cool with cancelling, but let's say I have a guest that refuses - then I will be penalized if I cancel on them," says Faulkner.
Costly for everyone
The decision to allow full cancellations without penalty, even for a specific window of time, was a costly one for Airbnb and its hosts, and reportedly a controversial one within the company.
The company has limited its refund policy to a specific window in part to help the hosts that do want to continue to accept bookings and make money through the crises.Hosts may choose from three cancellation policies from a relaxed one that allows guests to get a nearly full refund as long as they cancel more than a week in advance, to a strict one, which charges the guest up to 50% for cancelling.
Many hosts were so upset that the company allowed guests to cancel for a full, automatic refund, instead of observing the host's fees and cancellation policies, that on March 30, CEO Brian Chesky wrote an open letter apologizing to them. The company has also set aside $250 million that promises to pay hosts 25% of what they would have gotten from their cancellation policy.
Maintaining a Superhost status is critically important for many hosts at this time, too. Airbnb's has created a $17 million fund to help hosts pay expenses during this crises but they must be Superhosts to be eligible.
Airbnb is walking a fine line trying with policies to appease everyone but will still allow the company to generate enough revenue to ride out the storm.
Are you an Airbnb insider with insight to share? Contact Julie Bort via email at jbort@businessinsider.com or on encrypted chat app Signal at (970) 430-6112 (no PR inquiries, please). Open DMs on Twitter @Julie188.
