AirBnB’s 25% compensation for canceled reservations

[Niklas24]

I was very impressed when I received Brian Chesky’s video message that AirBnB would compensate hosts for 25% of canceled reservations in the period 14.3-31.5. Or so I thought, however, reading the fine print I am very disappointed to realize that this program is very poorly conceived, and most hosts will receive far less than the 25% and many will receive nothing.

The issue is that AirBnB’s 25% compensation is based on what the host would get through their cancellation policy, which means that hosts that have had a strict cancellation policy are much more likely to benefit. Another factor, although less important, is that cancellations of short stays are more readily compensated than the longer stays.

I believe an almost universal experience for hosts was that in 2-3 weeks after around mid-March the vast majority of stays for the period 14.3-31.5 were canceled. It feels unfair that AirBnB’s compensation policy favors certain hosts with certain policies and certain type of stays. In my case, I had maybe 80% reservation rate for 14.3-31.5 with reservations worth thousands of euros. Every single reservation has been canceled by now, yet I am receiving zero compensation because I had a moderate cancellation policy. Had I realized this in time, I would have at least reached out to guests and asked them to cancel closer to their arrival date in order to make me eligible for the 25% (which is an insane incentive in the compensation policy).

A much fairer solution would have been to compensate for every cancellation regardless of hosts’ policy even if that would mean a smaller compensation percentage. I hope that AirBnB would still revisit their approach.

[Nicky151]

Nikalas, I’m heart broken as well as bankrupt now 😢 don’t think Airbnb realise this is our business too. Like you all my bookings not just March but the whole summer are now cancelling 😢

“WHAT ABOUT ME”

At exactly this time last year I faced what was the most difficult and horrendous experience of my life...a 25yr divorce, lost my job and a repossession of my family home...Oh and I lost my hair around the same time due to stress.

I sat within my four walls and had to save not only my mind but my home.

I came up with a plan, it was working and I was saving my home as my plan was to use Airbnb. The future put a smile back on my face after such a sad time.

Today, I find myself back in the same position due to C19 virus 🦠  Now with the “Blue Print” already installed I know what to expect and have dealt with many issue before they arise so no hair loss this time 🙄🙏

I ask again “What about me” there are millions of people like me!!

1: Not self employed for one year, unable to make a Government claim.

2: Universal Credit £79 a week 😱 how are you meant to live and pay bills and save your home on that? Support with mortgages after 12 months of which time repossession would have happened 🤷‍♀️

3: Insurance companies with more get out’s, small print to even make a claim. I will be in a battle with them for months to come :oncoming_fist:

4: Airbnb to cancel all bookings and leave you with nothing including themselves? Why didn’t they just add a credit to guests account to use in the future and held onto that money to help us? 🤷‍♀️ Now they are asking if I wish to rent my house out for FREE to help others 🤯 who’s going to pay the mortgage and bills and help me? 🤷‍♀️

Now offering to pay 25% of the refund policy with claw dates only from March 31st to April T&C...what about May, June, July and August. If your lucky to make a claim a average booking payout will be £12.50 😳...that will pay half towards the gardener to maintain the property I suppose 🙄

5: Superhost can apply for a grant 🥳 only if a superhost for more that one year 🙄 (can’t claim for that Superhost only for 9 months)

6: Airbnb will ask your past guests if they wish to donate any money to you 🙈

7: Only thing to do is barricade yourself in and see what happens when the season ends? Oh yeh we enter the quiet winter season 🙄

[Emily1171]

PERFECT EXPLANATION. this needs to make world wide news. Airbnb robbed home owners by allowing full return . 

[Rodney11]

Welcome to capitalism everybody!

I agree with @Louise0 , I have had a strict cancellation policy for 5 years and I know it costs me bookings because I get requests from guests asking me how late they can cancel and get a full refund. When I tell them I have a strict policy (because guests never check those sorts of things in the listings themselves), those guests never book with me. I traded quantity of bookings for security of bookings. I also put away 10% of my AirBnB earnings in relatively safe investments so I had a contingency account for exactly such a situations as this.

If AirBnB had just left the cancellation policies in place, I would be getting 100% (not 25%) of my cancelled bookings' revenue still coming to me, and all the hosts with flexible or other policies would be getting a lot less. For the record, I reached out to my guests around Mar 15 and offered them all full refund cancellations, including those with check in dates beyond the original date of Apr 14 (which has now been moved to May 31), because I felt it was the ethical thing to do.

I also think AirBnB needed to do this to avoid a class action suit from their guests. And the 25% refund to hosts based on their cancellation policy probably indemnifies them from a class action suit from their hosts.

Having said that, I also agree with @Mark3205 , this is a unique event and more should be done to accommodate all hosts, something like 40% for strict cancellation hosts and 20% for all others (just throwing numbers out there, no calculation behind them). 

But that is not going to happen. IMHO, AirBnB have decided on this policy for the following reasons:

1. Their legal team has determined this is the best course of action to indemnify them from a class action lawsuit from either guests or hosts.

2. Their PR team has determined this is the best story to put forward to the public. Guests are all happy with full refunds and the story most of the world is running with is that hosts were compensated 25% of their income.

3. Their financial team has advised them that AirBnB needs to hang on to a big amount of cash to rebuild, either when int'l travel becomes viable again, and/or to reinvent themselves as a long-term rental platform. Between the money they keep out of the COVID cancellation policy, the $1B they have already raised from private equity, and the USD$1B it seems like they will receive as part of the US gov't bailout, AirBnB will attempt to rebuild. It may also go under.

4. AirBnB expects a large portion of their current hosts leave the platform, due to either bankruptcy or finding other ways to get the equity out of their properties. They will need millions of new hosts to cater to their new business model as can be seen here: https://techcrunch.com/2020/04/06/airbnb-turns-to-private-equity-to-raise-1-billion/

5. AirBnB wants their customers to return. Hosts are not their customers, guests are. We hosts are AirBnB's product. When the market goes soft, one strategy is to first reduce the price of your product, while refunding those who purchased your product recently at the original higher price, and either reduce your products availability and/or find new markets to get your price back up to where it was originally. AirBnB seems to be doing all of the above.

IMHO, if you expect AirBnB, or any billion dollar corporation, to compensate you for your COVID losses, you are barking up the wrong tree. AirBnB have made up their mind and no amount griping on the community message board is going to change that.

If you want to mitigate the impact of crises on the average Joe/Jane, your efforts would be better spent on working to change the nature of the current financial and monetary system so wealth is more equitably distributed and individuals are not so overly dependent on potentially volatile income streams to meet their basic needs of food, housing, health care and education (again IMHO). But that is probably a discussion for different community board.

[Nancy146]

Thank you for this thoughtful, helpful, well-reasoned analysis. Cheers.

[Rodney11]

@Nancy146 I hope you are getting through this without too much disruption and that everyone around you is safe and healthy. Chin up, there will be life after COVID. All the best!

[Tracy585]

Hi

 What are your thoughts on asking guests who make contact regarding their May 2020 bookings, to delay ?

The idea, which has already been mentioned on other posts, being the later they cancel the  higher the % host refund ?

[Almudena36]

Has anyone actually received the money from Airbnb or any email yet? I have not heard anything so far

[Flavia191]

Also wondering...

[Rodney11]

@Almudena36 I messaged AirBnB help on Apr 13 to inquire as to when I would see the payment notification they promised in early April. Here is the excerpt of our conversation: 

Me:

Hello,

As part of your COVID-19 refund policy, you indicated that hosts with qualifying cancellations would be contacted in early April regarding the 25% payouts they would be getting for COVID cancelled bookings. I have several bookings which I believe qualify but have yet to receive any message from AirBnB. Please clarify when I may be expecting this communication from you. Thanks

Rodney

Airbnb Support: 
Hi Rodney.

Thanks for reaching out to us. This is Vel, a Case Manager from Airbnb, and I hope this message finds you well.

I got your concern for more information about the 25% partial payout Airbnb gives out to our host who are affected by the COVID-19 cancellations.

I would like to give you more details, but it will be retroactively processed by the system within a few weeks of cancellation. All notifications will be sent in early April for more details.

You can feel free to check the link below as well:

Link to AirBnB COVID-19 Policy

Thanks in advance for your understanding. Please do not hesitate to let us know if you have any other questions—we're always more than happy to help!

All the best and take care.

Me:

Your message indicates notifications will be sent in early April for cancelations that qualify. It is now mid April and I have yet to receive any notification.

Airbnb Support:

We apologize as we cannot provide a specific date for you to expect the notifications. As per advised on my previous message, all will be processed by the system.

Thank you for understanding.

I think they may be a little overwhelmed by the size of the task they've set for themselves.

[Sarah977]

@Rodney11  Hey, Chesky couldn't even manage to start his last video message on time- he was  18 minutes late, wasting everyone's time. Airbnb's timelines are something they seem to think are just a suggestion to themselves.

[Almudena36]

Many thanks @Rodney11 for your detailed response. It is at least good to hear I am not the only one not having heard from them yet. Wishing you the best,

Almudena

[Alan9]

It seems to me that we regard ABnB as some separate entity which has complete control over our ability to be in business.

The current situation may resolve itself at some future time and ABnB's goodwill and the"partnership" they trumpet is in real question.

Imagine a situation where say 3 years from now the market has recovered, people are travelling again etc,

I'm going to have a nagging doubt about my "partner" being there when I needed them!

Clearly their response, the 25%/12.5%, is not available to the many who were actively encouraged by ABnB

to have a more flexible, "it will get you more bookings", cancellation policy.

This obviously self serving response in itself is grounds for challenging ABnB to be less discriminatory and 

more willing to share the load in this crisis.

Abnb's pockets are far deeper than the hundreds of thousands of individual property owners who have entrusted the ABnB platform with billions of dollars worth of property.

These properties are either a part of their own home or major personal investments designed to provide maybe their only income.

My suggestion is that ABnB pay ALL owners with proven cancellations caused by the effects of CO19

a flat percentage, say 10%, of the net income owners would have got.

I know that isn't going to come anywhere near covering the complete loss but will go toward the covering

of fixed costs, strata fees, council rates, water or service rates.

This would go a long way to preserving the trust in the "partnership" going forward.

I'm sure someone out there is seeing ABnB's vulnerability and who knows we may find another platform comes out of the woodwork with fairer guidelines .

The threat of mass abandonment of ABnB's current clients, "partners", US, to another platform might get them to see some justice.

Find a way to protest, join a group or class action to let them know you don't thinks it's fair "partnership".

[Dan12442]

Did anyone receive any money yet? or know when we will? How about the 5k grant.

[Trygve2]

I got this message when I asked Airbnb on April 15th:

There is not a set date for this, but it will be likely at the end of April, since many cancellations are still happening.

...

you are definitely among the eligible hosts, so you will hear from us soon.

I bet I could write an algorithm that picks PAST eligible cancellations in about 15 minutes. Are we to assume Airbnb is doing this manually?

[Elad27]

After Airbnb cancel in my behalf and fully refunded all my future reservations and close my life business, Mr Brain Chesky decided to help us the host but when it's comes to real money I received this poor massage from the financial team:
This Reservation is paid less upfront .Again it is not elligible for 25% . Apologies for the inconvenience but we have set up guidelines on how to sopport our hosts. But if you think that it is not enough, I suggest to leave a feedback at www.aribnb.com/feedback. We all hear your voices that is why we have created a support for our hosts. Thanks for your time.

It's already drop in the sea... 25% from my strict policy is 12.5% payout..!

Now after promises of payments for host on crisis we not eligible any payment again!!??