What is going to happen to reservations post 31st May? We need to have a plan.

[Nick-and-Jackie0]

After the initial shock of @Airbnb unilaterally changing the cancellation policies for reservations arriving up to and including 31st May

(which many of us have contrasting views on).

We like many host have been trying to rebuild and recover some sort of order for the remainder of this year.

However we are regularly being contacted by guests whose stays are well after the 31st May deadline (in June, July and August).
They too are asking for 100% refunds. Some are aware of the current policy and ask why we will not offer a 100% refund to them and we have even had a couple of clients who have told us that they will wait until Airbnb extend the date of this policy and then cancel 100% free of any financial burden!

We need to know now what Airbnb's action plan is. We can no longer make plans ourselves as Airbnb have shown that they can and will just rewrite the policies at the drop of a hat and without any consultation, so we must hear from them. 

Will the 100% refund policy be extended past 31st May?

Will a different sliding scale policy be introduced (e.g 50%refund for June reservations, 30% for July and 10% for August)?

Will we return to our normal polices after 31st May?

Will Airbnb offer more protection to its hosts?

We need to know whether we should be trying to encourage the guests to cancel now for them to forfeit their deposits or can we recommend with confidence that they hang on to see how the Covid-19 travel restrictions develop, knowing that then if they still cancel that we will not be left with zero again?

Also what protection do we have if we change the dates for guests? We have some guests who want to deffer their stay to later this year and others want to postpone for 12 months. Effectively they will be extending the cancellation policies.
Will Airbnb guarantee that if at a later date these guests then decide to cancel, that we will still receive the full funds due for these reservations?

We appreciate there is a lot to consider and people from Airbnb are looking into this and are extremely busy, but we do need a plan to move forward.

The loss of nearly three months revenue in our properties has had a massive effect on not only us but the people whom we employ. The season where our homes are is very seasonal. Having lost over 40% of this years season already, we need to be able to limit further damage.

[George93]

UK government: Do not book summer holidays

Downing St has said that government guidelines and official foreign office advice "do not allow for people going on holiday".

The prime minister's spokesman said that travelling within the UK for holidays was "not something which the current guidelines allow for" and Foreign Office advice "continues to be that you should go abroad for essential travel only".

Earlier Transport Secretary Grant Shapps suggested people should not book summer holidays for later this year.

[Jennifer976]

I had people booking June, July and even November and they booked well before March.  I've given all but the November guest 100% refunds.  Mind you if someone books now I will be adhering to my strict refund policy.

[Mary1793]

Agree that they need to announce their plan and ASAP, regardless of what is announced by health organizations and governments.  And that announcement should be that they will honor hosts’ cancellation policies, and no longer interfere in binding contracts between hosts and guests.  Contracts don’t exist for the good times, when everything is going right.  They exist for the bad times, like now, when everything is going wrong.  There is nothing unfair at all about the cost of the pandemic being split 50/50 between hosts and travelers- especially because travelers can insure against situations like this and hosts can’t.  To retain goodwill, I am telling travelers who want to cancel beyond May 31 that I need to enforce my policy but am happy to give them a discount on a future stay that is the equivalent of the 50% they would lose should they cancel two weeks out.   

The only thing Airbnb has to sell is the opportunity to stay in our homes.   If they take away 100% of our income for the duration of this crisis  (I am typically fully booked a year or more in advance and, like many hosts, my rental income = my only income) there won’t be anything left for them to sell because we will have all gone bankrupt or into foreclosure —and those that are lucky enough to survive and have a half ounce of brains will just refuse to list on Airbnb and use other platforms for their listings instead.

[Rodney11]

Thanks @Susan17 , I had not seen this article.

It is essentially the approach I took in early/mid March when it looked like this pandemic was going to shut down pleasure travel for the foreseeable future. I contacted all my guests through the remainder of the year and requested they cancel their bookings, I gave them all 100% refunds, no questions asked. I believe this is the ethical thing to do during a pandemic, and I wanted to clear my calendar to focus on local, longer term rentals for guests who are not subject to travel restrictions and mandatory 14 day self-isolation. I make all guest verify they are already in Canada before booking. 

As @Jennifer976 mentions, anyone who books now is subject to existing cancellation policies, though AirBnB may change even this, if the situation continues further into the year. This is the risk of using a platform that already had an Extenuating Circumstances policy in effect to cover situations like COVID, which we all signed up for when we decided to list our property on this platform. 

@Nick-and-Jackie0 , asking guests to help float your business during a pandemic is not the best PR move in the long-term IMHO. Once pleasure travel is again viable, guests are more likely to book with the companies that gave them 100% no questions asked refunds, while avoiding those who made their life more difficult in a stressful time. I suspect most business ethicists would also say that trying to negotiate withholding a portion of refund to a customer during a pandemic is getting into ethically murky territory.

@Paul60, most insurance policies have a force majeure clause which indemnifies them in the case of a unforeseen cataclysmic event; COVID is a text book definition of such an event. AirBnB has a version of cancellation insurance for hosts: the strict cancellation policy. The down side to this policy is in a non-pandemic world, hosts using this policy appeal to fewer guests. But at least these hosts will now be getting a 12.5% payout on qualifying cancellations. 

Below are my thoughts on how to deal with the current situation and build for the future:

1. Advise all your guests who booked before Mar 14 to cancel and provide full refunds. 
2. Change your listing so you can only accept guests who do not contravene the COVID policies in place in your jurisdiction.
3. List your your property on other platforms, especially long-term rental platforms.
4. Reconfigure your property so it is more appropriate for long-term and for isolating and physical distancing of guests.
5. Look into all programs offered by local gov't, business and other organizations that help support small businesses during the COVID crisis.
6. Reach out to local gov't, businesses and other organizations and find out if your space fits any needs they have for living, work or storage space during the pandemic. This may generate revenue, but if you can afford to donate your time and space during this crisis I'm sure would be greatly appreciated by your communities.
7. If your property has sufficient equity, borrow against it to get you through this crisis, whether that means getting capital to renovate your property into a long-term rental, consolidating unsecured debt into debt secured against your property (which is usually at better terms and easier to renegotiate), or selling a property (if you own multiple) in order to consolidate your most profitable properties and build a solid base for potential expansion when pleasure travel returns.
8. When you start making income from your properties again, put 10-15% of everything you earn into a low risk contingency fund, like GIC or TFSA. This will help insulate you from future market downturns.
9. Keep the pressure up on AirBnB to provide better coverage options for both guests and hosts in the event of cancellations, whether it be a single guest, or the entire world being shut down.
10. AirBnB hosts could look at creating a hosts' Co-op or Credit Union that hosts can opt into with a set fee, and in the event of cancellations (for any reason), hosts would be compensated based on a formula and requirements as determined by a board nominated by hosts themselves. This does not have to exist as part of the AirBnB platform. 

Those are my thoughts about the situation at this time. I've accepted that this year, and probably next, are a write off as far as short-term rental business is concerned and am focusing on how to find new ways to get revenue out of my property. But mostly I am focusing on how to keep myself healthy, and I wish the same for all of you and your close ones.

[Paul60]

You miss my point. My point is why do you think it’s the guests responsibility in providing the guest with free travel insurance and hence refund them in full if there is a travel issue that prevents them from traveling?

Answer = it obviously isn’t. 

[Susan17]

You're welcome, @Rodney11 

Re your comment to @Nick-and-Jackie0..

".. asking guests to help float your business during a pandemic is not the best PR move in the long-term" 

Actually, Airbnb Inc. is doing exactly that, by sending out begging letters to guests, in hosts' names... 

How Can I Opt Out of "Contributions to Hosts" ? 

https://community.withairbnb.com/t5/COVID-19-Discussions/How-Can-I-Opt-Out-of-quot-Contributions-to-...

[Helen3]

What has travel insurance got to do with anything @Paul60?

Travel insurance doesn't cover pandemics.

This is an unprecedented situation.

Does your home insurance for STR for a business disruption clause that covers pandemics?

[Paul60]

If I’m refunding the guests 100% because they’re unable to travel then I’m effectively providing them with free travel insurance. 

[Jessica-and-Henry0]

@Paul60 

Many hosts including yourself seem to forget...... it's not just guests not able to travel. Hosts are not able to accept guests. You cannot expect to get money for a service you are equally unable to provide.

This has nothing to do with travel insurance. Hosts who keep moaning about travel insurance should really try to understand what travel insurance actually covers. 

Regardless of the reason, if a flight is cancelled, then the airline gives money paid for the ticket back to the traveler. Travel insurance does not cover the cost of a cancelled plane ticket. Rather, travel insurance will cover the difference for a more expensive alternative flight, or for an extra night at the hotel. 

[Nick-and-Jackie0]

I think you will find that a lot of the airlines are not issuing refunds during this pandemic, but are allowing for flights to be transferred to different dates.

If this works and is 'allowed' why cant our guests have a voucher to re-book with us only?
That way, we would at least be guaranteed their business.

[Gordon0]

Many airlines may encourage you to take a voucher, @Nick-and-Jackie0, but the advice here in the UK is to demand a refund [once the flight is cancelled/due to be cancelled].

[Paul60]

1.  My accommodation is fully available for the guest and I’m able to provide.  My issue is not if the guest has / doesn’t have insurance.  My issue is Airbnb expects the host to actually be the ‘insurer’.  

2.  If a flight is cancelled then the Airline refunds the passenger.  Likewise if I cancel my accommodation then I will refund the guest.  That is a poor example that you provided.  Does the airline refund you money if you missed your flight because your car broke down on the way to the airport?

[Nick-and-Jackie0]

100% agree @Paul60 !

[Simon2553]

@Rodney11  you wrote 

"@Paul60, most insurance policies have a force majeure clause which indemnifies them in the case of a unforeseen cataclysmic event; COVID is a text book definition of such an event. AirBnB has a version of cancellation insurance for hosts: the strict cancellation policy. The down side to this policy is in a non-pandemic world, hosts using this policy appeal to fewer guests."

I truly have no idea what you're trying to say with this.^^

The original question was why is it reasonable for hosts to assume the role of travel insurer, without receiving any premium for that coverage.

Some things wrong with your statement:

-the extenuating circumstances policy is part of a contract of adhesion, and is difficult to enforce legally if it violates the reasonable expectation of hosts.  It is implicitly at odds with the expectation of hosts per their option to select flexible, moderate or strict cancellation.  

-separate from above point, AirBnB has itself not abided by the strict and specific terms of its own policy

-Force Majeure protects the Insurer, not the insured (in your analogy, it would protect the host).  But further, in business contracts it covers when meeting obligation is impossible, and not simply inconvenient or not-preferred. Read more here 
http://www.rmmagazine.com/2020/03/18/force-majeure-and-insurance-considerations-for-covid-19-cancell...

-the strict cancellation policy is certainly not cancellation insurance for hosts. If a host needs to cancel, they refund the deposit to the guest, and get nothing.

[Rodney11]

Good points @Simon2553 , let me clarify what I was thinking:

AirBnB is a property booking platform that connects guests with hosts offering their own privately owned properties. AirBnB process the payment from the guest to the host and holds it in escrow to be released when the host fulfills their obligation by allowing the guest to check in to the property.

AirBnB made a strategic business decision to not offer cancellation insurance to either guests or hosts, relying instead on a "self-regulating" system of host cancellation policies which entailed a scale of financial penalties/incentives depending on the policy selected by the host for their listing. I would characterize the system as such: 

1. Flexible - Most beneficial to guest in case of cancellation, most beneficial to host in term of attracting guests at the expense of securing income. Hosts selecting this policy are essentially agreeing to be AirBnB's de facto "guest cancellation insurance policy"; guests wanting to protect themselves from the possibility of losing their escrow in case of a cancellation can filter for only listings offering this cancellation policy.
2. Strict: Least beneficial to guest in case of cancellation, most beneficial to host in terms of securing income at the expense of attracting more guests. This is AirBnB's "host insurance policy against guests cancelling".
3. Moderate: This is for the guests and hosts who truly believe AirBnB is a "partnership" between all parties and everyone gives a little bit in case of a cancellation. I have no clue how this affects guests' behaviour when considering a property. 
4. AirBnB have added a few tweaks here and there, including a 10% discount offer to guests but the host keeps the escrow no matter when the guests cancels, within the cancellation window of the  policy it is paired with. No guest has ever taken me up on this offer.
5. There are hosts on this platform who will only accept bookings from guests who agree to purchase 3rd party cancellation insurance. I suspect they attract fewer guests than even the Strict policy listings.
6. There is no "host cancellation insurance" because the host is running a business that supplies a service to the guest, and if the host cancels they should not receive the guest's escrow because they did not deliver the promised service. 

Every single one of the cancellation policies above is subject to AirBnB's EC policy. In my estimation, AirBnB are using the EC to invoke a "force majeure" situation in the case of COVID-19. As the EC is part of a contract of adhesion, AirBnB is offering a 25% payout to hosts based on the hosts' cancellation policy. Their legal team has most likely decided this indemnifies AirBnB from a class action suit brought by a group of hosts, especially those with Strict policies as they are the hosts who lost the largest amount of potential income by having their cancellation policy overridden. AirBnB will argue that the force majeure event, as per the EC, allowed them to override their normal cancellation policies, but they still made the effort to compensate hosts most affected. AirBnB offered 100% refunds to their guests to indemnify themselves from a guests' class action suit. 

Looking at this through what one could call a realpolitik lens, I would argue AirBnB are much more focused on satisfying their guests than their hosts because: a) the guests provide their revenue stream and b) there will always be more hosts.

I believe there are 2 options for hosts: 

1. Launch a class action suit against AirBnB. Personally, I believe this has a very low chance of succeeding (and only after dragging on for years in US courts). And/or
2. Start planning now for a future which may or may not include AirBnB.

I have chosen option 2. Other may disagree with my decision. The community is the place to discuss this.