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.

[Mark3205]

Absolutely correct, i made a very similar post earlier today, lets hope if enough people make some noise they will make the correct changes to the scheme

[Cabo-Platinum0]

Class Action:  https://www.change.org/p/airbnb-airbnb-breach-of-contract-class-action-lawsuit-violate-cancellation-...

[Bob40]

I'd go so far as to say most hosts will receive nothing. Airbnb's cancellation policies are based on when it handled trivial sums for renting an airbed on your floor! Now there are 6 policies for hosts to choose from, it gets worse not better!!! Cancellation insurance and no refunds would have sorted it.

[Luke279]

Isn't this what we signed up for though? Yes most hosts wont receive a penny but that's the cancellation policy they implemented to gain bookings right over those who had strict policys? 

I understand it's difficult but we all make that personal choice to rent out our properties as short term lets rather then having tenants' in place, as we all know this makes more money.  Yet the market is flooded with listings, so Airbnb gave us options to increase our bookings which we chose right? 

Bad situations in this world we live in happen all the time but sadly this time it effected everyone world wide rather then something isolated, if it was isolated the uproar wouldn't have been like we are seeing, it only is right now as its on a global scale. 

None of us have any idea what the next 12months will look like, lockdowns could be in place globally for a long time, and then a second wave could happen again when winter comes back around if no vaccine is found. What then? We still blame the platform we chose freely to use? 

Airbnb didn't have to offer us anything, 25% (or 12.5% shall i say) is better then 0%! Adapt to the situation, rebuild and look to the future, otherwise you wont have anything left and all the hard work from before will be meaningless. 

[Niklas24]

To answer your question, I can't see that we did sign up for this compensation policy when we decided on what cancellation policy to choose, because it did not exist at the time.

As I see it, none of the cancellation policies apply, strict or flexible because they are overridden by the excruciating circumstances clause in the AirBnB terms and conditions. As a totally separate issue from the cancellation policies, AirBnB has decided to compensate hosts for cancellations caused by the pandemic and there is no absolute reason that that policy should be tied to the hosts' cancellations policies. Alternatively,  AirBnB could have decided to compensate all hosts or only hosts that have ratings above some threshold, just to give a few examples. I have a hard time seeing what business logic it serves to reward in particular the minority of hosts with strict cancellation policies.

[David3267]

does Finland have the concept of flexible flight booking (for a premium) or non flexible flight booking for rock bottom pricing?

[Caroline257]

Actually FInnair have been very generous. I had flights booked that were cancelled. They were non flexible rock bottom flights, and at the very most I would have got 25% back. Because they had to cancel the flight, they are refunding all the ticket cost unlike most airlines, that are only giving credits and saying normal cancellation terms don't apply as it is a pandemic. SO actually I think Finland have more than a concept of what is fair.

[Rachel367]

What Du you mean with "Does Finland have he concept...) I am a host from Finland. Do you mean Finnair?

[Vanessa589]

@Niklas24 You are absolutely right. Because until this week, my dashboard said "pending/processing," I believed that we might receive some kind of payment, but when I checked today, all of our bookings that were previously marked pending now just say "not applicable."  What a crushing blow.  As you said: AirBnB could have decided to compensate all hosts or only hosts that have ratings above some threshold, just to give a few examples. I have a hard time seeing what business logic it serves to reward in particular the minority of hosts with strict cancellation policies.

It's infuriating that they are trying to play the PR game of "look at us and how good we are being to our hosts."  It's going to come back and bite them in the end, because it's one thing to just honestly say, "Look this situation is terrible for everyone and we're very sorry, best of luck" and it's quite another to pretend to the outside world that you are going to be super generous and helpful when in the end it's all just smoke and mirrors.  Corporate BS as always.

[Pat271]

@Niklas24  Why do you think cancellations of short stays are more readily compensated than the longer stays?

@Luke279  I agree with everything you said.  I also have a flexible cancellation policy on one of my two listings, but I chose that policy so that I could be more appealing to guests than those with more strict cancellation policies.  I have had this competitive advantage ever since I signed up; many have had this advantage for years.  Now, the other end of the policy has reared its ugly head, and the result complies exactly with the policy we ourselves set.  Unfortunately, we aren’t able to have it both ways.

[Luke279]

@Pat271  Thank you!

Don't get me wrong though I had my head in the sand for a week before i realised it wasn't going to pay the bills or sort the situation out, every day that past it got worse and worse, but I had to pivot to survive so I personally switched to short term monthly lets aimed at key workers. This quick choice allowed the business to stay on its feet for the next few months.

It's that initial shock to the system when you loose £X amount, you panic, you want someone to blame, and airbnb was the easiest entity to blame even though we chose them to work with, not the other way around..

I use flexible and strict cancellation policies year round depending on demand and the season and thats the options given to us that we choose to work in to our business plan, that I would hope most realise, this is a business! The situation we are all in is horrific, its global, but we all chose to get in to this industry full well knowing there wasn't a guarantee it would work. 

Good example: The property you have has an unexpected bad weather season then normal, it decreases bookings, increases cancellations, but we cant blame airbnb or ask for compensation when guests cancel right? It was still our choice to use the policies we had and we all gamble with that, some loose and some win thats business. 

[David3267]

Hurrah for common sense!

[Niklas24]

@Pat271you can read the cancellation policies here: https://www.airbnb.com/home/cancellation_policies

[Pat271]

@Niklas24  I know how the different cancellation policies work.  I’m asking why you think longer stays will be more readily compensated than shorter stays.  In your own words:

“Another factor, although less important, is that cancellations of short stays are more readily compensated than the longer stays.”