I work with 4 other hosts in Boston; together we have 18 Airbnbs in the city of Boston. And we all have the same serious concern with the EXTENUATING CIRCUMSTANCES policy (I will abbreviate as "EC" for this message) as it relates to HOST CANCELLATION POLICIES.
MAIN CONCERN: The cost of travel risk is unfairly forced onto hosts in the Airbnb marketplace, without any protection for the host.
When I travel, I always purchase travel insurance to protect against "ECs" that could result in me in losing money spent on unused reservations. Whether I am staying at a hotel, lodging house, motel, going on a cruise, etc, I will rarely if ever get refunded for a reservation I cannot make due to an "EC". This cost of this travel risk has ALWAYS BEEN PLACED ON THE CONSUMER. Another example, some hotels offer discounted "non-refundable" rates vs. more expensive "refundable" fares....another way of charging for this risk without the consumer having to go out and purchase travel insurance. It exists everywhere in the travel industry, not just hospitality (same example for air fares). It is only on AIRBNB that guests get FREE TRAVEL INSURANCE AT THE EXPENSE OF THE HOST. THIS IS NOT FAIR!
WHY IS THIS UNFAIR TO HOSTS?
What happens when a guest cancels and is fully refunded because of the "EC" clause in the cancellation policy. First, the host gets nothing, and the dates become available for booking again. Then, the majority of the time, those nights either don't get booked at all, or may get partially booked at a MUCH LOWER RATE. 99% of the time, the host severely loses. Not Airbnb...not the guest, THE HOST. And unlike other risks to my business, I can't even protect myself with insurance (which I shouldn't even have to since I CLEARLY DEFINE MY CANCELLATION POLICY BEFORE BOOKING).
Real life example that happened recently:
$751 reservation cancelled a few days before with an "EC". I called, pleaded my case, no help from Airbnb. Best case scenario happened, I got a partial booking and recouped 56% of the original payout. Still lost hundreds.
Luckily, this was a relatively small reservation for the peak season. What if the same thing happened to a 1 week, or 2 week or longer reservation? I'd lose thousands, and have a net negative month. If it happens during the slow season (when I already lose money as it is), an "EC" event costs my 100% of my payout almost every time! It is a huge threat to my business, and has me strongly considering other marketplaces besides Airbnb as a result.
It's not fair to leave your hosts exposed like this!
Suggested Solution:
OFFER INSURANCE, LIKE EVERYONE ELSE. If a traveler wants to be protected from "ECs" they should pay AIRBNB for travel insurance. Yet another way for Airbnb to make money.
That way, travelers can feel safe if they are willing to pay for the peace of mind.
Hosts aren't exposed to an unfair risk they can't protect against.
Airbnb makes extra revenue from the travel insurance business.
Thoughts?
