Worth it to use the new "Non-Refundable" option?

[Rich-and-Yan0]

Greetings, Airbnb Community. We are new hosts, not even a full week into hosting yet, and when we were setting up, we saw that there is a fairly new feature, still in BETA mode, called "Non-Refundable." 

I imagine that most of you are already familiar with this, but for those who are not, Non-Refundable basically give guests another option when they are considering booking your place to save an additional 10% if they choose it. But of course, once they do, they cannot cancel their reservation without losing their money.

Here's my concern with it. Imagine that a guest chooses this option to save money, but then days before their arrival date, there's a family emergency for the guest, or something like that. The guest writes and says, "I know that I chose non-refundable, but XXX just happened, and so we'd really appreciate it if you would give us our money back."

In this situation, the host is kind of screwed. If they don't give the money back (or a part of it), then they will almost certainly end up getting a bad review when they did nothing wrong. But if they do give some or all of the money back, then they lose the earnings they could have made from another guest. It is also only days before the booking date, meaning that the chances of booking someone else in for those dates is very, very low. 

Based on that, do you think it is worth it to include the Non-Refundable option? I read that it has been around since the end of last year, which means that at least some of you must have used it by now. So, we'd really like to hear your experiences with it, and find out if, after using it, you decided to stick with it or eliminate it from your listing.

Thanks a lot.

[Alexandra316]

@Rich-and-Yan0 I was briefly using it, then turned it off. As you say, most guests are just using it to get a 10% discount and I didn't find it had any benefit. If guests are determined to get a refund, they will almost certainly get one, in my experience, no matter what cancellation policy is selected.

A suggestion for improvement would be if they allowed you to turn it off a certain number of days before the booking, i.e. they could have the discount if they booked 6 months out, but not if they booked a week before arrival. I don't think it makes sense to offer it for bookings that are imminent. Presumably, if they're booking for this week or a week or two out, they know their plans and aren't likely to cancel.

[Rich-and-Yan0]

@Alexandra316 Thanks for your reply, fellow Canuck. Yeah, I only turned it on because we are a brand-new listing, as I've said already, and they recommended it for getting bookings and helping to build a reputation as a host. And in fairness, with the 20% discount we were offering to our first three guests combined with this, we got three bookings straight off to what look to be good guests. (All families, good reviews, recommendations from other hosts, etc.)

But we're also discovering lots of actual or potential weaknesses with the site as we go along. In addition to this one, we learned last week that guests who don't have our stated prerequisites for booking (government ID, previous Airbnb history, recommendations from other hosts) were still allowed to send booking requests that had to be accepted or rejected by us. I thought that they would automatically be blocked from making a request. But no, they weren't, and I had to decline them, which put us off to a bad start.

So now my defences are up, and I'm trying to avoid things that might get us a bad review--and this came to mind today as a potential problem down the road. I'll wait to see if anyone else comments on their experience, but I may take your advice and turn it off. We got our initial bookings, and so it has served its purpose.

Cheers.  

[Alexandra316]

@Rich-and-Yan0 Just looked at your place: what a stunning spot. Not surprised you want to be very careful with who you allow to book, especially as you're offsite.

Yes, the thing with being able to send requests even when they don't meet your booking criteria surprised me when I was new as well. I will say though that most of my guests - certainly more than half - are first-time Airbnb users who are wonderful,  and the only real, major issue I've ever had was with someone that had positive reviews from other hosts. There is no substitute for talking to your potential guest and trusting your gut.

[Rich-and-Yan0]

@Alexandra316 Thanks, we're glad that you like our place. And yes, we do have to be careful, as our house managers, who also helped us with the decoration of our place, are also hosts who have had some nightmare experiences this very summer with young people who were visiting the region for no other reason but to party and make a mess. Needless to say, this made us quite defensive as well.

Thank you as well for your advice on "talking to your potential guest and trusting your gut." We will certainly keep that in mind. I just looked and saw that you are a Superhost with nearly 200 reviews, and so there is nothing quite like the voice of experience to help guide you when you are new at something. (Oh, and your two places look very clean and cozy, too. We'll definitely keep them in mind if we are back that way again.)

[Shauna28]

I’ve had no issue and most of my recent guests have taken the non-refundable option. I tend to fall on the more optimistic side and surmise that guests who attempt to cancel last-minute will not be granted a refund, especially since extra steps must be taken on the guests part to confirm the discounted booking.  

[Rich-and-Yan0]

@Shauna28 Thanks for the response and also the new information. We didn't realize that the guest has to go through extra steps in order to confirm a discounted booking. I'll be sure to look into that today. Cheers.

[Branka-and-Silvia0]

@Rich-and-Yan0 

the first problem is - the guest will always get a refund in case of extenuating circumstances.

The second problem is - you have to raise your prices by 10% to be able to offer a discount. When you raise the price your search position will drop.

my experience is - guests rarely cancel on Airbnb but on Booking.com about half of them cancel.

[Rich-and-Yan0]

@Branka-and-Silvia0 Oh, that's really good to know about Booking.com, because we had originally considered using them in addition to Airbnb. But as we're not at our villa full time and have someone else taking care of it for us, then it seemed too much to try to manage two platforms from abroad.

Anyway, we didn't know the point about guests getting refunds automatically when they have extenuating circumstances. That's useful to know as well. And we're still figuring out the pricing thing, about raising and lowering, and how all of that affects you in the search order. It sure is a big learning curve! Cheers.

[Solveig0]

Regarding accepting booking requests - I've mostly had great experiences with guests, I can count on one hand the bad experiences I've had. However, these bad experiences have all come from guests that had the requirements, had reviews and could do instant bookings. You never know. Follow your gut and do what's right for you. 

I use the most liberal cancellation policy. I've only had people cancel on me once. I had a strict cancellation policy to begin with, but that's the one time someone needed to cancel (due to an emergency) and that just left me feeling bad about the whole thing (though in the end we contacted Airbnb customer service and they refunded the guest on my request, so all went well).  

[Rich-and-Yan0]

@Solveig0 Thank you for the information, and also for letting us know about your cancellation policy. We set ours to "moderate" after having read many, many comments from different hosts who had different reasons for choosing the ones they had chosen. You seem fortunate to have been cancelled on only once; some hosts said that it has happened to them frequently, which forced them to move to a stricter policy.

I reckon we'll try "moderate" out for awhile, and if we have any issues, then we'll figure out how to deal with them when they come up. Hopefully none will, but we're learning fast that if you're hosting, then anything can happen. 

As for the non-refundable setting and the cancellations, you're the second host who has told us that they had more problems with people who had the requirements they had asked for than with the ones who didn't, and that we should just trust our gut. That's sound advice from the voice of experience, and so we really appreciate it. 🙂

[Natalie633]

My worry is that this will add confusion to new guests using airbnb. If they don't choose it, they might expect their stay to be refundable - even on last minute cancellations. I don't see how this would particularly benefit me, and I'm concerned that it would add an additional layer of confusion.

[Rich-and-Yan0]

@Natalie633 Yes, if you look at the thread above, you'll see that other hosts have raised the same point. 

We debated whether to leave it on or not and decided that we would for now, but we plan to take it off if and when we get 10 good reviews--if we ever do (4 so far). We started renting late due to some bureaucratic setbacks and ended up missing almost all of peak season where our villa is, and so the rentals have been coming in slowly but steadily. The good news is that we did have a few fairly long bookings (one for 8 days, another for 10, another for 15), but it still takes awhile to get those reviews.

Anyway, thanks for the feedback. Definitely food for thought.