Airbnb Cancellations Host Compensation

Airbnb Cancellations Host Compensation announced by Airbnb’s CEO Brian Chesky yesterday is not what you may think it is. While he’s great at PR, it is questionable what his intentions actually were with the announcement. What you heard may have been that which you’d like to hear, not what was actually said. Once you start looking at the details of what they announced, you may quickly become disappointed. Moreover, merely by them backtracking a bit, we should not allow Airbnb to win over our hearts as hosts.

Airbnb Cancellations Host Compensation – What Was Announced?

Airbnb announced that it would provide a 25% compensation to hosts whose cancellation policies were overriden due to the COVID-19 situation. Chesky also announced that a special $10 million Superhost Relief Fund will be set up that will provide grants to help Superhosts navigate the crisis.

Airbnb Cancellations Host Compensation – 25% Payment

25% back. Great. What exactly did they announce?

When a guest cancels an accommodation reservation due to a COVID-19 related circumstance, with a check-in between March 14 and May 31, we will pay you 25% of what you would normally receive through your cancellation policy.

https://news.airbnb.com/a-letter-to-hosts/

In an article that they published in the Airbnb Resource Centre detailing the Airbnb cancellations host compensation packages, they provide further details:

For a reservation to be eligible under our extenuating circumstances policy, it must have been for accommodations and booked on or before March 14 with a check-in between March 14 and May 31, 2020. If a reservation is covered:

  • Guests will be able to cancel for a full refund for COVID-19-related circumstances.

  • Airbnb will pay 25% of what you would’ve received for a cancellation based on your cancellation policy. For example, if you would normally receive $400 USD through your cancellation policy, we’ll pay you 25% of that—or $100 USD

  • We’ll send an email with more details in early April to hosts who are getting a payout. Future payments from the fund will be made on a monthly basis to hosts with qualifying cancellations

  • This policy will also apply retroactively, including any cancellations you may have had since March 14.

What does the 25% payment by Airbnb actually mean?

As ever, the devil lies in the detail. It’s not 25% of the funds you would have received had the guest stayed. Nor is it the money you would have received had the guest cancelled. It’s 25% of the money that you would have received had the guest cancelled. In the best of cases, unless the check-in was scheduled to happen within 7 days, that’s 25% of 50% of the booking value, which means 12.5% of the booking. In other words, you are receiving less than what Airbnb would have made on the booking. Based on reports that have come to light, Airbnb issued vouchers to guests instead of refunding them the Service Fee. So essentially, Airbnb is preserving their own cashflow. They have now decided to give that cash to the host, to quell the uprising!

Do not allow this to silence you. They are not giving us what we are entitled to as per our conctract and cancellation terms. Airbnb owes us all the full amount that we were due as per the cancellation terms. Guests should have taken out travel insurance to protect them in case they are unable to travel.

What’s more, the announcement seems to have actually been a cover-up for a nastier announcement. Nice trick, but we’ve spotted it. Airbnb have now extended the check-in period during which they are allowing guests to cancel free of charge. Guests can now cancel any stay with a check-in date up to May 31st. On top of everything, hosts will need to part with an additional 75% of the fees that Airbnb would have owed them prior to yesterday’s announcement had a guest cancelled a future stay post April 14th. And that of course just opens the doors to this being extended indefinitely into the future.

Superhost Relief Fund Grants Announcement

The open letter sent by Brian Chesky also announced the following:

We are creating a $10 million Superhost Relief Fund

This is designed for Superhosts who rent out their own home and need help paying their rent or mortgage, plus long-tenured Experience hosts trying to make ends meet. Our employees started this fund with $1 million in donations out of their own pockets, and Joe, Nate and I are personally contributing the remaining $9 million. Starting in April, hosts can apply for grants for up to $5,000 that don’t need to be paid back. You can go to airbnb.com/superhostrelief for more details.

https://news.airbnb.com/a-letter-to-hosts/

What do I think of this?

So we already knew that Airbnb was happy to make PR announcements that make it look good at the cost of us hosts. But that they were willing to go this far and get their employees to pay up for their PR stunts was a new one. As nice a gesture as it is, I for one want to see how they will implement this and who will actually benefit. Why should only superhosts benefit? Why only those who’ve been superhosts for a year and currently hold the title?

Did someone who joined Airbnb earlier and used to be a superhost a few years ago not provide more value to the ‘community’ than someone who became a superhost a year ago? Surely those who have contributed more financially to Airbnb (large scale hosts) should benefit just as much as those who rent out a place in their house? In the end they are the ones who have paid more towards Airbnb’s profits over the years?

My heart goes out to all those affected as hosts, and I do not wish to deny them who qualify what Airbnb is offering their part. I just question their intentions with the fund that they have set up.

How can I protect myself?

Although it may not have felt like it, we are partners.” was another line that good old Brian threw out there. What sort of partner does he consider himself to be when he is taking from hosts what is rightfully theirs, and then backtracking to offer a fraction of that back? Not a very upright and honest one in my opinion.

Those of you who have been following Zeevou for some time, know what my take on a true partnership is. I believe that a partner should be there to help a business grow together. That means, each host needs to be in control of their own business, as a true partner. We have been working very hard at building tools to allow hosts to do just that. And what’s more, we have released the majority of those for free to the community. And no, we do not have war chests the size of Airbnb’s. But I believe in the power of unity. And I believe that if we all come together, we can and will bring about The Direct Booking Revolution!

___

Na’ím Anís Paymán, Director at Peymans, a provider of Serviced Accommodation across the UK and further afield.
https://naimanispayman.com/

3 thoughts on “Airbnb Cancellations Host Compensation”

  1. Thank you for your comprehensive analysis of Chesky’s announcement.
    As a host and property manager, I recognize that we’re stronger together, and we know how much we both need each other. But, in times of stress, our true colors shine through. It would be good if moving forward we to be treated as partners, as you mentioned, instead of having our needs (partially) addressed later.

  2. Some corrections to the information provided here:

    1) “In the best of cases, that’s 25% of 50% of the booking value, which means 12.5% of the booking.”

    In the best of cases, the host will actually get 25% of the entire booking value. This happens if the host had a strict cancellation policy and the guest cancelled 7 days or less before check-in.

    2) “Did someone who joined Airbnb earlier and used to be a superhost a few years ago not provide more value to the ‘community’ than someone who became a superhost a year ago?”

    It doesn’t mean that they have been a Superhost for the past year. The actual minimum criteria is having been a superhost for 1 year in total. So 4 quarters out of the host’s entire hosting career. However, a more recent update says this:

    “To start, we’re inviting the longest-standing members of our community—which typically means they’ve had Superhost status for four or more years.”

    This means hosts that have achieved Superhost status for at least 16 quarters in their hosting career will be invited first to apply for a grant, if they meet the other criteria.

    1. Thank you for your comments, we have updated the article to mention the possibility of a super-strict policy with a check-in with less than 7 days to go. The information provided at the announcement was that you had to have been a super-host over the last year, so it seems that that has now changed.

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