Airbnb’s cancellation refunds to guests in the early stages of the pandemic provoked a storm of objection and a strong sense of distrust in hosts towards the company’s policies and strategies.
Since then, hosts view any updates from Airbnb with a sceptical attitude and are stuck in the mindset that Airbnb takes its guests’ sides and prioritises their rights over those of the hosts’.
As a result, a change in Airbnb’s refund policy has caused unrest in the minds of vacation rental managers and homeowners. They believe the new Airbnb Rebooking and Refund Policy seems to favour guests and has the potential to be troublesome for professional hosts. Let’s dig into the new Airbnb refund policy and find out why Airbnb hosts are not happy with it.
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Airbnb’s New Refund Policy Update
Airbnb refund policy explains how the company handles refunds should
A. hosts cancel a reservation;
B. a Travel Issue disrupts a guest’s stay.
In Airbnb’s new refund policy, which will apply to all bookings made on or after April 29, 2022, guests are given a 72-hour window – instead of 24 hours – to report their travel issues.
‘Where a guest demonstrates that timely reporting of a Travel Issue was not feasible, we may allow for late reporting of the Travel Issue under this Policy.’ It seems like, in some cases, guests even have more than 72 hours to report their travel issues.
Suppose Airbnb determines that a Travel Issue has disrupted the stay. In that case, they provide a full or partial refund and, if needed, may assist the guest in finding comparable or better accommodations.
The hosts are in charge of paying the amount of the refund. In addition, they must reimburse all the expenses incurred on Airbnb in assisting a guest with finding and booking a new accommodation.
Why Are Hosts Skeptical about the New Airbnb Refund Policy?
Airbnb hosts are unhappy with the guest report period extended to 72 hours. They believe this gives scammers more time to make fake documentation and take staged photos or videos as evidence. They ask for full or partial refunds and stay at vacation rentals free of charge. In addition, guests might ask for lower rates and blackmail their hosts and threaten them to make a report within three days.
With this new refund policy, property owners and managers have to refund guests and are in charge of reimbursing Airbnb for the money paid to relocate the guests to another property.
Imagine a host’s vacation home is not liveable for the guests due to a sudden issue in its plumbing system. In this case, the host has to pay the refund, Airbnb rebooking assistance costs, and any difference in price between what the guests booked their place for and the price of the new property found by Airbnb. Moreover, the host has to pay to fix the issue in their rental, lose the revenue from the stay and possibly let go of their Superhost status.
Why Has Airbnb Decided So?
Airbnb hosts need financial certainty and minimised cancellations. However, vacationers seek maximum flexibility and easy refunds. Airbnb has a double-purpose market with hosts and guests whose interests don’t necessarily align. Nevertheless, the company must support both sides to guarantee its long-term success.
Airbnb has always rewarded hosts with flexible cancellation policies. It also has a flexible cancellation search filter, allowing guests to find listings with the cancellation policy they prefer. Hosts can enhance the visibility of their listings in search results pages by taking more risks, but it helps the online brand attract more guests and receive more overall bookings.
In this respect, the new Airbnb refund policy aims to make hosts think twice before cancelling a booking for no good reason. It can help guests trust the company and foster loyal relationships with Airbnb.
Airbnb also claims that they have also formulated this new policy to support both hosts and guests. They will have a longer reporting window and more time to negotiate travel issues and settle the disputes before the company gets involved.
What Are the Solutions for Hosts?
Whether or not the hosts think Airbnb’s new refund policy favours guests and reveals subtle signs of indiscrimination will not change any rules. As a result, hosts must think of ways to establish their own protection system against free cancellations and refunds. In this case, our recommendation would be obtaining vacation rental insurance, screening your guests and reducing reliance on online booking platforms such as Airbnb by building a well-designed and developed direct booking website.
Vacation Rental Insurance
Online booking websites like Airbnb and Booking.com use free cancellation and refund policies as a primary tool to build trust with their guests and win more bookings. These plans expose the hosts to a wave of threats that can severely damage their vacation rental business profitability.
Obviously, these OTAs (Online Travel Agencies) will not protect your business from financial risks as far as their own interests are concerned. Therefore, it is sensible to take out vacation rental insurance against cancellations and get covered for the possible costs of fraudulent attacks.
Another effective way to minimise reservation risks is to vet your Airbnb Guests before accepting a booking. Tenant screening is a measure taken by rental property managers to assess prospective tenants to decide if they are trustworthy and less likely to commit any fraud or crime.
To avoid such incidents, which harm your rental business and its reputation, you need to verify your prospects’ personal Information and check their Airbnb profile to view their background and read their reviews. Moreover, you can contact other hosts or even ask your guests to sign a legal rental agreement before checking them in.
Complete reliance on OTAs means putting all your eggs in one basket and leaving your business defenceless against the risks of their policy changes and slowing down your business growth.
Stop paying hefty OTA commissions, have complete control and independence and protect your business against the risks of restrictive terms and conditions such as cancellation policies by building a high-quality direct booking website. You need to have the freedom to make your own rules and manage your booking process to set yourself up for success.
Guests are more likely to book listings with a more flexible cancellation policy; yet, this exposes the property managers to the hazardous financial risks of free cancellations and Airbnb’s new refund policy.
As a result, hosts assume that Airbnb’s policies and strategies favour its guests rather than the hosts. Airbnb’s new refund policy has stirred some serious impatience and anger among the hosts.
What do you think about the new Airbnb refund policy? Do you think their policies are balanced enough? Share your thoughts with us.