Editor's note: This article has been updated to reflect Airbnb's recently announced changes.
In order to prevent the spread of the COVID-19 virus, governments around the world have issued shelter-in-place mandates, quarantine orders, and border closures, effectively halting the travel industry entirely. Not only have hotels and airlines taken a massive financial hit, but short-term rental platforms like Airbnb, TripAdvisor, and VRBO are seeing the effects too.
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"All these billion-dollar corporations, none of them were ready for what's taken place," Robert Geller, founder of LGBT+ vacation rental site FabStayz and an Airbnb superhost himself, tells Hunker. In the vacation rental market, the financial impact of the decrease in demand doesn't just affect corporations — it directly affects hosts.
"Airbnb is a large source of my income, and COVID-19 has been devastating as a host," Superhost Sarah Graham, who rents a guesthouse and a vintage camper on her property outside of Austin, Texas, tells Hunker. "Cancellations started during spring break, one of the busiest times of the year, and have continued through the month of April."
While most rental sites usually allow hosts to set their own cancellation and refund policies, many have overridden the hosts' policies in favor of a complete refund for guests. It's a method that's fair to guests, but it's created a bit of a stir among hosts, most of whom are not receiving any monetary assistance from the platforms. Rental sites are in a tough position to keep both hosts and guests happy while making the best business decisions for the company.
"There are different perspectives being shared. Hosts are typically travelers themselves, so they understand both sides," says Geller. "But where I saw a big difference was in each platform's messaging and how it was received by hosts."
Airbnb's coronavirus policy was updated in May. The platform will give full refunds in cash or credit "for cancellations of COVID-19 impacted reservations books before March 15, for check-ins up to June 30, 2020." On March 30, the company announced that if guests cancelled accommodations for stays between March 14 and May 31, Airbnb will pay hosts "25% of what you would normally receive through your cancellation policy." The company will pay $250 million to help hosts with these costs; superhosts can also apply to a new grant to cover rent/mortgage. The company stated it has also "worked together to secure support for hosts in the US government's recent COVID-19 Stimulus Bill.
VRBO and HomeAway have taken a different approach. According to Geller, the company encouraged hosts to consider full refunds for guests who could no longer travel, then offered to reward those hosts who issue full refunds with an improved ranking in their websites' search results.
"VRBO and Expedia said 'We'll play it in your favor if you refund those fees,'" says Geller, who adds that among his peers, "that message was very well received, in contrast to Airbnb's message." It should be noted, however, that VRBO and HomeAway have required hosts to issue a 50% refund if the they cannot work out an independent solution with their guests, like offering credit for a future stay.
Airbnb hosts, on the other hand, have no choice in the matter. "I was working out the COVID-19 cancellations guest-by-guest when Airbnb stepped in and forced all hosts to refund 100% of all payments and deposits while offering no support to their hosts," Denise Kowal, Airbnb superhost and owner of Burns Square Historic Vacation Rentals in Florida, tells Hunker. "I am really disappointed in them."
Hosts have also voiced frustration about a lack of assistance from the platform beyond communication about the new policies (like many companies it's inundated with queries, and its help center currently reads, "If your reservation is more than 72 hours away, please contact us closer to the check-in time.").
"Airbnb has been completely absent," says Graham.
Interestingly, not all hosts have seen the majority of their guests cancel bookings. "I've only had three cancellations," Amy Leavitt, who hosts in London through rental site Plum Guide, tells Hunker. "However, I can tell you that I had to cut my rates by 50%. But typically, January, February, March, and April are very low on occupancy, and I am hopeful that I can get more bookings when the air clears."
Others have even seen an increase in bookings. "We own a home on the Connecticut shoreline that we primarily rent, and while many vacation rental hosts across the U.S. have likely seen an increase in cancellations, we've seen an uptick in interest specifically from folks looking to escape New York City," Amanda Duff, a VRBO host, tells Hunker.
Whether or not they're facing difficulties with bookings and cancellations, most hosts have decided to pivot their business away from leisure travelers and focus on those impacted by COVID-19. "This means promoting their properties as places to self-quarantine, or safe havens away from the city that allow working remotely," Omer Rabin, managing director of the Americas at Guesty, a company that produces software to help hosts manage bookings across multiple platforms, tells Hunker. "Some hosts in urban cities are offering discounted rates on 14-day stays for guests who must quarantine after coming back from abroad and wish to stay away from their families."
Other hosts have been stepping up to help their neighbors. "I have been hosting a few misplaced individuals who need a place to stay locally," says Airbnb Superhost Heather Bise, who rents rooms in her home in Cleveland, Ohio and has seen a 70% decrease in income this month. "One guest in particular has stayed in my home off and on for over the last six months. His story is sad and common right now. He is an Uber driver, and since the start of the COVID-19 mandate to stay at home here in Cleveland, his business started to plunge, too." Bise learned that her guest was living in his car, so she offered to house and feed him — he pays what he can.
But financial relief for hosts might be on the horizon. "I haven't seen yet that Airbnb is providing resources, but we did receive email communication that they are actively lobbying on behalf of hosts to be included in the rescue package that's being negotiated in Congress," says Hunker's Creative Director Paul Anderson, an Airbnb host.
When the pandemic ends and travel resumes, the short-term rental industry will likely see major changes. Some hosts, for instance, might choose to leave the popular platforms behind entirely.
"There's already a 'book direct' trend, a movement where hosts are looking to get away from paying those fees that are going to the short-term rental platforms," says Geller. "But maybe the short-term rental platforms will come back and offer more services and options so that hosts who are paying fees will see some added value."
One such service, Geller suspects, will be that the vacation rental sites will take a cue from hotels by offering two rates: a lower one with a stricter cancellation policy, and a slightly more expensive one with a more lenient cancellation policy. There also might be additional insurance options, such as what you're offered when you book flights or buy tickets to an event, though it remains to be seen whether or not those policies will cover epidemics and pandemics (most currently do not).
It'll be some time before the industry recovers, but despite the setbacks, the hosts we've spoken to are keeping their listings up and open throughout the pandemic — and remaining hopeful for the future. "Moving forward is the only option," Leavitt says.