Many Hosts across the U.S. and world have had to deal with the past months of Coronavirus, Covid-19 cancellations. While we’ve extensively covered each of the platform’s responses to these instances (VRBO sticking with hosts while Airbnb generally siding with guests), as a host it’s important to understand the nuances of the differences between the cancellation policies.
One of the most critical issues is the Airbnb cancellation policy. Numerous hosts have complained that they are not receiving the payouts that they are anticipating, even under Airbnb’s cancellation policy. One reason why this might be is because of the difficult to understand and quickly changing policies. While Airbnb originally decided to allow guests to cancel and receive a full refund, deeming that Covid-19 was an “extenuating circumstance” that allowed them to override host-set cancellation policies, the company later came around and established a $250 million dollar cancellation fund. Notably, Airbnb stated that “For eligible accommodations reservations, we’ll pay 25% of what hosts would’ve received under their cancellation policy.” But that might not be as simple as it sounds…
Here is an example of a hypothetical situation, where a host might be thinking they will be receiving funds under Airbnb’s cancellation policy but if not handled correctly – the host will be out of luck:
Suppose a guest books a property for $100/night for 4 nights. The host may be intending to receive $400 for the reservation. If the host (as many do) had a strict cancellation policy, under normal circumstances a guest would be entitled to no refund = $400 to host. Under the Covid-19 exception, a guest would receive a full refund and a host would be entitled to 25% of that full amount from Airbnb = $100 to host. While this is not great as a host, at least it’s something.
However, hosts must be extremely careful on how they approach a guest’s cancellation. When prompted by Airbnb, it may LOOK like the guest is requesting to cancel under Airbnb’s Covid 19 policy. Airbnb will ASK hosts if they want to “accept” and fully refund the guest. BE CAREFUL! Even if you are entitled to that 25% payout from Airbnb’s fund, if you “Accept” the guests cancellation, Airbnb will consider that a “mutual cancellation” under its policy – meaning guest gets a full refund and host gets nothing = $0 to host!
In other words, sometimes even if you are saying “yes” to a cancellation under Covid19 because of the $250 million dollar fund, you really need to say “NO!” in order to be paid out at least partially.