After facing backlash from hosts for changing its cancellation policy in response to Covid-19 — offering guests full refunds without penalties — the startup’s CEO has announced a relief package and issued an apology.
“I’m sorry that we communicated this decision to guests without consulting you—like partners should,” Brian Chesky said in an open letter to hosts. The company has established a $10 million relief fund for “superhosts” who rely on Airbnb for their income. The company will also cover 25 percent of what hosts would have been paid from their cancellation policies for reservations with a check-in date between March 14 and May 31.
But some hosts say the relief doesn’t go far enough. Airbnb’s platform has three cancellation policies to choose from and the strictest one guarantees hosts a 50 percent refund on the total booking value, meaning the relief package will cover just half of that — or quarter of the value.
“It makes for a nice press release but it does nothing to alleviate hosts’ dire financial straits,” one told The Real Deal. “I know many hosts that have already sold or listed their units for rent.”
Airbnb has made several public appeals in recent weeks as it struggles to navigate the economic fallout of Covid-19, which has ground global tourism to a halt and caused bookings to plummet. This week, the company told employees it would suspend all marketing and pause hiring as it tries to quell hundreds of millions in losses. Chesky has not ruled out the possibility of layoffs.
Before the pandemic hit, the company was on somewhat of a public-relations blitz ahead of a planned 2020 public offering — announcing a raft of new measures to address safety issues on its platform. The company, which was last valued at $31 billion, has declined to comment on whether its IPO plans have changed in light of the virus.
The rift between Airbnb and its hosts started mid-March, when the company expanded its “extenuating circumstances” policy to assist travellers around the world whose plans had been derailed by the pandemic. The policy change meant guests with bookings made before March 14 could cancel their accommodation and get full refunds on their bookings, without forfeiting any to hosts.
In an interview March 18, superhost Joy Rose told TRD she was “shocked” by the decision and how it was communicated.
“We are the worker bees of Airbnb,” she said. “We’re the ones doing the labor; we’re the ones cleaning our houses and making them great. So to not consult us, and to unilaterally make this decision, is extremely harmful.”
Reached for comment Tuesday, Rose said she didn’t think the offer of 25 percent back on cancelled bookings was adequate.
Airbnb has invited hosts who meet an eligibility criteria to apply for funding in late April. Applications will then be reviewed by a “specialized team” who will “select only those hosts who demonstrate the most need,” according to the company’s website.
Rose, who relies on income from Airbnb and has lost at least a dozen bookings to the pandemic, said she was wary of trying to navigate Airbnb’s relief program, which she predicted would create more administrative headaches for hosts.
“Like everyone else, I don’t know what the ‘f’ is going on in my world right now and you’ve added 12 extra steps to make it more confusing,” she said.