Airbnb’s business model relies on making both hosts and guests happy, but the startup is facing pushback from both sides as it flip-flops over who should cover the cost of cancellations.
With demand for short-term rentals falling amid a global coronavirus pandemic, the company is now seeking government support for its hosts.
But many of them have voiced anger at the startup’s recent decision to expand its “extenuating circumstances policy” in response to the pandemic, saying the move has further compounded their financial pain. The change means guests with bookings made before March 14 can now cancel their accommodation and claim deposits held for hosts, without incurring a penalty.
Airbnb superhost Joy Rose, who owns properties in New York and Florida, said 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.”
In a letter sent Tuesday, Airbnb’s policy and communications chief, Chris Lehane, sought help from the government. He called on House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to consider several tax breaks for hosts, many of whom he said depend on income from Airbnb rentals.
Before the shift, the startup had faced criticism from the other side of the transaction: Many travelers who canceled bookings because of the pandemic were outraged to find their situation didn’t constitute an “extenuating circumstance” according to the company’s policy, meaning they couldn’t get refunds.
Initially, the policy only applied in China, South Korea and Italy, where the virus spread was at its worst. As the situation developed, the company announced March 13 that the policy had been extended to the United States. The next day, it was expanded globally.
In an open letter to hosts published March 17, the company acknowledged the decision “has caused incredible hardship for many of you.”
“We did not want guests making the decision to put themselves in unsafe situations and creating a public health hazard because of a commitment to their bookings,” the letter said.
Airbnb has been hit hard by COVID-19, which has led to a 20 percent decline in booking revenues since February, according to an analysis by The Real Deal.
The timing of the outbreak could not have been worse for the company, which was preparing for a highly-anticipated public offering this year.
While there have been reports that the IPO will now be pushed back, a spokesperson for the company declined to comment on the timeline, referring TRD to a brief statement issued last year announcing the company’s intent to go public in 2020.
Write to Sylvia Varnham O’Regan at so@therealdeal.com