Airbnb’s cancellation policy has been further extended.
According to a letter sent to the hosts on Monday 30th, Airbnb’s cancellation policy has been further extended amid the novel coronavirus outbreak. Besides, Airbnb has reserved $250 million to help pay hosts for missed or canceled bookings. CNBC and The Verge were first to report the news earlier today.
Guests are now able to receive full refunds for any trips booked on the platform with check-in starting on or before May 31 and before March 14, under the company’s “extenuating circumstances” policy. And Airbnb will now use the funds which are reversed to ensures hosts can recoup some of the lost money. This move is considered as an effort to rebuild Airbnb’s relationship with its partner.
Before the announcement, Airbnb had expanded its “extenuating circumstances” policy to cover bookings between March 14th and April 1st; the company later expanded that coverage again to cover bookings made up to April 14th. Still, it did not have any form of coverage for hosts, some of whom were enraged that Airbnb was overriding their cancellation preferences and not providing any form of financial safety net. That’s because the refunds Airbnb promised guests started coming from the hosts, not the company itself.
Therefore, in the Monday letter, Airbnb CEO Brian Chesky expressed regret over the message round the policy changes this past month. Additionally, the company will pay $250 million to host to cover the loss of covid-19 cancellation. Specifically, Airbnb will pay hosts 25% of what they would normally receive through their cancellation policies. The payments will begin to be issued in April.
“I deeply regret the way we communicated this decision, and I am sorry that we did not consult you — as partners should,” Chesky wrote in the letter. “We have heard from you and we know we have let you down. You deserve better from us.”
Moreover, Airbnb employees have donated $10 million to help the Superhosts and long-tenured Experience hosts. Starting next month, the hosts can apply for $5,000 grants from the fund.
Because Airbnb business depends entirely on travel and tourism, it’s a dramatic turn of events for Airbnb due to the coronavirus pandemic. The company had lined up bankers to lead the offering, which would test whether Airbnb could live up to its $31 billion private market valuation from 2017. The Wall Street Journal reported in February that Airbnb lost $322 million over the first nine months of last year, after reporting a $200 million profit in 2018, as it ramped up spending.
Now the company faces a travel and tourism industry that has shut down across the globe. The U.S. Travel Association expects the industry to lose 4.6 million jobs this year.