Christa and David Sprague are among Airbnb hosts who have lost thousands of dollars in cancellations following a policy change this month by Airbnb in response to the coronavirus outbreak.
Courtesy of Christa Sprague
Just last week, Zach Jacobs and his wife had 95% of their Tampa, Florida, Airbnb’s dates booked for the next three months. By Sunday, that number had dwindled down to 5% as the coronavirus outbreak began to spread throughout the U.S.
“We went from a fantastic outlook for the next three months, to absolutely devastating — every single reservation disappeared,” said Jacobs, who estimates he and his wife have lost more than $5,000 in cancellations. “We will have to get very creative on paying the bills and keeping the mortgage paid.”
Airbnb hosts like Jacobs are beginning to feel the impact of the coronavirus pandemic following a change by the company to its cancellation policy that has allowed guests traveling over the next month to receive full refunds on their bookings, overriding existing policies put in place by hosts to protect themselves in such situations.
The policy change was announced by Airbnb on Saturday. It allows guests with reservations between then and April 14 to receive full refunds. That change has already cost Airbnb hosts in California, Florida, Kansas, Utah, Michigan and the state of Washington to lose thousands of dollars in reservations, numerous hosts told CNBC.
Now, as cancellations continue and new bookings dry up, many hosts around the country have empty calendars for the coming weeks and are facing uncertain futures as the due dates for their mortgages, utilities bills, homeowners association fees and property taxes draw near.
Zach Jacobs and his wife are among Airbnb hosts who have lost thousands of dollars in cancellations following a policy change this month by Airbnb in response to the coronavirus outbreak.
Courtesy of Zach Jacobs
Johnny Bash, a quadriplegic who relies on the revenue he generates from his nine properties in California, Florida and Utah, said the cancellations have been a massive blow. Bash calculates he’s lost $36,000 in cancellation refunds over the past week.
Airbnb’s cancellation allowed guests to receive a full refund if they canceled within 48 hours of booking their trip, or a 50% refund if they canceled within seven days. That policy, however, was overridden by Airbnb on Saturday.
“Some people may think we’re a jerk for putting a strict cancellation policy in place, but in essence, it’s our only insurance policy, if you will, against potential issues that could arise,” Bash said. “So when our only remedy is stripped away from us, it puts us in an extremely vulnerable position.”
Besides relying on his properties for revenue, Bash said he also pays two dozen cleaning and maintenance contractors to service his properties. These workers rely on him as their primary source of income, Bash said.
“I don’t even have a way to offer them any sort of payment,” Bash said. “If I had my cancellation policy, I might be able to help them, even a little bit.”
Johnny Bash (center) is among Airbnb hosts who have lost thousands of dollars in cancellations following a policy change this month by Airbnb in response to the coronavirus outbreak.
Courtesy of Johnny Bash
Several hosts say they are sympathetic to impacted guests who seek refunds. However, many hosts said they feel that Airbnb has completely put the brunt of the situation on them.
“We definitely empathize with guests and know this is out of anyone’s control,” said Christa Sprague, who rents four apartments in Detroit with her husband. “But for us, our business and our livelihood just got canceled.”
Airbnb has taken steps to help its hosts. The company on Tuesday sent a letter to House leaders in Washington, urging them to pass legislation that could help the company’s network of hosts, either through tax relief or loans.
“We are asking federal policymakers to first and foremost consider our hosts: hardworking women and men across the country who share their assets and depend on this income to pay the bills,” wrote Chris Lehane, Airbnb’s senior vice president of policy and communications.
Airbnb on Tuesday sent a note to hosts explaining the reasoning behind its decision. It said Airbnb “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.”
“We are going to get through this crisis as partners — our success is dependent on the success of you, our hosts,” the note said. “We are working day and night on a plan of action that will help you get through this extremely difficult time.”
Airbnb CEO Brian Chesky at The New York Times Dealbook event on November 6, 2019.
Credit: Mike Cohen/ The New York Times
Several hosts who spoke with CNBC said they doubt they’ll receive any money from a relief plan, fearing money will instead go to established travel and leisure companies.
Kate Shaw, a host of multiple properties across Southern California, said that Airbnb’s reliance on the government to help its hosts is passing off the moral and fiscal responsibility that the company should have.
“They should have been prepared with an insurance or fund,” said Shaw, who has relied on renting her properties as her sole source of income since late 2018. “Without hosts they have no business, and they should have morally and fiscally been prepared to keep their supply chain (i.e. hosts) in operation in case of emergency.”
Shaw also rents her properties on Airbnb competitor Vrbo. She highlighted Vrbo’s refund policy, which only “expects” hosts to offer at least a 50% refund to travelers who cancel during this time or a full refund in credits, according to a copy of a note sent by Vrbo to hosts on Thursday.
“The new policy we are implementing is not perfect, but in this unprecedented time we believe it strikes the best balance of protecting travelers, partners, and the public,” said Vrbo President Jeff Hurst in the note.
Airbnb has built goodwill with hosts since its launch in 2008, but if the company doesn’t do something to help out its hosts, it risks alienating many of them, said Henry Harteveldt, travel industry analyst at Atmosphere Research Group.
“If that happens in enough cities and enough places, obviously Airbnb starts to lose properties, they start to lose availability and their overall utility declines,” Harteveldt said. “It could create a downward spiral.”
Already, some of the hosts who have been impacted say they’re fed up with Airbnb. Alan Tillman owns nine properties he lists in Kansas, and he said he’s likely to start listing those properties on websites like Vrbo, HomeAway and Booking.com.
“I’d rather just not never deal with Airbnb again,” Tillman said.