Boasting nice weather and spring training games, March is a popular time for Arizona’s tourism industry. It’s also a booming time for short-term renters who utilize popular booking services like Airbnb.
But when the World Health Organization declared the novel coronavirus, which causes the disease COVID-19, a global pandemic, a cascade of sports games, festivals and other mass gatherings were postponed or canceled outright.
Then, the Airbnb cancellations came.
A flood of cancellations, and no fees
Brandi Berg, who runs a short-term rental company in Phoenix, said the cancellations trickled in initially but later surged as the list of canceled events that drew people to book a room in the first place grew longer.
While Berg would normally recoup some of her losses through cancellation fees, Airbnb revised its cancellation policy, allowing guests to cancel their reservations for a full refund if the trip was booked on or before March 14 and the check-in was between March 14 and April 14.
The company notes toward the end of its announcement that it will continue to review how it applies the new policy.
The updated policy also allowed renters to cancel on guests without consequence, but Berg wanted as much business as she could. She said she was able to make a couple of bookings since the pandemic was announced, but had to cut her rates by more than half to compete with other renters.
“I was able to recapture a couple of bookings for this week for last-minute people that were driving back home, but it was at a significantly reduced rate — $50 a night versus the $110 to $130 that I typically get for this time of year because of spring training,” Berg said.
Berg said she estimates she lost about $3,000 from the current swath of cancellations and believes she could go through April without a single booking. Berg said she doesn’t own her properties but rents them from landlords and property managers who agree to let her sublet them for her business.
If her bookings were to run dry for months, Berg said she plans to sell off the furniture, electronics and other assets within properties that don’t have a long-term lease.
Berg said she also has listings with VRBO, another booking service that didn’t offer full refunds, but said the vast majority of her bookings are through Airbnb.
Frustration with Airbnb
Angie Delgadillo echoed many of Berg’s sentiments, saying she and her husband’s company has suffered the same influx of cancellations. Delgadillo sublets a one-bedroom apartment near Arizona State University’s ASU Gammage theater in Tempe.
“I think in the beginning we were a little bit more optimistic, that we thought, ‘Well, some people will cancel but we’ll get other bookings because that’s usually what happens,” Delgadillo said. “But then when everything canceled and there was really no other … this is our busy season so we all expect it to be — we were completely booked.”
Delgadillo said she’s down to one booked guest this month, whom she’s hoping could stay as long as six months thanks to a potential contract job he has.
Delgadillo said she understood why Airbnb loosened its cancellation policy and why guests felt the need to use it amid fears over novel coronavirus.
However, Delgadillo said Airbnb’s change to its cancellation policy blindsided her and felt the company assisted its guests but not its renters.
“I think a lot of us are really disappointed in Airbnb itself,” Delgadillo said. “Because folks just canceled and we get it, like, we totally understand. I would probably do the same thing. But I would also kind of have this — I don’t know. I’m of the thought process where (if) I am impacting somebody’s business, what could I do to possibly help this person?”
When asked what the company was doing for hosts, Airbnb pointed to an open letter from its founders explaining its decision and that it is developing a “plan of action” for its hosts to be shared within weeks.
“In this crisis, our first priority is the health of the public and our communities,” the statement reads. “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. We believe this is the responsible thing to do given the guidance of governments and health experts.”
Other services not offering full refunds
While Airbnb is seeing frustration from its renters, VRBO has drawn ire from people on social media for not offering full refunds to guests.
According to the booking service’s website, VRBO offers a full refund of its service fee and is recommending hosts offer a refund of at least 50% for all stays booked before March 13 with check-ins scheduled between March 13 and April 30. It’s also asking hosts to offer credit for future dates for guests willing to postpone rather than cancel.
VRBO said it will reward hosts with more future bookings if they follow its recommendations.
“If you are unwilling or unable to accept the credit, we advise working with our partner on an acceptable refund, and we have incentivized our partners to go above and beyond their standard policies,” the company wrote on its website. “The more our partners are able to do for travelers, the more Vrbo will reward them with future bookings.”
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