Airbnb Changes Cancellation Policy – Seemingly Stops Refunds
The coronavirus (COVID-19) pandemic is having a huge impact on every facet of life, with plans of any kind being cancelled or at least postponed. Little has been impacted more than the travel industry thanks to the literal cancellation of all non-essential travel. Airbnb is no exception to this, though the company has seemingly put in place an addendum of sorts to minimise the risk that coronavirus is having to the income stream of the company.
As posted on Twitter by VanREanalyst, the company now has in place what they call "additional cancellation options". This comes on top of the company's extenuating circumstances policy as well as the additional COVID-19 extenuating circumstances policy put in place. These had already covered anybody who had made a booking on the 14th of March of before, so long as their say was between the 14th and 31st of March. You can read this part of the policy here:
Reservations for stays and Airbnb Experiences made on or before 14 March 2020, with a check-in date between 14 March 2020 and 31 May 2020, may be cancelled before check-in. This means that guests who cancel will receive, at their option, travel credit or a full cash refund, hosts can cancel without charge or impact on their Superhost status, and Airbnb will either refund or issue travel credit in an amount that includes all service fees.
Reservations for stays and Airbnb Experiences made on or before 14 March 2020, with a check-in date after 31 May 2020, are not currently covered for COVID-19-related extenuating circumstances. The host’s cancellation policy will apply as usual.
However, this seems to now be contrary to what the tweet and screenshot by VanREanalyst indicate. The option of receiving your full amount back as a refund looks to have been removed, with Airbnb now having an option that simply gives credit for future travel. In the screenshot posted by VanREanalyst, the option states as follows:
We've expanded our cancellation options. You can always change or cancel your existing reservation under the terms of your host's cancellation policy. As an alternative, we are now offering guests impacted by COVID-19 the option to cancel and get 100% of the amount they've already paid as travel credit to use toward a future trip. To receive this credit, please cancel at least 7 full days before your check-in date to give your host plenty of notice.
Now I should make this clear that the screenshot is just one limited section and does not fully clarify or contextualise the situation. I have asked VanREanalyst if the booking comes under the terms of the extenuating circumstances policy and also, if it does, then if the full-refund option has now been replaced by the option of travel credit.
Regardless, the optics of that one additional cancellation option is not good, particularly when people cancelling may now have very limited income due to the way the pandemic is impacting jobs and more. It is worth noting that hosts are also impacted financially, though Airbnb has set up a $250 million fund where hosts can receive a portion, dependant on lost revenue from bookings cancelled as a result of COVID-19.
Worth noting is that Airbnb has shored up its balance sheet over the previous eight days by raising $2bn from a $1bn funding round and a $1bn loan. This will allow the normally profitable company to weather the current pandemic, with it predicting to return to normal levels by January 2021. Originally the company planned for an IPO this year, though with the current climate that remains to be seen. I'll update you further on the story as more details emerge.