Airbnb initially made a pro-guest decision on refunds, but it now realizes its policy and its outreach to hosts was clumsy and unsatisfactory. Hosts still won't be pleased, but the optics and financials aren't as bad as before.
Faced with a backlash over its unilateral decision to refund guest reservations and leave hosts empty-handed while competitors took a more balanced approach, Airbnb co-founder and CEO Brian Chesky apologized to hosts, and detailed a $260 million Airbnb relief package.
In a letter to hosts sent Monday (embedded below) , Chesky said that the decision — made without consulting hosts — “was not a business decision, but based on protecting public health” so guests would not feel pressured to check in when conditions might not be safe.
“However, while I believe we did the right thing in prioritizing health and safety, I am sorry we communicated this decision to guests without consulting you — like partners should,” Chesky wrote. “We have heard from you and we know we could have been better partners.”
Chesky added that Airbnb hosts want action, not mere words. “Although it may not have felt like it, we are partners. When your business suffers, our business suffers,” he said.
So Airbnb committed to a relief package of its own for hosts, including:
- Airbnb will pay hosts $250 million to partially cover the cost of coronavirus cancellations. For cancelled check-ins that were slated for March 14 to May 31, Airbnb will pay hosts one-fourth of what they would have received through their cancellation policies, and the “payments will begin to be issued in April.” For more information visit here.
- Airbnb set up a $10 million Superhost Relief Fund with rental and experiences hosts eligible to apply for grants up to $5,000. This is to help superhosts with rent and mortgage payments. As with the $250 million host payments, these grants do not have to be paid pack. Airbnb employees donated $1 million to the superhost fund, and Airbnb co-founders Chesky, Joe Gebbia, and Nathan Blecharczyk “are personally contributing the remaining $9 million, Chesky said. For more information visit here.
- Airbnb is establishing a way for guests to contribute money to hosts they have previously stayed with. Chesky said “countless” guests have expressed interest in doing so.
Competitors such as Expedia’s Vrbo urged hosts to give guests refunds of up to 50 percent or credits for future stays, but that left that decision to hosts. Many of these hosts, struggling to pay their mortgages, refused to provide refunds to guests.
Airbnb on the other hand, committed to giving guests full refunds, and this triggered a backlash among Airbnb hosts and spurred chatter about boycotts, lawsuits, and transferring their listing to competitors.
As Chesky wrote in his letter to hosts, many communicated their anger directly to Airbnb — and on social media.
So Airbnb’s actions Monday should be seen in this context. While the 25 percent refunds of their cancellation fees to hosts certainly will help, it is bound not to satisfy many hosts, although some in the United States may be eligible for small business grants and loans from the stimulus package.
Chesky was slated to have a video question-and-answer session with hosts at 6 p.m. Eastern Time Monday.
Update: The Chesky video with hosts wasn’t an interactive question-and-answer session, but he read some pre-planned questions from hosts.
In addition to outlining the relief package for hosts, the Airbnb CEO conceded the company has become further removed from hosts’ concerns over time, and needs to “connect better” with hosts again.
Chesky said he was “sorry” for the way Airbnb implemented its guest refund policy, adding Airbnb wants to “fix this.”
He said Airbnb is partners with hosts or “at least we want to be.”
Photo credit: Airbnb hosts are getting a $250 million relief package to reimburse them for about one-quarter of what they would have received in cancellations fees from guests because of Covid-19. Airbnb