Increasing host penalties for unjustified cancellations isn't necessarily a bad thing unless innocent hosts get caught up in the dragnet.
Few things can be as frustrating for Airbnb guests than to see their reservations cancelled by the host, especially on short notice.
Airbnb is hiking the maximum fee 10-fold to $1,000, from the current $100, on August 22 for certain host-generated cancellations.
“Avoidable host cancellations are not common, but when they do happen, they can have a negative impact on a guest’s experience, as well as the wider hosting community,” an Airbnb spokesperson said. “Following a thorough review of our policy, we have updated our existing fees to better reflect the costs associated with preventable cancellations, including rebooking guests, often at the last minute.”
Airbnb explains the new fee structure to hosts here.
The actual fee that hosts would get charged would range from $50 to $1,000, depending on the amount of the reservation.
Hosts would still be able to cancel bookings without penalties or other repercussions, such as getting their listing or account suspended, for things such as the need to make emergency repairs, if they can prove the guest plans to have a house party or break other property rules, or if the home or apartment can’t accommodate families or guests, for instance.
Hosts who cancel guests stays likewise wouldn’t be subject to penalties if a government’s visitation policies change to bar travel or when there is an epidemic prohibiting stays.
However, if a host cancels a booking on a whim, for discriminatory reasons, or because they accepted two bookings for the same property on the same dates, for example, then they will be tagged with the fees.
“I feel cancelations by hosts is one of the factors hurting Airbnb’s public image,” said Jim Haines, an Airbnb host in Oxford, Mississippi. “It must be pretty significant for Airbnb to change the policy to send a clear message to hosts. When I read replies to Airbnb’s posts in social media, host cancelations is always mentioned in the attacks.”
Some hosts on a Facebook group that Haines moderates weren’t enthusiastic about the changes. Several hosts said they would never cancel a guest’s stay, but one added: “It doesn’t look good for hosts. Double bookings happen. But not just that. It’s also amenities. If you lack an amenity and the person cancels, you get penalized.”
Brian Egan, co-founder and CEO of property manager Evolve, said he supports Airbnb’s policy change.
“Avoidable cancellations erode trust and damage the short-term rental category broadly, so we view aligning the economics of penalties with the true costs of such cancellations as a common sense measure,” Egan said. “That said, we want to emphasize the term ‘avoidable.’ Hosts and owners are everyday people and their properties occasionally have everyday issues like any other. The process needs to be transparent and easy — when faced with a challenging circumstance such as a burst pipe or a fallen tree, the last thing an owner needs is to spend hours defending themselves against an onerous fine.”
There is a procedure in place at Airbnb to dispute the fees, but many hosts complain that it is a lengthy process, and it is sometimes tough to get detailed explanations from the company.
At the same time, plenty of guests cancel reservations for invalid reasons, and Airbnb has been accused of cancelling stays, sometimes without elaborating on its reasoning.
CBC News reported Thursday that Airbnb cancelled hundreds of bookings recently in Toronto, Canada, leaving both guests and hosts perplexed about the reasons, and struggling to deal with the problem.
“The city says it recently received nearly 100 inquiries from hosts like Wall who had their bookings cancelled,” the story said. “CBC Toronto spoke with a handful of them who shared a similar story: All their bookings were abruptly cancelled, the city confirmed their registrations were valid, Airbnb hasn’t been helpful in addressing the problem and hosts have been scrambling to sort it out while trying to appease would-be guests.”
The story said the likely cause of the issue was a difference between how host information was described in Airbnb profiles versus their City of Toronto registrations.
In a statement, Airbnb commented on the Toronto situation: “Under the City of Toronto’s short-term rental laws, the City is responsible for identifying listings ineligible to operate, and the City recently exercised this authority, affecting some Hosts across the community. While enforcement is entirely controlled by city officials, we are working very hard with Hosts, guests, and the City of Toronto to find a common sense solution – especially as Toronto works to revitalize its tourism and hospitality sector.”
Note: This story has been updated to include Airbnb’s statement about Toronto cancellations.
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Photo credit: A home with Airbnb units in Rincon, Puerto Rico. Dennis Schaal