Reaction to Brian Chesky announcements: what may the future hold for Airbnb?
US: In response to the ire of hosts and guests alike since it first started implementing its Covid-19 support measures, Airbnb CEO Brian Chesky recorded an impromptu video call last week, which generated a mixed response from the global short-term rental community.
In the call, Chesky apologised to its host community and suppliers for abruptly cancelling bookings in March with little or no notice provided to consult with either set of partners and promised to “fix” the situation.
The first step to soothe tensions was announcing that Airbnb was extended its extenuating circumstances policy to offer full refunds to guests for any trips taking place on or before 31 May, as long as they were booked prior to 14 March. While Chesky said this was a matter of public health to protect both its hosts and guest communities, it is true to say that the policy has been at the heart of much of the resentment on the hosts’ behalf as this has been used to outweigh existing cancellation policies.
Chesky also mentioned that the last few weeks had been a “wake up call” and that the company had not planned for such a globally-reaching phenomenon like the coronavirus.
The CEO also made four key announcements in his call:
- Airbnb is to pay out $250 million in cancellations back to hosts
- Hosts will receive 25 per cent of what they would normally get back from their existing cancellation policies
- It applies to bookings made prior to 14 March
- The company is laying on a $10 million Super Host relief fund
- Airbnb is providing grants totalling up to $5,000 that do not need to be paid back
- Airbnb’s employees and co-CEOs have contributed to the relief fund
- From this month, previous guests can send hosts a note and attach a personal financial contribution as a token of appreciation for their hospitality during a stay
- Airbnb is lobbying for hosts in the United States to be able to benefit from small business loans and grants, with Chesky adding that Airbnb is “building a number of new programs to drive demand” and implement this around the world
Since the announcements were made, professionals from across the short-term rental industry have given their reactions to ShortTermRentalz:
Richard Vaughton, a rental advisor at VR Consulting Ltd and co-founder of Rentivo, said: “This industry is littered with examples of how not to manage difficult times and transitions.
“I’m afraid the announcement last week demonstrated the under appreciation of the thousands of small businesses which work feverishly day in day out and has allowed Airbnb to thrive as a platform. Through their handling of this crisis Airbnb have lost a lot of supply chain love and the pending economic crisis will see a significant drop in their urban inventory.
“Almost certainly the competition, who over the last few years have re-modeled their supply approach will also see this as an opportunity. In addition, guests are witnessing more negative press and along with hosts, seeing even more confusing cancellation terms which can only create more damage.
“There will be tough times ahead,” warned Vaughton.
Eleanor Nesic, head of revenue and performance at Sloane Collection, defended Airbnb’s stance over the extenuating circumstances policy, saying that “it has not actually done anything that is outside of its policy”:
“Airbnb has for years had an extenuating circumstances policy that hosts agree to when they sign up that does cover this. We are not happy that they have done what they have en masse, but they have.
“However they have also brought in help for hosts. Yes it may seem like little – just 25 per cent of cancellation fees we would have normally received – but it is more than they were obliged to do. Yes, it is not very much, but it is something. It is more than other OTAs have done [at least for now].
“Airbnb also states that bookings that are made after 14 March are not subject to their extenuating circumstances policy unless the host / guest has the virus. So basically any guest booking now takes all the risk on themselves.
“Logic holds that the world’s biggest home-sharing company’s listings in more than 220 countries and regions will meet pent-up travel demand.
“Airbnb CEO Brian Chesky also quickly positioned his company during the Covid-19 crises as a pro-consumer brand by offering guest refunds on a global basis. An inevitable backlash from hosts forced to pick up the slack ensued, leading Chesky to earmark $250 million for their troubles and publicly address their concerns in this letter.
“There is an inherent optimism to the hospitality industry in general, and Airbnb has managed to both capture and hang on to it,” added Parker.