Booking a short-term rental on services like Airbnb used to be a quick, easy and sometimes cheaper way to find accommodations. But since coronavirus reared its head, it’s caused big headaches for travelers and hosts alike.
Nick Lough planned a family trip to Europe in June. He has Airbnb reservations in three countries — three in Italy, one in Germany near where he grew up and two in Switzerland.
“Currently we’re holding out hope that our trip to the Amalfi Coast (in Italy) can still happen, but we lose confidence every day,” Lough, a 35-year-old attorney from Huntsville, Alabama, told USA TODAY.
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The coronavirus pandemic has left all sides of the home-rental business in the lurch as international and domestic reservations made through Airbnb, Vrbo, HomeAway, Booking.com, TurnKey and other vacation rental platforms are suddenly clouded by uncertainty.
Although there is no national lockdown, as President Trump reiterated Wednesday, the state-by-state gap in travel policies is shrinking, which could help reduce March’s wave of cancellation disputes between travelers seeking refunds and hosts denying such requests.
As U.S. coronavirus cases and deaths have increased – more than 226,000 cases and 5,300 deaths as of Thursday afternoon – more states are clamping down on nonessential activity, including travel with more than 30 states issuing stay-at-home orders affecting the movement of more than 250 million Americans, or 75% of the country, and closing a geographic gap in coronavirus response that has been a sore point in cancellation discussions between travelers from hard-hit communities and those hosts with properties in places that had been less affected.
“The environment has changed substantially” for U.S. travel since mid-March, when beaches in Florida were open for spring break while other states were starting to shut down travel, travel industry analyst Henry Harteveldt says.
What can hosts and travelers do about past, present and future reservations? That depends on the flexibility of company cancellation policies, host and traveler finances and when the pandemic starts leveling off.
What are vacation rental companies doing to help travelers and hosts?
In March, both Vrbo and Airbnb were inundated with complaints regarding their cancellation policies.
The short-term retail services faced hits from opposite directions. People making reservations have criticized Vrbo for a refund policy they consider too weak, while hosts complain that Airbnb’s full-refund policy comes entirely out of the pockets of rental owners.
In response, Airbnb CEO Brian Chesky Monday apologized to travel hosts upset by the company’s cancellation refund policy and promised $250 million to offset refunds to help with the financial burden.
“I’m sorry we didn’t consult with you as partners. We want to fix this,” Chesky said in a 15-minute video message geared toward hosts that included more than 6,000 participants. “I know this is an incredibly painful time (and) many of you are struggling.”
William Fuller, owner of Summit County Mountain Retreats, a midsize property management company in Colorado, said Airbnb’s earlier “extenuating circumstances” refund update not only affected property owners but their staffs, too.
“Will I personally be OK? Probably yes. Will my staff of 100 people who are mostly working-class folks be OK? Maybe, but if they are, it will be because of decisions and sacrifices by me and my family made in spite of the Airbnb theft,” he said.
Airbnb’s policy only covers refunds on trips made on or before March 14, unless a guest or host has COVID-19.
HomeAway and Vrbo, both owned by Expedia, are asking property owners and managers to offer customers a full credit if they are outside the property’s cancellation window. The policy applies through April. The companies, which are waiving all service fees, are also encouraging, but not requiring, at least a 50% refund for customers requesting one.
Ashley Gordon of New York, who was part of a group that made a four-day April reservation in Scottsdale, Arizona, for her bachelorette party, says the rental service’s refund policy lacks teeth. After initially being denied any refund of the $5,700 due, the property owner finally agreed to cancel the Gordon group’s final payment, leaving them with a $3,100 loss.
“Vrbo is deflecting responsibility, making their customers chase the money and not requiring a 50% mandated refund. I don’t expect the homeowner to lose everything, but Vrbo has made it clear they are standing behind their properties and not their customers,” she said.
When people feel pressure to travel because of refund rejections, that threatens public health. “In many cases, the owners have been aggressive or dismissive of COVID-19.”
In response to complaints that some property owners were dismissing the coronavirus threat to discourage cancellations, Vrbo told unit owners in mid-March not to downplay the crisis and threatened to ban those who didn’t comply.
What about reservations for summer and beyond?
Travelers across the world are grappling with cancellations from airlines, hotels and cruise ships, at least for the next few months. But what happens come summer and fall?
“It looks dire in Italy right now. What’s it gonna be in June? I think that’s anybody’s guess,” Lough, who is debating how to handle his family’s June Europe trip, said. “We just want to make the right decision, and I don’t think we have all the facts at this point to make the right decision.”
Lough isn’t the only traveler holding out hope for a summer trip. Rich Makaras, a 45-year-old eCommerce sales director from Cincinnati has two Airbnbs scheduled for late June in Denver. It’s a group of four fathers and their daughters who are celebrating their high school graduation.
“We are holding out hope that they can continue to look forward to this as much of their senior year has been disrupted,” Makaras said. He reached out to the host and management company and was able to get the cancellation window adjusted so they could decide by late May instead of late April.
For now, some communities, including Portland, Maine; Carolina Beach, North Carolina; and New Jersey shore towns, are temporarily banning short-term rentals to fight coronavirus transmission, a policy move that presumably could provide clear-cut guidance for traveler-host cancellation discussions going forward. But those policies also are part of a patchwork.
Should travelers be making new reservations?
According to data from property management software company Guesty, new reservations in mid-March declined across the world. Between March 10 and 20, there’s been a 30% decrease in new short-term rental reservations compared to the same timeline in February. In Europe, that number jumps to 80% to 90%.
Omer Rabin, Guesty’s managing director of the Americas, says the data changes every day. After a wave of cancellations for March, April and May, many travelers are pushing their vacations into the fall, with reservations looking stronger than last year. Rabin posits that people are assuming fall will be a better time to travel and they can leverage flexible cancellation terms and preferred pricing.
Rabin says the biggest observed change globally is the length of stay. Historically, the average length of stay is consistent around 3.6 to 4.2 days. That average has shot up to an unprecedented 8 days in the last two weeks.
People are fleeing cities for rural spot: The Catskills in upstate New York had an occupancy rate of about 30% this time last year. This year it’s more than 60% and may actually be higher given that people are de-listing vacation homes and taking their families there instead; it may even be at full capacity.
“All those places are busier now than they have been a year ago at the same time, which is shocking,” Rabin told USA TODAY.
Travelers should talk to hosts and see what flexible perks might be available. “Travelers will be pleasantly surprised to see how much hosts are willing to actually extend those flexible terms given the situation,” Rabin says.
Hosts may need to drop their average nightly price to attract customers, but they could market longer stays to ensure a constant stream of revenue. At least that’s what Rabin says they’ve seen hosts doing around the world.
Rabin recommends hosts initiate conversations with travelers to make sure they’re still coming and to find ways to make them comfortable staying there. They should also plan for the fall.
Traveler-owner disputes may reach an equilibrium as the scope of the pandemic becomes clearer and governmental travel policies align. But both sides will fight to protect their interests in increasingly precarious economic times, Harteveldt says.
For those with reservations or planning to make them, he advises reading the fine print and realizing the challenges facing travel businesses: “The best thing to do is think of travel companies as a starving dog and money as the first piece of food they’ve seen for a while. The travel companies are going to do everything they can to hold on to your money and make it as difficult as possible for travelers to get a refund.”
This article originally appeared on USA TODAY: What travelers, owners of Airbnb, Vrbo rentals should know about cancellations amid the coronavirus pandemic
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