Today, we’re going to be taking a look at what each of the major short-term rental booking platforms is doing to help hosts get through this particular time period with coronavirus, as well as what relief options are available to us as short-term rental owners.
Let’s go ahead and get started.
VRBO Coronavirus Policy
First, we’re going to talk about what VRBO has going on. From the beginning. VRBO stayed pretty tight-lipped and didn’t make any major changes to its extenuating circumstances policy. However, about two weeks into the coronavirus pandemic, they realized they were going to have to do something.
They’ve taken a two-prong (or two-option) approach to their cancellation policies, which I think is pretty fair. The first and the default option is a credit— not a cancellation—approach. So rather than refund the guests any actual dollars, what they’re doing is encouraging them to move their vacation date to a different time in the future.
This keeps the money in the host pocket, although it’s really kicking the can down the line a little bit. It seems to be the most host-centric policy of any of them that we’re going to talk about today.
The second prong of the approach is, if it gets really just does want to refund, they’re offering a 50 percent refund. So, the host will keep 50 percent and the guests will get 50 percent back. I think this is a pretty fair option.
Yes, it does suck that the guests have to cancel their vacation and that they’re not getting 100 percent refund. But we as hosts do have bills to pay. We all know that we’re not big corporations that can afford to refund 100 percent of everything. We have mortgages, we have expenses, we’ve got a small business to float.
I think this is the fairest option of any of the platforms at the moment, although a lot of the guests don’t feel that way. But to me, VRBO kind of has it right in this case.
Vacasa and Turnkey Coronavirus Policies
As far as the two major property managers in the space, Vacasa and Turnkey, they’re both taking also a credit, not a cancellation, approach.
They’re not even offering refunds. They are just making all of their guests move their vacation to a future date, and guests are receiving 100 percent credit.
Most of the other major booking platforms are following suit with the credit policy.
Airbnb Coronavirus Policies
Which brings us to Airbnb—they are not. Airbnb updated their extenuating circumstances policy to give the guest a 100 percent refund on any bookings between March 14th and April 14th. Initially, by doing that, they took the liberty of overriding all of the hosts existing extenuating circumstances and refund policies.
It was a very, very anti-host move. It was exposed in a video by Sean over at Airbnb Automated—a particularly virulent video as a matter of fact—that not only were they overriding our policies, they were also refunding 100 percent of the money to the guests that would have gone to the host. Plus, they were keeping their 11 percent booking fee, as well as the taxes.
So, Airbnb was keeping roughly 25 percent of the booking total. Now, they were keeping it as a credit, not as just cash in their pocket, technically. But it still did not go over well.
Very soon after that video went live, Airbnb sent all of us hosts an email saying, “Hey guys, nevermind. We are not keeping our booking fee. We are refunding a true 100 percent to the guests. We’re all in this together—not just you guys. You’re not shouldering the whole brunt of this pandemic. We’re going to help you out some, and we’re not going to keep any money either.”
More recently, Airbnb extended the current extenuating circumstances policy until May 31st. But what they also did was they changed the refund policy to where the hosts will receive 25 percent of the money that they would have received under their normal refund policy.
Mine is a 50 percent refund. So I’m receiving 25 percent of my 50 percent, and it’s also retroactive. So, any of the cancellations that have already passed the date will also get that 25 percent of what we would have gotten when using our refund policy.
That is a little bit of a help—not a ton. Some might say it’s too little, too late at this point—especially since they announced it at the exact same time that they announced they’re extending the policy by another month and a half.
At the same time, though, Airbnb is doing some great things. For instance, per their website, they’re “partnering with hosts to connect 100,000 healthcare staff and first responders with places to stay that allow them to be close to their patients—and safely distanced from their own families.”
In addition, Airbnb has been the most vocal lobbyist for Airbnb hosts with relief in regard to policymakers. They have been working with policymakers and actually have gotten a few things passed to where we’re now eligible for the small business grants that many other small businesses have available to them. It will cover our utilities, some of them will cover mortgages. So, that’s definitely something to look into.
Go on the Small Business Administration website and check that out, because that has been made available to us.
Definitely look into this if you don’t have enough cash reserves to float this. And maybe you do, but you still want to do it anyway.
Fannie Mae and Freddie Mac Mortgage Forbearance
Another thing that a lot of people have been talking about mortgage-wise is a mortgage forbearance that most of the Fannie– and Freddie-backed loan servicers are offering. Definitely give your loan servicer a call to see exactly what options are available to you.
One mistake I don’t want you to make, though, is that a lot of people are assuming that these deferment policies, they’re confusing them with loan forgiveness. They’re not forgiving you for a few months of the loan. It doesn’t just disappear.
Most of them have you making the payment in full at the forbearance. Some of them are tacking it onto the end of the loan. It just depends on the servicer. But definitely call and check that out.
Lastly, I’m happy to help in any way that I can. Sometimes it’s nice to just have somebody who’s in the same position as you. Reach out to me on BiggerPockets with any questions or problems you’re having during this uncertain time.
Questions? Comments? Corrections?
Let’s discuss below!