How are you handling Coronavirus cancellations?

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How are you handling Coronavirus cancellations?

Real Estate Investor · Summerfield, NC · Member since 2016 · 56 posts · 55 votes

We have a Strict cancellation policy but guests are asking for full refunds due to events that are cancelled in the area. We are not in a region of the US that Airbnb recognizes in the extenuating circumstance guidelines. I'm inclined to adhere to our cancellation policy but I'm having trouble putting into words the rational. Thoughts?? Am I being unreasonable?

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John UnderwoodPro Member

Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes

I just had my first cancellation due to virus concerns. It was beyond the full price refund time.

I gave them a full refund. I think it was the right thing to do.

I don't live hand to mouth and I can afford to do this.

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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
6y
One of our managers said a TENANT was trying to get out of their lease due to CV. Don’t even want to know his argument.
CV has already f’d up a bunch of stuff for me. But I chalk it up to the nature of the business. That said I’m not going to allow people to pile on and make it worse.
1 Reply
Dan Schwartz
Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
6y
It’s clear which of the commenters are in, or at least understand the hospitality business, and which ones don’t.
I’m not surprised by the preponderance of responses here. They aren’t your clients; they are Airbnb’s clients. That’s why Airbnb is refunding affected travelers, same as nearly everyone else in the tourism/hospitality business is.

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Frank S.
Investor · Simpsonville, SC · Member since 2015 · 19 posts · 32 votes
6y
Simple answer – refuse and lose – refuse to refund (give credit) and you risk losing customers and getting bad reviews. Hotels are cancelling/refunding without penalty. I just canceled my hotel for a conference at the last minute with no issue or hassle. Welcome to RE investing…it ain’t all roses…hope you kept good reserves...this may get ugly (hope I’m wrong).
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Syed H.
Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
6y
This isn't just a random excuse for people. This is pretty serious. It's better for society to limit travel. Look at the markets. Smart people are worried that our economy is coming to a standstill. Travel is risky right now, especially for the older population.

Also, airbnb competes with the traditional hotel industry. Guess what, the traditional hotel industry is giving FULL refunds or letting you reschedule. ALL airlines are giving refunds or reschedules. I wouldn't be surprised if people dispute these with their credit card as well.

Welcome to the joys of the business world. The risk is on YOU. No one else.
4 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
Originally posted by @Collin Hays:
A few years ago, I was flying my daughter to Dallas to see a Justin Bieber concert. Non refundable plane tickets and an advance pay hotel that was non-refundable. Five days before the concert, Justin Bieber sent out a presser stating that he was cancelling the remainder of his tour. I didn't call American Airlines and ask them for a refund. That's not their problem. It's called "the cost of doing business."

Usually when a hotel is advance pay, you are getting a discount in return for non-refundable. I travel extensively and if you pay the standard rate, they are pretty much all 100% refund within 24 hours. Most airlines are now offering full credit voucher or refund. It is "the cost of doing business" during a crisis. It sucks, but business is risky. Investing in tourist destinations is risky. Whether it is recession or natural disasters, there is always a threat looming out there. Countless landlords have gone bankrupt because they failed to see the risks and plan for them. We could be facing a 4-8 week or greater travel ban in this country. With a travel ban, there is no way you can force people to pay. Some of these STR owners will choose to stop paying their mortgage or sell the property. It will be hard to convert to LTR, because vacation areas will be hit with massive unemployment.
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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
6y
Originally posted by @Dan Schwartz:
It’s clear which of the commenters are in, or at least understand the hospitality business, and which ones don’t.
I’m not surprised by the preponderance of responses here. They aren’t your clients; they are Airbnb’s clients.

I think Airbnb hosts are waking up to this reality. Guests are my homeowners’ customers. As a PM, I have a fiduciary obligation to manage my client’s (homeowner’s) asset. That is my first priority. Protecting the asset and it’s income are paramount to me.

The day that I begin allowing the guests to dictate how we manage the assets is the day I call all of my homeowners and advise them that they need to fire me and strike out on their own.

[email protected]806-672-7102
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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
6y
Originally posted by @Frank S.:
Simple answer – refuse and lose – refuse to refund (give credit) and you risk losing customers and getting bad reviews. Hotels are cancelling/refunding without penalty. I just canceled my hotel for a conference at the last minute with no issue or hassle. Welcome to RE investing…it ain’t all roses…hope you kept good reserves...this may get ugly (hope I’m wrong).

How do you get a bad review from a guest who was never a guest? Does Airbnb allow anyone to post a review, guest or not?
[email protected]806-672-7102
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
Originally posted by @Collin Hays:
Originally posted by @Frank S.:
Simple answer – refuse and lose – refuse to refund (give credit) and you risk losing customers and getting bad reviews. Hotels are cancelling/refunding without penalty. I just canceled my hotel for a conference at the last minute with no issue or hassle. Welcome to RE investing…it ain’t all roses…hope you kept good reserves...this may get ugly (hope I’m wrong).

How do you get a bad review from a guest who was never a guest? Does Airbnb allow anyone to post a review, guest or not?

My understanding is yes they can review if their reservation was cancelled. See this discussion on why:

https://community.withairbnb.com/t5/Hosting/AirBnB-to-allow-guests-who-do-stay-to-review/m-p/474633#M107848

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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
6y
That isn't what this policy says at all. This policy says that the guest can leave a bad review, even if they cancel upon check-in, if they find the property unsuitable, or find it unsuitable during their stay. It doesn't state that a guest can leave a bad review "because my plans changed due to the Coronavirus and the owner wouldn't issue me a refund."

"Airbnb guests will be able to leave feedback on the suitability of the host or the accommodation, or why they chose to cut short their stay. They will be able to do so regardless of whether they cancelled on the day of check-in or during their visit, said the CMA."

[email protected]806-672-7102
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Rick Oaks
Investor · Ridgeley, WV · Member since 2015 · 65 posts · 10 votes
6y
@Collin H. AMEN !!!! Well said !
0 Reply
Daniel SmythPro Member
Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
6y
@Andrea Cole
My daughter, married in January, was on her way to her fully pre-paid European Honeymoon yesterday. Then the Travel restrictions began.
This is one of those times when we must decide what to do. The STR I purchased before the wedding was fully paid for before the wedding. Had something happened, the money would have been lost, per the agreement I signed.
I bet there was no trip insurance purchased when my daughter made her plans and paid for them. Now, the ball is in the hands of the places and events reserved.
I am a contract guy. However, the person on the better end of a contract has the option of enforcement. This is where we find compassion over Profit at all costs.
I don't know the specifics, but my daughter is just one of so very many that will find out the nature of some people.
Had I a rental that could not be used because of such issues, I would eat the minimal costs associated with the planning of the event.
While not giving a refund perhaps, it would be my pleasure to give full credit to those that have paid full or partial.
I bought some stock today, and am waiting for prices to drop again so I can buy more!
It's time for Ribeye on the grill!
[email protected]
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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
6y
From a Property Manager's standpoint, I am not at liberty to be charitable with my clients' funds. It isn't my money; I am simply a manager of their home. Now if a homeowner contacts me and says "give refunds for CV no questions asked", I will follow their instructions. I'm not the boss, the homeowner is.
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Daniel SmythPro Member
Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
6y
@Collin H.
Yes, a contract is a contract. Tell that to the savings and loan scandal recipients as well as the entire banking industry that sold bad mortgages in 2004 and on.
The strongest of us will do what the weak will not. No refunds, but compensation, is an investment I would make!
Not that we cant do it, but finding a way we can do the better things.
[email protected]
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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
6y
Originally posted by @Daniel Smyth:
@Collin H.
Yes, a contract is a contract. Tell that to the savings and loan scandal recipients as well as the entire banking industry that sold bad mortgages in 2004 and on.
The strongest of us will do what the weak will not. No refunds, but compensation, is an investment I would make!
Not that we cant do it, but finding a way we can do the better things.

If it's your money to be charitable with, that's fine. If it's someone else's, it's not.
[email protected]806-672-7102
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Joshua Jimenez
Santa Rosa Beach, FL · Member since 2018 · 5 posts · 4 votes
6y
@Collin H.
Somethings are bigger than making an extra buck for us. The stock market is betting on rise and falls, taking a vacation is not and taking people’s money when things are uncertain is pretty greedy. What are your properties so I can stay away in the future.
4 Reply
Daniel SmythPro Member
Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
6y
@Collin H.
I am just learning about the contracts done property managers have. Some have the ability to do about all they desire.
They make/change rates as needed, modify/remodel the property as they desire.
Sounds goofy to me, but some just want that check every month, when ever the property manager gets around to depositing it.
Often, even the lowest paid worker in the company can change operations. Oh, I cant give your money back for that burger you didn't eat because you were called to put out a fire before your food was ready, but I sure can, and have, made it right when that firefighter came in to dine again. He didn't ask. He didn't need to.
Rich Dad Poor Dad.
Not that it cannot be done, so forget about it.
See what could be done, and work to make it happen.
Sorry, but there is always an option.
If you have no choice, then you did your due diligence when you made those who have the choice, aware of an issue.
My wife had a stroke in 2008. She was a puddle of jello. Doing better today, I often kindly remind her that the only one who says she cant do something, is she! The better thing to say she needs help.
You learn a lot when life does it's best to win.
You will win too!
[email protected]
1 Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
6y
Originally posted by @Joshua Jimenez:
@Collin H.
Somethings are bigger than making an extra buck for us. The stock market is betting on rise and falls, taking a vacation is not and taking people’s money when things are uncertain is pretty greedy. What are your properties so I can stay away in the future.

So my clients who are living off of the income from their properties, I am supposed to sock it to them out of charity for the guest? Why does the guest deserve charity more than the homeowner?

I have a homeowner currently paying $20K to resolve a septic issue. Should I ask all previous guests to chip in some $$ to help him out ?

Help me out here.
[email protected]806-672-7102
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Ken Latchers
Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
6y
Yes. Guest book and take up the property and will they decide to bail out the owner loses money. I don't live in a convention area. I am not in a high-risk area. It is just a tourist area. When people change their mind about coming, I feel under no compulsion to refund them.

Originally posted by @Joshua Jimenez:

taking people’s money when things are uncertain is pretty greedy.

0 Reply
Peter D'Auteuil
Real Estate Agent · Los Angeles, CA · Member since 2016 · 27 posts · 18 votes
6y
This might cripple my business in San Francisco, I do long term co-living rentals. Just not getting any new bookings and I'm sure the virus is driving that
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Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
6y
@Andrea Cole I'm on the consumer side in this scenario: we were planning a quick trip next week for my wife's birthday, with my parents and her mother (who are high risk due to their age) flying in to meet us. We booked a property with VRBO months ago and asked them about cancelling last week when it first became apparent that the Covid-19 virus was spreading rapidly around the country. VRBO referred us to the property owner (a premier host that owns and manages hundreds of STR's in many locations around the country), who informed us that we could cancel but they would keep 100% of our money as per their cancellation policy, so we would lose several thousand dollars. I was surprised by that considering they advertise themselves as "exceptional service, high quality fine hotel experience" on VRBO and on their website. Considering how all the actual high quality fine hotels are refunding people's money no questions asked, I guess I expected any company claiming to hold themselves to the same standards to follow the best practices of the industry. Everyone is being advised not to travel at all right now for public safety sake, so it's not really a consumer's decision not to travel. But nope, they won't budge. Calling VRBO back to express my concerns resulted in this response "We are advising property owners to refund guests money considering the circumstances but ultimately it is up to them if they want to do that or adhere strictly to their existing cancellation policies". So we are in a position where we don't want to cancel and lose all our money, but traveling unnecessarily risks putting the health of ourselves and others in jeopardy by potentially spreading the virus, according to the guidance of public officials. Our parents have cancelled their flights already and received full refunds from the airline. I don't know what we'll do. The destination is only a few hours drive away, and we are not sick so we may still go even though the news media and public officials are saying that would be the irresponsible decision because even those of us not showing symptoms can still spread the virus. It would certainly make things a lot easier if the host would work with us somehow, either by refunding at least some of the money or by allowing us to rebook for a different time. My opinion of the property owner/manager is that they have not been professional and certainly not "exceptional" with their service whatsoever. Their representative was gruff and unapologetic on the phone which certainly doesn't fit their own description of themselves as providing "a high quality fine hotel experience". I think @Carolyn Fullers approach of being willing to refund 50% of her guests money is perfect, as it seems irresponsible for hosts to put people in a situation where they suffer a financial loss for not traveling when the public is being asked not to travel by health officials. If our host had offered to refund at least some of our money that would leave a much better impression. I've been a big fan of STR platforms in the past as a consumer but in this case I wish we had booked with a traditional hotel or resort seeing as those places are taking a more customer service-oriented approach. This situation has exposed a disparity in the level of professionalism and consumer protection between hotels and the STR platforms. It's nobody's fault that there's a deadly virus going around that is causing everyone to cancel their travel plans. Nobody forced me to book this trip and not buy travel insurance, yet at the same time I didn't force the host or the platform to invest themselves heavily in the travel industry without preparing for an event like this that effects travel either, or to not have adequate reserves in order to be able to provide good customer service and do the right thing in a situation where public health is an issue. Since all parties involved share some of the blame, I believe the best path forward would be for the hosts, the platforms and the consumers to all share some of the losses. The most fair solution in my opinion would be for hosts to refund part of the money, at least their profit margin and cover only their actual expenses, or allow guests to reschedule, and for platforms to step up and offer to help both their hosts and guests somehow. If neither the hosts or the platforms step up, I could see this event causing many consumers to reconsider using STRs over hotels/resorts in the future. It seems like a good chance for hosts whose reputation is important to them to distinguish themselves by refunding people's money, or at least part of it, or allowing them to reschedule. I definitely think there will be a shift in the property rankings as any hosts that are unwilling to work with people in this case are bound to get some negative reviews, or possibly even have to deal with guests disputing the charges with their credit card companies. Sometimes it's wiser to look at the big picture and take a short term loss in order to preserve your reputation long term. Allowing guests to cancel without losing all their money just seems like the right thing to do, given the current circumstances with a deadly virus spreading rapidly around the country and seeing as pretty much all public events, conferences, sports, parades, colleges, schools etc. are being cancelled and everyone is being advised not to travel. Hotels, resorts and airlines are taking that approach, so not working with guests to cancel at all right now and receive at least some of their money back... it's looking like that will be perceived as a substandard business practice.
6 Reply
Andrea Cole
OP
Real Estate Investor · Summerfield, NC · Member since 2016 · 56 posts · 55 votes
6y
Looks like I opened a can of worms here...

Just as an update, considering the WHO's elevation of CV to pandemic status and recommendations to limit travel, we've decided to offer credits towards future travel and refunds in other cases.

What people need to understand is that Airbnb is not a Hilton. You choose Airbnb to get a personal, non-commercialized experience. As such, a host's options are more limited due to their small size. I know the big guys set the tone but it burns me when we expect all businesses to work like big businesses. You can't have it both ways. You either want a more personal approach and accept that it comes at the cost of flexibility or you choose the big guys and forgo the personal touch. We're one location in one city. Not many locations in many cities. That means a credit with us is a lot more limiting, especially if you're not in a tourist area. So saying "hotels and airlines are offering credits" doesn't mean much to me. I'm not a hotel or airline where a credit is a good option to pacify guests. Cancellations present a totally different set of issues for me. Now, if Airbnb wants to step in and help allow hosts to "act" like big hotels by allowing those credits to be used for travel to places other than the original booking, that changes things. But that hasn't happened yet.

I'll end my rant. Guess the point is, we all need to decide for ourselves what works and stop expecting small to act big since that expectation is ridiculous. There needs to be more flexibility here. It's not cut and dry.
6 Reply
Andrea Cole
OP
Real Estate Investor · Summerfield, NC · Member since 2016 · 56 posts · 55 votes
6y
@Steve K. I agree 100% about allowing to reschedule. I usually give this option. 50% refund is also put on the table. I think your expectations are reasonable and personally, I'd rather NOT have a disgruntled guest stay with us. My point was never to take money and run. I agree we must all share in this burden but unfortunately not all guests are approaching it this way.
4 Reply
Tara Scott
Member since 2019 · 1 post · 0 votes
6y
@Andrea Cole How do I offer a credit on the Airbnb platform?
0 Reply
Andrea Cole
OP
Real Estate Investor · Summerfield, NC · Member since 2016 · 56 posts · 55 votes
6y
@Tara Scott You ask a good question and there's no good answer (that I know of). It's more a gentleman's agreement that I'll reduce the rate on their next stay if they reach out to me :/
2 Reply
Tommy Loretz
Investor · Walnut Creek, CA · Member since 2016 · 17 posts · 21 votes
6y
@Andrea Cole
I was in Europe when President Trump banned foreign travel into the country. I’m currently writing this on the plane from London to San Francisco! We had to cancel several AirBNB locations and all were understanding and agreeable.
So if your policies contain a subsection for “worldwide infectious diseases” then follow it. But in all seriousness, I would never book with a person that didn’t refund for COVID-19.
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