All Forum Posts by: Dave Stokley

 How can you net $50K per year when debt, taxes, insurance alone run $78K annually?

Where the heck do these people live that they keep getting stuck at home due to weather?  We've had 40" of snow here this week and flights are still taking off like normal.

In these instances I usually take it case by case.  We did let a guest cancel at our Orlando property because of Hurricane Ian even though Airbnb explicitly lists Florida hurricanes as expected events that the host is responsible for. 

Another guest wanted to cancel Thanksgiving and we did the "we'll refund you if we re-book" thing and that did end up re-booking, albeit at a lower rate, so we refunded them minus the difference in cost of the lower priced stay.  But that was on a holiday with a 30 day cancelation.  With 5 days already that's a super flexible cancelation policy (even if Airbnb calls it "moderate") and I doubt you'd re-book that close.

But yea, my confusion still remains what the heck these guests are doing that they're regularly unable to travel for an entire 3-day span.  I'd be skeptical of how truthful they're being with that.

I think that's too complicated given that it's the day before, so the chances of it being booked by another guest are low.

I think you have a very generous cancellation policy, so you could go either way.  

Part of you decision  may be the number of reviews you already have.  If you don't have many right now, a negative could be a big hit so refund it.  $530 saved won't compare to the $$$ lost if your average rating is pulled low because of one bad review.

However, if you already have enough reviews that one negative won't affect the average much, enforce your policy...it's already very generous.  Doing this, I would play the sympathy card of being a small business not able to easily absorb the late cancellation.  Apologize, apologize, apologize.  Temper it with something like "That's why I have a generous cancellation policy...because I can usually re-rent it within 5 days, but I simply can't the day before."

Another alternative is what (at least) one of my PMs does.  They never give refunds.  They stress, stress, stress that the only way a guest will ever get their money back is if they purchase trip insurance.  However, in that rare case of "no-insurance-but-needs-to-cancel," they will allow guest to use that payment toward a future, off-season, open date. Yes, their incentive is a little different that ours as the property owner, but it still may be an alternative for a more palatable solution.

I would say now because you can not control the weather and it is a short notice cancellation.

I would offer a discount on a future stay to try and keep from getting a bad review.

Hey Dave, 

Definitely a tough call! Before I was in RE investing I worked for The Walt Disney Company, and if I learned one thing, it's that customer service trumps all. Although it may be a tough pill to swallow right now, granting the refund might pay divedends in the future. Especially if you grant the refund request under the condition that they leave you a review. 

Not apples to apples here, but Disney almost always gave guests anything they requested, even if it was at a loss to them. In my opinion, it's no coincidence that they can charge $5 for a bottle of water and get people to stay customers for life.