By BLOOMBERG / Pic By BLOOMBERG
NEW YORK • Josh Ostroff had a difficult choice to make: Cancel a trip to Japan in March that he’d been promising his 10-year-old son for three years, or ignore travel warnings and put his family’s health at risk amid the coronavirus outbreak.
He decided to cancel the trip.
When the Toronto-based family asked for their money back, citing the Canadian government’s warning to “exercise a high degree of caution” in Japan, they received a refund from their hotels and a voucher from the airline. Airbnb Inc said no.
The San Francisco-based startup said the family didn’t qualify for a refund under its new “extenuating circumstances” coronavirus policy, which only applies to China, Italy and South Korea.
The home-share company’s official response to the family refers to the US Centres for Disease Control and Prevention (CDC): “If the CDC’s precautions are followed, you could safely travel to Japan.”
Ostroff was shocked. “I repeatedly asked about bringing a child into this situation and they did not answer,” he said. “I feel like Airbnb is being recklessly irresponsible here.”
Airbnb, which was founded in 2008 during the financial crisis as a cheaper alternative to hotels, is confronting a second major challenge in the coronavirus.
Navigating the global outbreak is trickier for Airbnb than for big hotel chains or airlines who serve only travellers and manage all of their inventory.
Airbnb is a two-way platform, connecting people who want to rent out all or part of their home with travellers seeking accommodations. For every guest cancellation the company approves, there is a host at the other end who winds up out of pocket.
In its drive to balance the needs of hosts, who sometimes get their entire income from listing property on the site, against travellers’ concerns, Airbnb — at least for now — is putting the onus on hosts to be accommodating, such as by offering refunds or loosening cancellation policies.
Part of the problem stems from Airbnb’s shared responsibility with hosts on refunds. Airbnb will give a full refund within the first 48 hours after a guest books a site.
After that, it’s up to hosts to set how much of a refund they’re willing to offer. These policies, outlined on each individual listing, can range from very flexible, offering free cancellation up to a day before, to very strict no refund whatsoever.
Airbnb says hosts offer flexible and moderate cancellation policies on more than 60% of current listings.
In Ostroff’s case, he had booked three Airbnb’s for the trip to Japan and got three very different responses to his refund requests.
The first host granted a full refund, but Airbnb still pocketed a US$125 service fee from the reservation.
The second host refused any refund and the third simply never replied. In all, the family lost more than US$1,000. After being made aware of the Ostroff’s situation by Bloomberg, Airbnb offered the family a full refund.
Airbnb said not all of its guests are angry. “We have heard from many guests who appreciate that their hosts have been flexible and helped them rearrange or cancel their travel plans with no penalty,” it said in a statement.
On Tuesday, Airbnb updated its policies to offer hosts more tools to grant refunds and, in turn, allow guests to postpone travel plans. It will reward hosts who are willing to be flexible on refunds by giving their listings more visibility and scrapping the 3% fee it typically charges.
The company also offered to return its service fee to guests as a coupon to be used on future bookings if trips have to be cancelled due to coronavirus.
“Travel on Airbnb is powered by people, not large corporations,” Airbnb’s head of homes Greg Greeley said in a statement.
Because of Airbnb’s “two-sided model, when a crisis like Covid-19 hits, we know that it doesn’t just impact us as a company, but also the individual stakeholders within our community: The hosts who rely on their Airbnb income, and guests who have their travel plans disrupted”. — Bloomberg