As their hosts face lost income, Airbnb commits $250 million to help
With coronavirus spreading across the globe, thousands of travelers have called off plans for vacations, work trips and family visits.
Responding to travel bans and a surge of requests for cancellations, the short-term rental platform Airbnb is offering unprecedented flexibility to delete bookings without penalties. When the policy was announced, some owners of short-term rentals saw their vacation-rental calendars wiped clean.
“I think we got about four cancellations in a day,” says Richard White, who owns four condos in Carolina Beach, North Carolina, which he rents out using Airbnb and other short-term rental platforms.
When the Carolina Beach Town Council voted in a contentious meeting to close local beaches, White’s cancellations increased again.
As Airbnb has expanded its cancellation policies related to the Covid-19 pandemic, hosts like White have lost a significant source of income.
On Monday, the company responded to some of those host concerns with the announcement of a $250 million Host Relief Fund to cover some costs of coronavirus cancellations.
The reimbursements are funded by Airbnb, and will go to hosts with qualifying cancellations, paying 25% of what they would normally receive from a canceled booking.
The best quarantine experience of your life?
Confronting the sudden and still significant income loss, some hosts are working to accommodate the changing face of travel during coronavirus. Even as more states issue stay-at-home orders, they’re tweaking listings with a speed that showcases just how nimble the gig economy can be.
Those coronavirus-ready listings reflect the varied ways small businesses are reacting to news of the global pandemic.
In Fort Lauderdale, Florida, Airbnb host Ashley Grimme has reimagined her luxurious, 5-bedroom property as a haven for essential personnel, renaming the listing “Essential Lodgers: Nurse, Doctors, National Guard.” (On March 26, Airbnb announced it was partnering with hosts in plans to lodge 100,000 coronavirus responders worldwide.)
Others saw an opportunity to offer well-appointed getaways for guests looking to self-quarantine in comfort.
“Escape from the boring and change up your environment to have the best quarantine experience of your life,” wrote a host in Cathedral City, California, in a listing inviting guests to “quarantine in style for 50% off.” (The listing has been changed to be more generic.)
A 5-bedroom house located near Palm Springs, the now-discounted listing offers optional perks including a grocery-delivery service, private yoga classes, a private chef and private massage. The California property also highlights an enhanced cleaning protocol, which now makes use of an alcohol-based disinfectant.
Cleanliness is a theme echoed in other listings, as well, such as a two-bedroom apartment in Nashville, Tennessee that was titled the “Perfect Self-Quarantine.” (It’s also since been edited.)
Along with photos of two bedrooms and two fold-out sofas, the listing features official-looking checklists touting “Medical Grade Decontamination,” and cleaning protocols reflecting CDC recommendations.
Airbnb itself has provided hosts with recommended cleaning practices, which include meticulous, labor-intensive steps to protect both guests and cleaners from the virus.
Where the gig economy meets local bans
But even the gig-economy hustle of short-term rental hosts can’t overcome local rulings banning short-term rentals altogether.
In Carolina Beach, Richard White saw his remaining bookings disappear when the town council announced on March 24 that any rentals with terms of fewer than 90 days would need to be vacated by March 27. (The town made an exemption for renters providing essential services related to Covid-19.)
“The town made the right call in shutting down the rentals,” says White. “Our feeling from the beginning was that everyone should be isolating, and staying at home and staying in place on their own to help, and that’s what we’ve been doing.”
Even so, White faces a major income loss. And Carolina Beach Mayor LeAnn Pierce understands the challenges faced by owners of vacation rentals as the community closes its doors.
“In 25 years of business, we have been through hurricanes and all kinds of things, but I’ve never had to lay off all my [hotel] employees like I did last week,” says Pierce, who owns the town’s Drifter’s Reef Hotel.
As Pierce watched news of the spreading coronavirus, though, she was concerned by a surge of phone calls she received from people from across the country deciding they’d rather quarantine at the beach.
“My council believes that the only way to defeat the virus is to flatten the curve, and we’re following the CDC guidelines,” says Pierce. “We’re 6,500 year-round people in our community, and in the summertime we get 30-40,000. We can’t manage that number of people in a pandemic.”
‘We ask you to respect our community’
Carolina Beach isn’t the only vacation destination hoping to stem the flow of outsiders. Recent days have seen a series of bans and recommendations that are disrupting the ability of short-term rental owners to bring in income.
Vermont Governor Phil Scott ordered all lodging, including hotels, Airbnb rentals and campgrounds, to suspend operations on Monday, allowing guests to finish their stays. His order allows new bookings only for essential workers and at state direction (for people in quarantine or who may be homeless.)
In a live-stream briefing on March 27, Florida Governor Ron DeSantis announced that stays in vacation rentals across the entire state would be suspended for two weeks. (The ban does not apply to travelers already staying in a vacation rental.)
On March 25, upstate New York’s Warren County requested that short-term rentals be discontinued immediately. (As of March 27, hundreds of Warren County Airbnb listings were still listed as available on the website, though it’s not clear whether the owners are actually renting them out.)
In Mono County, California, where travelers come to ski at Mammoth Mountain or hike in the Sierra Nevada mountains, the health department announced on March 21 that short-term lodging facilities could only be used to house essential workers, or for measures contributing to coronavirus mitigation and containment efforts.
The same week, the Mono County town of Mammoth Lakes asked outsiders to stay away entirely. “As a small, remote mountain community our healthcare facilities lack the capacity to handle a widespread outbreak of COVID-19,” said the announcement on the town website.
The desert communities of Palm Springs and Rancho Mirage, popular as getaways for vacationers from Los Angeles, made similar decisions.
On March 25, the City of Palm Springs released a statement that vacation rentals, hotels and home shares could only be used for purposes related to the mitigation and containment of coronavirus. The city directed that all bookings through April 20 be immediately canceled.
“Residents of other communities need to stay at home where they live,” said Palm Springs Mayor Geoff Kors in his statement, “so as not to add to the spread of the virus in the Coachella Valley, endangering our residents, frontline workers and local healthcare system.”
The economic impact on short-term rental hosts
As the world economy faces plunging stock markets and unprecedented unemployment claims, short-term rental hosts are assessing their own sudden loss of revenue.
Richard White, the Carolina Beach rental host, works in the film industry, but the rent from his four rental condos is key to his livelihood. In 2018, he says, rentals provided the bulk of his income.
“We’re in a situation where the film job I had shut down,” says White. “And now the rentals are all shut down.”
Like White, many Airbnb hosts are wondering how to cope with the unexpected shortfall, which could be significant.
A 2017 survey by the low-income lender Earnest found that Airbnb hosts make an average of $924 a month.
The loss of that income could strain already-tight budgets. In a recent survey conducted by Airbnb, 53% of responding hosts said short-term rental income helped them stay in their homes; 49% said they host on Airbnb to make ends meet.
“Right now, none of us knows what the future holds,” says White. “There’s a misconception that Airbnb hosts are these big businesses. But we’re just regular people trying to make a living.”
A $250 million relief fund
In addition to the $250 million Host Relief Fund announced on March 30, Airbnb created a $10 million Superhost Relief Fund, offering grants of up to $5,000 for hosts who rent their own homes and need help making rent or mortgage payments. (This fund only applies to top-rated Superhosts, and some Experience hosts.)
Bookings with check-in dates from March 14 through May 31 qualify for the special reimbursement, as long as the reservation was canceled due to coronavirus.
The policy applies retroactively, and payments will be issued starting in April.
Guests benefit from the updated policies, as well. Airbnb is extending penalty-free cancellations through May 31 for bookings made before March 14. (A previous policy extended to April 14.)
The company hopes the changes will help repair damaged relationships with hosts following several chaotic weeks in the travel industry.
“We have heard from you and we know we could have been better partners,” wrote Airbnb CEO Brian Chesky in a letter to hosts released on March 30. “What you need are actions from us to help, not just words.”
