CANCELLED BOOKINGS

The travel and tourism industry got hit tremendously, if not, one of the biggest industries that has

been widely affected by Covid-19. Looking into macro perspective, hotels and flights were the

main factors that felt the most impact, but looking into a smaller scale, Airbnb and short-term

rental property owners have felt the same devastating effects of tourists putting all travels on

hold due to the pandemic. Airbnb has been accommodating guests around the globe since 2008,

and Covid-19 has taken a toll on their business. According to Lane (2020), people have been

choosing to limit travel due to the alarming rise of the infected cases, and some local

governments have “put restrictions on short-term rentals”. IPX 1030 have recently conducted a

survey on part-time and full-time Airbnb hosts and as well as guests in America who have used

the platform and the following was the summary, in quote:

 “47% of hosts don't feel safe renting to guests while 70% of guests are fearful to

stay at an Airbnb.

 64% of guests either have cancelled or plan to cancel an Airbnb booking since the

pandemic started.

 Airbnb hosts expect a 44% decrease in revenue June-August. Hosts have dropped

their daily rates as much as $90 on average.

 45% of hosts won't be able to sustain operating costs if the pandemic lasts another

6 months (16% have already missed or delayed a mortgage payment on one or

more of their properties).

 On average, hosts have lost $4,036 since Covid-19 began to spread in the US.”

It is shown that almost half of the respondents who have been Airbnb guests said they canceled

their bookings, while 24% canceled bookings planned for this summer.
Because of this, Airbnb found a way to deal with cancellations and are now providing the

following coverage for COVID-19 under their new extenuating circumstances policy. For a brief

summary, this is what Airbnb (2020) has stated, “Reservations for stays and Airbnb Experiences

made on or before March 14, 2020, with a check-in date within the next 45 days from today, are

covered by the policy and may be canceled before check-in. Guests who cancel will have

cancellation and refund options, and hosts can cancel without charge or impact to their Superhost

status. Airbnb will either refund, or issue travel credit that includes, all service fees for covered

cancellations. In order to cancel under the policy, you will be required to attest to the facts of

and/or provide supporting documentation for your extenuating circumstance.

The host’s cancellation policy will apply as usual to reservations made after March 14, 2020.

Cancellations will be handled according to the extenuating circumstances coverage in effect at

the time of submission, and reservations that were already canceled will not be reconsidered.

If a reservation has already begun (the check-in has passed) this extenuating circumstance does

not apply.”

This policy was intended to “protect guests and hosts from unforeseen circumstances that arise

after booking.” Yet after it has been declared as a global pandemic by the World Health

Organization, the existing “extenuating circumstances policy no longer applies because COVID-

19 and its consequences are no longer considered unforeseen or unexpected.”

INCOME

With how badly the pandemic has damaged tourism industry, business establishments like

Airbnb were struggling with the sudden drop of demand. The company was having a hard time

keeping the business going in the midst of a global pandemic. Because of this, Airbnb slashed

one-fourth of its workforce as the virus crushes the travel and tourism industry. Airbnb has

explained that “it will try to soften the blow with benefits including providing 12 months of

health insurance to laid-off workers”. According to Bosa (2020), in order to get through the

crisis, the company has “laid off about 25% of its workforce — about 1,900 of its 7,500

employees — and raised $2 billion in a combination of equity and debt to shore up its balance

sheet”. In line with this, Airbnb has also decided to pause activities that do not directly support

their core such as transportation. They have scaled back their investments in hotels and other

luxury properties as well. From the same source, it was stated that “Airbnb established a $250

million relief fund to help hosts through the crisis,” but a lot have unfortunately struggled to

collect a payout from the said company. Completely frustrated, some hosts have decided to build

their own direct-booking sites, while some other hosts “exited the vacation-rental market

altogether and put their homes into the short-term residential rental market”. Conway says they’ll

go public when they’re ready. “The capacity of the platform to meld and adapt in real time to

external events is a differentiator that makes this just a completely different company with no

real comp in their sector.” (Bosa, 2020)

SAFETY PROTOCOLS

For months, various Airbnb hosts have struggled with the financial side effect from the surge of

cancellations due to the pandemic. Now hosts are challenged to confront a different kind of
struggle as “that demand comes back: how much they are willing -- and can afford -- to do to

ensure their properties are safe for customers resuming travel while the pandemic rages on”

(Yurieff, 2020). In an interview with a local Airbnb host, Donna Lyerly, she stated that she and

her team are now spending about four hours or more each week to disinfect the establishment

with strong chemicals. They “drain and clean outdoor hot tubs, wipe board game pieces and

remove items that are harder to sanitize, such as throw pillows and decorative bedspreads”. The

cleaning issue presents a unique challenge for Airbnb at a time when it is finally seeing travel

bounce back from its fall. It must simultaneously work to instill confidence in guests that their

stays will be safe while also trying not to overburden the millions of hosts who power its

platform and have already been frustrated by recent company moves and are cash-strapped

during the pandemic. (Yurieff, 2020). In accordance to this, Airbnb released new enhanced

cleaning protocols for hosts with guidance from a former US Surgeon General, including

recommendations for how to clean every room in a home and an opt-in feature called “Booking

Buffer” that creates an automatic 72-hour vacancy period between guests. Hosts who abide to

this cleaning protocol will get a special call-out on their listing that guests can see. On the other

hand, hosts who don't opt in to these tools, it would be difficult for Airbnb to monitor how hosts

are cleaning homes.

"Although risk in travel can never be fully eliminated in any kind of lodging, we designed our

expert backed cleaning protocol to help provide more peace of mind to guests and hosts," an

Airbnb spokesperson said in a statement provided to CNN Business.

Airbnb said homes provide the benefit of private spaces without the risks of common spaces like

lobbies or dining halls that travelers might find in a hotel, and has said that hosts have an

incentive to keep homes clean to receive good reviews. In contrary, some analysts argue that
Airbnb does not have the same consistent standards that a hotel would have and individual

properties can be difficult to vet.

“Hotels have universal cleaning ingredients, training and even consistent rooms which enable

very structured and consistent processes,” said Sucharita Kodali, an analyst at research firm

Forrester. “Airbnb cannot maintain standards and it has no great way of auditing procedures in

individual venues. The hope is that ratings and reviews are the auditing process but who wants to

be the guinea pig for that?”

To ensure the cleanliness of the place, some Airbnb hosts or cleaners would wait 24 hours to

enter the property after a guest has left. This could affect their income and even then, they’re still

doing a deep clean and comply to the rules laid out by the company.

STRATEGIES THAT ARE BEING ADOPTED BY AIRBNB HOSTS TO MINIMIZE

THE IMPACT OF COVID-19

The COVID-19 has and is still affecting many in different communities and there is still no

telling when everyone would be able to get back up from this challenge. Despite all this, many

are still eager to go outside and take local stays and travels. In order to cope with changes,

Airbnb hosts has adopted strategies that may help minimize the impacts of COVID-19.

Implement a more flexible cancellation policy. “Understandably, many guests are uncertain

about booking future travel. If you currently have a strict cancellation policy in place, consider

switching to a flexible or moderate one (you can always go back to your strict cancellation policy

as needed). Knowing they have more flexibility to cancel may give guests the confidence to

move forward with a new reservation” (Airbnb, 2020).

Updating listings and adding amenities. With this, Airbnb (2020) has also shared ways that

may help hosts garner guests in the new normal such as opening the calendar for longer stays—

and offer weekly or monthly discounts and letting guests know the space has the amenities they

need right now. Airbnb says, “by opening your calendar up for longer stays, you can attract these

guests, get more predictability throughout the month, and reduce the amount of time you spend

cleaning and prepping for new guests. Consider offering a discount on stays of 7 days or longer

—less than 50% of hosts offer a weekly or monthly discount, and those who do tend to get more

bookings for longer stays.” And followed by “if your space offers things like fast Wi-Fi, a

comfortable workspace, and/or is suitable for children, make sure to update your amenities to

reflect that. Please keep in mind that we’re encouraging all guests to respect local guidelines

about gatherings or social interactions” in regards with adding amenities to the property.

Offering self-check in and reviewing cleaning routines. As technology evolves, so as the

preferences of guests in terms of checking-in. Many guests would rather self-check in rather than

meeting in person. With this, Airbnb hosts may install key lockbox, smart lock with a keypad, or

anything similar for security purposes. This trend among Airbnb properties of using new

methods of security has become timely in the current situation in which having contact has to be

avoided. These new technologies could offer an additional sense of safety to the guests checking

in.

Review cleaning routine. Above everything else, having a clean environment is the most

important thing to be considered wherever an individual go. Airbnb hosts may want to consider

being transparent about the cleaning process, available cleaning products for the guest to use, and

such. This may give them the thought that they are safe inside the property.
References:

Airbnb (2020). COVID-19 & your hosting business: How to minimize the impact. Retrieved

October 1, 2020, from https://www.airbnb.com/resources/hosting-homes/a/covid-19-your-

hosting-business-how-to-minimize-the-impact-152

Airbnb (2020). Extenuating Circumstances Policy and the coronavirus (COVID-19). Retrieved

October 1, 2020, from https://www.airbnb.com/help/article/2701/extenuating-

circumstances-policy-and-the-coronavirus-covid19

Bosa, D. (2020). Airbnb is poised for a comeback after a brutal spring. Retrieved October 1,

2020, from https://www.cnbc.com/2020/06/16/airbnb-poised-for-comeback-after-brutal-

covid-19-spring.html

Lane, L. (2020). How Bad Are Covid-19 Pandemic Effects On Airbnb Guests, Hosts? Retrieved

October 1, 2020, from https://www.forbes.com/sites/lealane/2020/06/09/how-bad-are-

covid-19-pandemic-effects-on-airbnb-guests-hosts/#7e9d41fd7432

Loizos, C. (2020). COVID-19 forced Airbnb to rethink its product offerings; here’s some of

what it came up with. Retrieved October 1, 2020, from

https://techcrunch.com/2020/04/24/covid-19-forced-airbnb-to-rethink-its-product-

offerings-heres-some-of-what-it-came-up-with/?guccounter=1

Manila Bulletin (2020). Airbnb slashes staff in effort to ride out pandemic. Retrieved October 1,

2020, from https://mb.com.ph/2020/05/06/airbnb-slashes-staff-in-effort-to-ride-out-

pandemic/
Manila Bulletin (2020). Airbnb unveils new cleaning protocols in bid to revive bookings.

Retrieved October 1, 2020, from https://mb.com.ph/2020/04/28/airbnb-unveils-new-

cleaning-protocols-in-bid-to-revive-bookings/

Taylor, C. (2020). Airbnb has a specific policy for coronavirus-related cancellations. Retrieved

October 1, 2020, from https://www.cnbc.com/2020/03/05/coronavirus-whats-airbnbs-

cancellation-policy.html

Yurieff, K. (2020). Airbnb hosts struggle with how far to go to make properties safe during

pandemic. Retrieved October 1, 2020, from

https://www.cnn.ph/business/2020/6/15/Airbnb-hosts-stuggle-properties-safety.html