Blindsided Airbnb Hosts to Receive $250 Million in Compensation

Airbnb announced a $250 million package to support hosts, amid heavy criticism for the company’s lack of support as COVID-19 curbs travel, causing bookings to plummet.

  • By externalwire | March 31, 2020,3:45 pm
Blindsided Airbnb Hosts to Receive $250 Million in Compensation

Airbnb CEO Brian Chesky told hosts the company has set aside $250 million to cover some of their lost revenue from COVID-19 booking cancelations, via a video livestream on March 30.

Chesky apologized for not being more consultative with his “partners” (hosts) and announced that, “we will pay $250 million to hosts to help cover the cost of COVID-19 cancellations.”

In practice, that means hosts stung by COVID-19-related cancelations, with check-in for dates between March 14 and May 31, will be eligible to receive 25% of what they would normally receive under their cancelation policy–covered entirely by Airbnb.

Airbnb also set up a $10 million Superhost Relief Fund, started off with a $1 million staff donation and a $9 million contribution from the digital disrupter’s founders. In addition, the company is working to make it easier for previous guests to send payments to help out hosts, and has lobbied the US government to include US hosts in the COVID-19 Stimulus Bill. 

When the World Health Organization (WHO) declared the novel coronavirus a pandemic, Airbnb responded by allowing guests to cancel reservations and receive a full refund for bookings made from March 14 to May 31. 

The refunds came directly from the hosts, not Airbnb, and the high volume of cancelations that ensued left hosts struggling out of pocket and feeling let down by the global online accommodation marketplace. 

In a message broadcast from his home, Chesky acknowledged that Airbnb had blindsided hosts when it granted the free cancelations without consulting them.

“I’m sorry that we communicated this decision to guests without consulting you—like partners should. We have heard from you and we know we could have been better partners,” said Chesky. 

The CEO went on to add, “when your business suffers, our business suffers. We know that right now many of you are struggling, and what you need are actions from us to help, not just words.”

Many who rely on Airbnb, like property management company owner William Fuller, were left with empty booking calendars and no money to pay mounting bills and mortgage payments.

“If Airbnb truly believed in this change of policy and wants to help out all the folks in the world, that is fine, but they need to do it with their money, not other people’s money,” Fuller told USA Today on March 16.

Independent hosts echoed Fuller’s concerns, and property management companies were upset by the way they felt Airbnb’s “extenuating circumstances” policy unfairly favoured guests. 

Airbnb, like other tourism and hospitality businesses hit hard by the COVID19 outbreak,  has been forced to implement a range of cost saving measures. They’ve pulled advertising, which is expected to save the company $800 million, while the company’s co-founders are forfeiting their salaries and executives have agreed to a 50% pay cut. 

 

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