It wasn’t long ago that life as an Airbnb Host was beautiful. We were all focused on improving our existing business, implementing strategies to help us be more efficient, pulling in 5-star reviews, and maximizing our profit through pricing strategies.

How things have changed.

To better understand where Airbnb might go from here it’s helpful to use the past as inspiration. Brian Chesky, the founder of Airbnb, frequently emphasizes that Airbnb is about community.

“Airbnb really started much more as a community. It became a business,” he says, “but it never stopped being a community.”

Straying from Community

The definition of community is a state or commonwealth where there is joint ownership or participation. This is exactly where Airbnb has strayed from their path according to founder of STR University, Richard Fertig,  “Airbnb’s policies tended to be more guest-centric as they attempted to scale,” taking the hosting community for granted along the way.

It’s understandable that Airbnb would want to focus more on guest bookings and guest experience, especially considering widespread rumors of an upcoming IPO (initial public offering of the company’s stock). But amid the COVID-19 pandemic that has swept across the globe, crushing industries such as tourism and hospitality along the way, this could be an opportunity for Airbnb to rebalance their efforts towards what made them successful in the first place- the Hosting Community.

“I’m Sorry” – The CEO Apology

As hosts know all too well, Airbnb took excessive measures in favor of guests during the Coronavirus outbreak, refunding 100% of guest stays at no cost to the guest. It’s important to note that this was done with complete disregard for the Host’s own cancellation policy to which the guest had already agreed.

Brian Chesky apologized to Airbnb hosts in a live video broadcast, continually referring to hosts as “partners” and saying he wishes he had consulted the hosting community in advance. While it may seem a little too late, these are challenging times. Airbnb has finally stepped up to the plate and is addressing host concerns which is a good start. 

4 Important Takeaways

The apology included four important announcements for which hosts should be aware:

(1) Airbnb is paying hosts $250M for the costs of COVID-19 reservations (details).

Guests with reservations booked on or before March 14th will still be able to cancel but hosts will receive 25% of what they would have received under their normal cancellation policy. This will reply retroactively to stays already cancelled and the costs will be funded completely by Airbnb.

This sounds great in theory, but Airbnb has continually pushed guests towards flexible cancellation policies as a way to make booking more appealing to travelers. Hosts have been rewarded with algorithm bumps and higher payouts and those taking advantage of this encouraged activity are left in the dust by this “help”.

Even those with a more strict cancellation policy who would have received 100% or 50% of their booking back are only receiving 25% of what they were initially owed. Doesn’t seem that great after all.

(2) $5K Superhost Grants (details)

Airbnb is contributing $10M to hosts who meet a strict set of criteria, saying they’ll be offered $5k grants that will not have to be paid back. However the criteria will not easily be met and a $10M split at $5k each indicates only about 2,000 hosts will be supported (assuming all grants at full price.)
The criteria include:

The cool thing here is that Airbnb employees started this initiative and Airbnb founders decided to join in.

(3) Guests can contribute directly to hosts

Airbnb is allowing guests to make contributions to guests who pay be in a tough spot by giving them a place to pay any host they’ve previously stayed with to help in covering their costs during this difficult time.

Although we’d all like to have faith in humanity, hosts are understandably dubious about this initiative succeeding. We’ll learn more as it rolls out.

(4) Small Business Grants, Loans, Assistance in the USA (details)

Airbnb has lobbied to be included in the United States financial relief package for hospitality thanks in part to 105,00 calls made by hosts to their representatives. This applies only to the United States for now, but Chesky has promised to pursue similar measures in other countries and locales affected by COVID-19. And let’s be honest- there isn’t a place on earth this won’t affect.

Fertig is concerned that Short-Term Rentals and the corresponding regulatory policy makes hosting even more risky as a result of this initiative. This has been evident in areas where STRs already have tight restrictions: hotels have been allowed to continue operations while Short-Term Rentals have been shut down.

This may suggest that STRs have a problem cleaning and disinfecting compared to their corporate counterparts, but in reality Airbnb style housing should be part of the solution.

What’s the better way to self quarantine, self Isolate, and stay in place: a hotel with lots of other guests or an Airbnb where social distancing is built-in?

The Bright Side

We haven’t been through anything like this before but we shouldn’t wait until “it’s over” to start planning for what’s next. Just as Airbnb took some missteps and is trying to correct their course of action, hosts should be doing the same. 

Perhaps Erica and Richard said it best (at 17:50 in video), “I think as a community, as business owners, as partners, ummm…”

“This could bring us together.” Richard chimed in.

“Yeah… and we could be better for it.”

In the coming weeks and months we’ll be publishing more tips and suggestions for how to stay ahead of the curve in the current Airbnb marketplace. Check back soon for updates!

Rob Jackson
Author: Rob Jackson

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