Airbnb to pay $250M to hosts to cover cancellation costs due to COVID-19 crisis
In a letter to stakeholders, Brian Chesky, Co-founder of Airbnb, has outlined the unicorn’s plans to tackle the coronavirus crisis, which has devastated the world economy.
Amid travel restrictions in many parts of the world aimed at slowing the impact of COVID-19, Airbnb has updated its Extenuating Circumstances policy through which guests who made reservations before March 14 – beginning on or before May 31 – can cancel them, and get a full refund or a travel credit if they are impacted by COVID-19 and can’t travel.
"On March 11, when the World Health Organization declared a pandemic, we were faced with a dilemma. If we allowed guests to cancel and receive a refund, we knew it could have significant consequences on your livelihood. But, we couldn’t have guests and hosts feel pressured to put themselves into unsafe situations and create an additional public health hazard. We determined that we had to allow your guests to cancel and receive a full refund—including all our fees,” Brian Chesky wrote in the letter to stakeholders.
Airbnb has also outlined its commitment to the safety and well-being of the community, and has announced several initiatives to navigate the disruption to travel:
Pay $250 million to hosts to help cover the cost of COVID-19 cancellations
Airbnb has set aside $250 million for hosts to help cover the cost of COVID-19 cancellations. It will pay their hosts 25 percent of what they would have normally received through their cancellation policy. This applies retroactively to all COVID-19 related cancellations from March 14 to May 31. Guests with reservations booked on or before March 14 will still be able to cancel and receive a standard refund or travel credit equivalent to 100 percent of what they paid.
This applies retroactively to all COVID-19 related cancellations during this period. This cost will be covered entirely by Airbnb. These payments will begin to be issued in April. Guests can go to airbnb.com/250msupport for more details.
Creating a $10 million Superhost Relief Fund
The fund is constituted for Superhosts who rent out their own homes and need help paying their rent or mortgage. It will also help long-tenured Experience hosts trying to make ends meet.
Brian explained, "Our employees started this fund with $1 million in donations out of their own pockets, and Joe, Nate and I are personally contributing the remaining $9 million. Starting in April, hosts can apply for grants for up to $5,000 that don't need to be paid back.”
Superhosts can go to: airbnb.com/superhostrelief for more details.
Financial support to hosts by guests
Guests can directly send a note along with a contribution to any of the hosts who they’ve previously stayed with.
"We are making it easy for your previous guests to send financial support directly to you. We have heard from countless guests who are incredibly grateful for the flexibility of Airbnb hosts and are interested in supporting you financially. We are creating a way for guests to send a note along with a contribution to any of the hosts who they’ve previously stayed with. We expect this to go live in April. We know that even a little goes a long way during this challenging time," Brian added.
Support for hosts in the US government’s recent COVID-19 Stimulus Bill
This legislation now allows US hosts to take advantage of many relief measures, including small business grants, small business loans, and unemployment assistance
Airbnb is also working on other initiatives and has promised to provide more details in the coming weeks. These include actively working with experts and epidemiologists on cleanliness standards to keep hosts and guests safe, trip insurance, and programmes to reintroduce demand to help rebuild businesses.
Airbnb is also helping over 100,000 healthcare providers, relief workers, and first responders by providing housing to them either for free or at subsidised rates. The company says over 40,000 hosts have already volunteered to help.
According to reports, Airbnb founders will forego their salaries for the next six months while the executives will slash half of their salaries. The company is also looking at pausing their marketing campaigns to save $800 million and has reportedly communicated to its employees that a 2020 bonus is unlikely.
With several airlines grounded and borders closed, the global travel industry has come to a halt. According to the World Travel and Tourism Council, the coronavirus pandemic could cut 50 million jobs worldwide in the travel and tourism industry, which currently accounts for 10 percent of the global GDP.
(Edited by Kanishk Singh)