Airbnb updates cancellation policy: IMPACT FOR AIRBNB HOSTS

Thibault Masson

Airbnb updates cancellation policy

Airbnb has introduced a significant update to its policy framework, shifting from the Extenuating Circumstances Policy to the new Major Disruptive Events Policy, set to take effect on June 6, 2024.

Airbnb hosts who were active during the COVID crisis remember with dread how the company bypassed this Extenuating Circumstances Policy in March 2020 and let guests cancel any booking worldwide. So, a change of name is notable, if only for marketing purposes.

This change marks a pivotal adjustment in how Airbnb addresses reservations affected by major disruptive events, including natural disasters like hurricanes, pandemics, and other large-scale emergencies. For hosts, particularly those in areas prone to such events, understanding these changes is crucial for managing their properties and expectations.

What’s Changing for Airbnb Hosts?

Airbnb’s transition from the Extenuating Circumstances Policy to the Major Disruptive Events Policy represents a strategic refinement in how reservation cancellations due to unforeseen events are managed. This change, effective June 6, 2024, carries significant implications for hosts. Here’s an in-depth look at what this shift entails:

From Broad to Specific

Old Policy: Previously, the policy covered a broad spectrum of unforeseen circumstances, allowing for a wide range of events to justify reservation cancellations.

New Policy: The focus has shifted to specifically defined “major disruptive events.” These are events that significantly impact the ability to safely and legally complete a reservation at the property’s location, such as severe weather conditions, government-imposed travel restrictions, and other significant occurrences.

Implications for Hosts: This change means that cancellations will be more predictable and limited to truly significant events, potentially reducing the number of cancellations and associated financial unpredictability for hosts.

Clarified Conditions

Old Policy: The scope was broad, often leading to ambiguity about what qualified as an extenuating circumstance.

New Policy: Provides clear guidelines on what constitutes a disruptive event. For instance, hurricanes in hurricane-prone areas now clearly fall under the policy if they lead to government evacuation orders or significant utility outages.

Implications for Hosts: Hosts will have a clearer understanding of when cancellations are justified under the policy, reducing disputes and confusion around eligibility for cancellations and refunds.

Making Clear Mid-Trip Cancellations

Old Policy: The previous policy did not explicitly detail how mid-trip cancellations were handled, leaving ambiguity around the process and financial implications for both guests and hosts when an event occurred during a stay.

New Policy: It is now clearly stated that if a covered major disruptive event occurs during a guest’s stay, the guest can cancel the remainder of their reservation. Guests are entitled to a refund for the nights not stayed, and hosts can cancel the booking without facing fees or other adverse consequences.

Host and Guest Implications

Old Policy: Allowed guests to cancel with a full refund for a wide array of reasons, sometimes leaving hosts to absorb the financial impact.

New Policy: Maintains the provision for guests to cancel with a full refund but under more strictly defined conditions, which should align better with actual disruptive events.

Implications for Hosts: This change should lead to fewer unjustified cancellations, offering more protection to hosts’ income and reducing the instances where they are left out of pocket due to broad policy interpretations.

Practical Implications for Hosts

  • Understanding the Trigger Points: Hosts must be aware of the specific conditions that activate the policy. This understanding will aid in preparing for potential cancellations and in communicating with guests about the risks and policy implications.
  • Preparation and Communication: Especially in regions prone to natural disasters or other disruptive events, hosts need to prepare for potential cancellations under clearer and more predictable conditions. Transparent communication with guests regarding the risks and the policy’s application is essential.
  • Financial Planning: With the refined criteria, there may be fewer refunds issued under the policy, possibly benefitting hosts financially. However, hosts need to account for possible blocked dates following a cancellation and plan their financials to accommodate this.

FAQ for all Airbnb hosts

  1. What qualifies as a ‘Major Disruptive Event’ under the new policy?

    A Major Disruptive Event includes significant occurrences like natural disasters, government-imposed travel restrictions, public health emergencies, and other large-scale incidents that directly impact the ability to complete a reservation at the listing location.

  2. How will I be notified if my reservation is affected by a Major Disruptive Event?

    Airbnb will notify hosts via email, platform notifications, or both if a reservation is impacted by a Major Disruptive Event. Hosts should regularly check their contact information on Airbnb to ensure it is up-to-date.

  3. What are my responsibilities as a host if a Major Disruptive Event occurs?

    Hosts are required to comply with the policy by canceling affected reservations without penalty and assisting guests with obtaining refunds or rebookings as necessary.

  4. Will the new policy affect my cancellation policy rating or standing with Airbnb?

    Cancellations made under the Major Disruptive Events Policy will not negatively impact your cancellation policy rating or standing on Airbnb.

  5. Can guests still cancel for reasons not covered by the Major Disruptive Events Policy, and how does that affect me?

    Guests can cancel for reasons outside the policy, but these will be subject to the host’s standard cancellation policy. Hosts are encouraged to communicate clearly with guests to manage such cancellations.

  6. What documentation or proof is required to verify a Major Disruptive Event?

    Airbnb will rely on authoritative sources, such as government announcements or news reports, to verify a Major Disruptive Event. Hosts and guests may be asked to provide additional documentation in specific cases.

  7. How will compensation be calculated for reservations canceled under this policy?

    Hosts will not receive payouts for reservations canceled due to Major Disruptive Events. The specific compensation for guests will depend on the circumstances and may include refunds or travel credits.

  8. Are there any new insurance requirements or recommendations for hosts in light of this policy update?

    While not required, Airbnb recommends that hosts review their insurance policies to ensure they have adequate coverage for major disruptions and consider additional insurance if necessary.

  9. How does this policy interact with local laws and regulations?

    The Major Disruptive Events Policy is designed to comply with local laws and regulations. However, hosts should familiarize themselves with local requirements to ensure they are in compliance.

  10. What are the long-term implications of this policy on hosting with Airbnb?

    The policy aims to provide a clear framework for handling major disruptions, leading to potentially fewer unexpected cancellations and a more predictable hosting environment. It is designed to balance the interests of both hosts and guests during significant disruptive events.

FAQ for Airbnb Hosts in hurricane regions

  1. Will every hurricane trigger the Major Disruptive Events Policy, allowing guests to cancel for free?

    Not every hurricane will activate the policy. It will be triggered when a hurricane is officially forecasted to impact the area of your listing, leading to government advisories or orders that significantly affect the ability to complete a reservation.

  2. How far in advance of a hurricane’s expected landfall will the policy be activated?

    The policy activation depends on official forecasts and warnings. Typically, when a hurricane watch or warning is issued by authorities, Airbnb will assess and may activate the policy for the affected area.

  3. What happens if a hurricane is forecasted but changes course and does not impact my location?

    If a forecasted hurricane changes course and no longer poses a threat to your location, the Major Disruptive Events Policy will not apply, and the standard cancellation policy will remain in effect.

  4. Are there specific guidelines for what constitutes a hurricane-related Major Disruptive Event?

    Yes, the policy applies to hurricanes that are expected to have a significant impact on the ability to safely and legally complete a reservation. This can include mandatory evacuation orders, significant expected damage, or other government-issued advisories.

  5. If my property is not directly damaged by a hurricane but the surrounding area is affected, does the policy still allow guests to cancel?

    Yes, if the hurricane’s impact on the surrounding area significantly disrupts travel, utilities, or safe access to your property, the policy would likely allow for cancellations.

  6. What are my obligations regarding property readiness and guest communication in anticipation of a hurricane?

    Hosts are expected to ensure their property is safe and to communicate proactively with guests about the potential impact of an incoming hurricane, including sharing safety information and local emergency contacts.

  7. How will Airbnb assist hosts in hurricane-prone areas to mitigate the financial impact of this policy?

    Airbnb may provide resources, guidance, and support to help hosts manage cancellations and prepare for hurricane season. Hosts are also encouraged to have appropriate insurance to cover losses due to natural disasters.

  8. Does the policy cover the aftermath of a hurricane, such as cleanup and restoration periods?

    Yes, if the aftermath of a hurricane continues to prevent or legally prohibit the completion of a reservation, the policy can apply. Hosts should communicate with Airbnb and affected guests about the status of their property and the surrounding area.

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