Airbnb is paying hosts $250 million after they criticized the company for leaving them on the hook for coronavirus cancellations

brian chesky airbnb

Kimberly White/Getty

Airbnb CEO Brian Chesky.

  • AIrbnb has set aside $250 million to pay hosts impacted by its coronavirus policy, the company announced Monday.
  • Airbnb will pay hosts 25% of what they normally would have received through their own cancellation policies for trips with check-in dates between March 14 and May 31.
  • Hosts had expressed outrage after Airbnb overrode their policies by allowing travelers to cancel reservations and get full refunds, leaving hosts bearing most of the financial burden.
  • "We have heard from you and we know we could have been better partners," CEO Brian Chesky wrote in a letter to hosts.
  • Airbnb also announced other coronavirus-related efforts, including donations from its founders, enabling guests to financially support hosts, and enlisting hosts to house healthcare workers.
  • Visit Business Insider's homepage for more stories.

Airbnb announced Monday that it had set aside $250 million to help hosts regain some of the income they lose as a result of the company's coronavirus policy, which allows travelers to cancel trips and receive a full refund.

"When a guest cancels a reservation due to a COVID-19 related circumstance, with a check-in between March 14 and May 31, we will pay you 25% of what you would normally receive through your cancellation policy. This applies retroactively to all COVID-19 related cancellations during this period," CEO Brian Chesky wrote in a letter sent to hosts Monday.
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Chesky said Airbnb would begin issuing the payments in April and that guests who had booked trips on or before March 14 can still cancel and receive a "standard refund or travel credit equivalent for 100% of what they paid."

With few people traveling or plannings trips at all at the moment, it's unclear how many cancellations hosts will see during the time the policy is in effect, but an Airbnb spokesperson said the company expects that $250 million will be enough to cover any that are made.

The announcement comes after hosts expressed outrage at Airbnb for overriding their cancellation policies - which often only offer partial refunds for guests who cancel more than a few days after making the reservation - by allowing guests to receive full refunds for any coronavirus-related cancellations.
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While Airbnb's decision to allow full refunds likely pleased guests, hosts said they were unhappy about having to bear the vast majority of the cost of those refunds despite not having a say in the decision. Airbnb typically takes around a 12% cut from the amount guests pay, and when guests cancel, the company refunds those fees to them - meaning about 88% of the money being returned to travelers comes out of hosts' pockets.

"I believe we did the right thing in prioritizing health and safety," Chesky wrote in defense of the policy, before apologizing for making the decision without input from hosts. "We have heard from you and we know we could have been better partners," he said.The company also announced several other coronavirus-related efforts, including: $9 million contributed by its founders and $1 million by employees to support its top hosts who may be struggling to cover rent and mortgage payments; building a tool for guests to donate money to hosts they've previously stayed with; and enlisting hosts to house healthcare workers for free or at a discounted rate - Airbnb said 40,000 hosts so far had commited to that service.
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The company has been hit hard by the economic fallout of the coronavirus as travel has ground to a halt around the world. Airbnb has also been walking a tightrope as it tries to balance the interests of hosts, guests, employees, and investors - all amid plans to go public this year (though investors are concerned that those plans could be delayed amid tough market conditions).

As it tries to navigate an unprecedented and unexpected threat to its business, Airbnb has reportedly been listening to pitches from outside investors and has asked Congress for help by urging it to pass a collection of tax relief and loan measures that would specifically benefit its network of hosts.

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