Response and Summary of Airbnb CEO Talk of Coronavirus13 min read

airbnb ceo message coronavirus

A week after this, Airbnb secured $1 billion dollars in private equity. I recorded a video of my thoughts and reactions.

 

Click here to see the full 15-minute recording.

 

Update: In the past two days, I’ve been emailed three times by Airbnb asking to join the first responder’s program. This is not ok. Airbnb, you are not allowed to ignore me when it comes to decisions that matter to me as a host, but when you want something from me to bug me with emails. One email is sufficient, do not follow up with me three times.

 

To start the conversation, Brian Chesky, CEO of Airbnb, apologized to Airbnb hosts around the world. He recognized him and his company’s lack of actions over words as it relates to their repeating that Airbnb hosts are their partners.

 

I’m not envious of Airbnb right now! If they didn’t offer full refunds, the media would bounce on them for being a greedy company, but if they do, hosts would bounce on them.

 

I can only speak for myself, but I hope I’m also speaking on behalf of many other Airbnb hosts, when I say that I accept your apology and offerings (even though it looked as if you were reading off a script). But, actions speak louder than words. What will your actions be when the next crisis emerges?

 

Don’t mistake our kindness for weakness. We have many options, your competitors, including direct bookings. One “host revolution” will bankrupt your company. This is not a threat. It’s a plea. We love Airbnb. Love us back. Give equal priority to your greatest asset: The Host Community.

 

Chesky identified four actions the company will be putting into action immediately as a result of their actions related to coronavirus.

 

Action #1: Paying Airbnb Hosts $250 Million For Cancelled Reservations

On March 17, 2020, in my Coronavirus versus Airbnb: How To Win video I proposed a one-third split related to cancellations due to coronavirus. The guest, the host, and Airbnb each take a 33% hit for this unique situation. Even though I have a flexible cancelation policy and promote this as the best cancellation policy, I did not think it was fair of Airbnb to override pre-existing cancelation policies.

 

Well, to account for making these big decisions without any input from the host community, Airbnb will pay these hosts 25% of what they’d normally receive.*

 

Chesky said, “guests with reservations booked on or before March 14th will still be able to cancel and receive the standard refund or travel credit, but when the guest cancels one of these reservations due to COVID-19, we will pay you 25% of what you’d normally receive through your cancellation policy.”

 

This applies retroactively to all cancellations you’ve had since March 14th.

 

For any reservations booked after March 14th, your cancelation policy will stay as-is.

 

Click here to learn more about the $250 Million fund for Airbnb hosts affected by cancellations resulting from covid-19.

 

*For a reservation to be eligible under our extenuating circumstances policy, it must have been for accommodations and booked on or before March 14 with a check-in between March 14 and May 31, 2020. If a reservation is covered:

  • Guests will be able to cancel for a full refund for COVID-19-related circumstances.
  • Airbnb will pay 25% of what you would’ve received for a cancellation based on your cancellation policy. For example, if you would normally receive $400 USD through your cancellation policy, we’ll pay you 25% of that—or $100 USD.
  • We’ll send an email with more details in early April to hosts who are getting a payout. Future payments from the fund will be made on a monthly basis to hosts with qualifying cancellations.
  • This policy will also apply retroactively, including any cancellations you may have had since March 14.

 

If I received a cancellation for a reservation booked on or before March 14 with a check-in after May 31, will it be eligible for the 25% offer?

No, but we plan to provide the guest the opportunity to cancel or re-commit to the reservation. We know that nothing is more frustrating than getting a last-minute cancellation. We feel it’s better to be transparent in the near-term so that you have the opportunity to seek out another booking or make other plans for your property.

 

Action #2: $10 Million Superhost Relief Fund

For Airbnb Superhosts* and long-tenured Experience Hosts, Airbnb is offering grants of up to $5,000. This is only available for Home Hosts who need help with the mortgage.

 

The neat thing about the fund is that it was started by the Airbnb employees, which I think is super cool, who raised $1 million. The founders have contributed the remaining $9 million.

 

Click here for details on the Superhost Relief Fund.

 

*What are the eligibility criteria for hosts who offer a place to stay?

The Superhost Relief Fund supports Superhosts and Airbnb Experience hosts struggling to make ends meet due to the decline in travel caused by COVID-19. This specific fund supports hosts from every country and region except mainland China, where hosts already have a dedicated assistance program.

To qualify, hosts who offer a place to stay must:

  • Only share their primary or secondary residence—no more than 2 active listings
  • Show a reliance on Airbnb as a vital source of income
  • Have a verified identity
  • Have been a Superhost for 1+ years
  • Have lost a significant percentage of their earnings due to COVID-19

We want to support as many hosts as we can, but we also want that support to be meaningful. So we’ll be reviewing applications carefully and will select only those hosts who demonstrate the most need.

What are the eligibility criteria for hosts who offer Airbnb Experiences?

The Superhost Relief Fund supports Superhosts and Airbnb Experience hosts struggling to make ends meet due to the decline in travel caused by COVID-19. This specific fund supports hosts from every country and region except mainland China, where hosts already have a dedicated assistance program.

To qualify, Experience hosts must:

  • Show a reliance on Airbnb as a vital source of income
  • Have a verified identity
  • Have been an Experience host for 1+ years
  • Have lost a significant percentage of their earnings due to COVID-19

We want to support as many hosts as we can, but we also want that support to be meaningful. So we’ll be reviewing applications carefully and will select only those hosts who demonstrate the most need.

 

Action #3: Allowing Guests To Send Financial Support Direct To Hosts

This is bizarre. How many guests are actually going to send money to a prior Airbnb host, especially now when most people are hurting for money? Answer: not many.

 

Even if they do, a $20 payment here and there wouldn’t move the needle at all. Maybe a nice gesture but resources probably spend more efficiently elsewhere.

 

Airbnb is creating a tool that will allow prior guests to send financial support directly to hosts if the host chooses to receive it.

 

No further details were provided, but this tool should go live in April.

 

Action #4: Covid-19 Stimulus Bill Support, US-only

The United States has passed some potentially relevant legislation for gig workers to include Airbnb hosts.

 

Chesky said, “this legislation allows hosts in the US to take advantage of the relief measures. For example, you will now be available for small business grants. You will be available for small business loans and unemployment assistance.” This means that Airbnb hosts are considered small businesses and that’s a good thing for economic relief.

 

Chesky mentioned similar actions in other countries without giving specifics.

 

Airbnb To House 100,000 Healthcare Providers

Airbnb is helping to house healthcare providers, relief workers, and first responders by providing housing to them for free or with a subsidy. So far 40,000 of the 100,000 home goal has been reached. You can also donate monetarily via Paypal, details at the link below.

 

Click here to learn more about this initiative to house COVID-19 first responders.

 

Host Community Question: How Long Can Airbnb Survive?

I’ve heard some rumors that Airbnb has run out of operating capital due to no bookings and only refunds. This is not true. Airbnb is not going public to raise money. This is why they considered a direct market listing. Airbnb has plenty of cash to weather a multi-month, if not much more, worldwide freeze on travel.

 

However, this is not the case. Travel has not frozen. Chesky confirmed that more than half of their reservations are for a month or longer and many bookings are for space to work at that is within driving distance, but outside their home. In fact, Smartbnb has created a brand new company to address this need for a local home office. Airbnb also is seeing an uptick in local travel.

 

From my personal experience as an Airbnb host and property manager, I had receive numerous long-term inquiries, more than is normal, though my bookings have been cut in half.

 

Conclusion: A Word On Behalf Of The Host Community

Chesky ended by saying something that I love: “Things are never quite as bad or as good as they seem.”

 

Nothing truer has ever been said.

 

We’re stronger together and we know how much we both need each other. But, in times of stress, our true colors shine through. We appreciate this announcement and the initiatives that Airbnb has started to implement.

 

Moving forward, please treat us more as partners rather than address our needs later. Again, I’ll reiterate that I’m not envious of Airbnb’s position, but I fear these decisions were hasty. Airbnb has to answer to numerous parties: guests, hosts, and investors. Big decisions like these need input from all three as they affect all three. Clearly, you’ve gotten yourself into trouble with one of these groups, I hope not all three.

 

Here is the original letter posted by Brian Chesky, CEO of Airbnb, in his talk on Coronavirus:

Dear Host,What a devastating couple of months this has been for all of us. Like many of you, I wake up every day distanced from friends and co-workers, wondering what the world has in store. As I see the news every day, my heart goes out to all the countries, communities, and families that are being overwhelmed by the scale and impact of this crisis.Amidst all this, the global travel industry has come to a halt. Airlines are grounded and borders are closed. Most of us—including our guests—are on government advised lockdowns, unable to leave our homes. Travel as we know it is almost impossible.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. Please know this decision was not a business decision, but based on protecting public health.However, while I believe we did the right thing in prioritizing health and safety, 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.Although it may not have felt like it, we are partners. 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.Here are some actions we are taking to help you navigate the crisis.We will pay $250 million to hosts to help cover the cost of COVID-19 cancellations.
When a guest cancels an accommodation 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. This cost will be covered entirely by Airbnb. These payments will begin to be issued in April. Guests with reservations booked on or before March 14 will still be able to cancel and receive a standard refund or travel credit equivalent for 100% of what they paid. You can go to airbnb.com/250Msupport for more details.We are creating a $10 million Superhost Relief Fund.
This is designed for Superhosts who rent out their own home and need help paying their rent or mortgage, plus long-tenured Experience hosts trying to make ends meet. 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. You can go to airbnb.com/superhostrelief for more details.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.We have worked together to secure support for hosts in the US Government’s recent COVID-19 Stimulus Bill.
This legislation now allows for US hosts to take advantage of many relief measures, including small business grants, small business loans, and unemployment assistance. A huge thank you for the more than 105,000 calls and emails you made to members of Congress.We are also working on other initiatives and we will provide more detail in the coming weeks. These include actively working with experts and epidemiologists on cleanliness standards to keep you and your guests safe, trip insurance for you and your guests, and programs to deliver demand to help rebuild your business.My commitment to you is to rebuild our partnership. When we are working together, we are at our strongest and absolute best. I’ve seen an example of this happen recently in our combined efforts to offer housing for medical responders on the front lines. Together we are helping to house over 100,000 healthcare providers, relief workers, and first responders by providing housing to them for free or with a subsidy. Over 40,000 of you have already raised your hands to help. Visit airbnb.com/covid19relief to join them.Trust is the foundation of a partnership, and it is built over time. We know that we have some work to do in strengthening yours, but it’s our priority and we are committed to it. When travel comes back—and it will—we look forward to welcoming millions of guests together again.

Brian Chesky
I'm Danny, the Airbnb expert

About Danny Rusteen:

Starting in 2012, Danny has been an Airbnb employee, Superhost, and Airbnb property manager. Danny lives in Airbnbs (1,000 nights). As a guest, Danny has traveled to 33 countries and sifted through thousands of Airbnb listings, so he knows what makes a listing stand out and how to offer a world-class experience to your guest. Follow his journey.

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