Easy explainer: What AirBnB’s $405m lifeline means for Aussie hosts
AirBnB has unveiled a $405 million financial assistance package as worried travellers cancel their trips. Here’s who can access it and what relief is on offer.
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Airbnb is allocating $US250 million ($A405 million) to help offset losses by hosts around the world whose guests have cancelled bookings in the face of the coronavirus pandemic, following its announcement earlier this month that guests could get full refunds for certain reservations.
The aid, which will pay hosts 25 per cent of their normal cancellation fees, is being offered globally except for China.
Airbnb has also created a separate $US10 million ($A16 million) superhost relief fund providing grants of up to $US5000 ($8000) who rent out their own home.
Here’s what it means for you:
HOW DOES THE CANCELLATION PAYMENT WORK
The payments to hosts apply to the cancellation of reservations with check-in dates between
March 14 and May 31.
Because hosts can choose different cancellation policies, some requiring a penalty payment with others allowing free cancellation up to a certain date before check-in, not all cancelled reservations will qualify for a payment.
The payment applies retroactively to all COVID-19 related cancellations during this period
Airbnb says it will pay 25 per cent of what hosts would have received for a cancellation under their cancellation policy.
For example, if you were to receive $500 through your cancellation policy, Airbnb would pay you $125.
It comes after Airbnb extended it’s Extenuating Circumstances policy for guests, allowing them to cancel and receive a full refund or travel credit for reservations made before March 14 that begins anytime on or before May 31.
WHAT IS ON OFFER FOR SUPERHOSTS?
Airbnb superhosts will be able to apply for a grant of up to up to $US5000 ($8000). However, this will be by invitation only.
Superhosts will have to meet the following criteria in order to be eligible:
- Only share their primary or secondary residence - no more than two active listings
- Show a reliance on Airbnb as a vital source of income
- Have a verified identity
- Have been a Superhost for at least one year
- Have lost a significant percentage of their earnings due to COVID-19
WHAT ABOUT AIRBNB EXPERIENCE HOSTS?
Experienced hosts are also able to access the cancellation payment under the same terms as accommodation hosts.
They can also apply for the superhost grant (provided they are invited by Airbnb) if they meet the following criteria:
- Show a reliance on Airbnb as a vital source of income
- Have a verified identity
- Have been an Experience host for at least one year
- Have lost a significant percentage of their earnings due to COVID-19
WHEN DO THE PAYMENTS BEGIN?
Airbnb says cancellation payments will begin in April and will be paid monthly.
However, for superhosts and experience hosts who are recipients of grants, payment will occur about three days after the grant is approved.
There are no restrictions on how superhosts or experience hosts can use the grant, and they are not required to pay it back.
Payments will be made according to a host’s preferred payout method.
HOW CAN I SUPPORT COVID-19 RESPONDERS THROUGH MY AIRBNB PROPERTY?
Airbnb is currently running an initiative which aims to house 100,000 COVID-19 responders across the globe.
Hosts can opt-in to the program and offer their home for free. However, if hosts do decide to charge a COVID-19 responded for their stay, AirBnB will waive all associated fees.
Properties considered for the program will need to be entire homes, and have no other people present. Guests should be able to enter the home without any contact with a host, such as collecting a key from a lockbox.
The properties will then be pooled, and Airbnb will work with partners to connect them with listings available for COVID-19 workers.
Airbnb’s country manager for Australia Susan Wheeldon said: “Our nation’s healthcare workers are doing such incredible work under very difficult circumstances. The response from hosts who have already offered to provide accommodation for the people working tirelessly to help their fellow Aussies and slow the spread of COVID-19 is inspiring and we couldn’t be more grateful.
“Right now, we’re working to identify where the most urgent need is so we can best help connect hosts who’ve generously offered up their listings with healthcare workers.”
WHAT IS THE GOVERNMENT DOING TO SUPPORT SHORT-TERM RENTAL ACCOMMODATION PROVIDERS?
The Federal Government has not directed any stimulus measures towards the short-term rental accommodation industry at this stage.
The Australian recently reported that the Australian Short-Term Rental Association, Airbnb and rival short-term accommodation provider Stayz sent a joint letter to Treasurer Josh Frydenberg and Tourism Minister Simon Birmingham.
The letter called on the Federal Government to issue guidance to the big banks to allow short-term accommodation hosts to defer mortgage repayments and to provide relief for tax obligations on their rental income.
“The reality is these everyday Australians do not have deep pockets or access to corporate credit facilities like the larger/international hotel chains,” the letter reads.
“Like other parts of the tourism industry, STRA (short-term rental accomodation) operators and hosts have been severely impacted by a devastating trifecta of bushfires, drought and floods, and now the COVID-19 emergency.
“The significant reduction in visitor numbers and expenditure has meant financial and personal hardship for many and their families. This hardship is compounded by the uncertainty around how long the crisis and tourism downturn will continue.”
It is also worth bearing in mind that economic downturn as a result of the coronavirus pandemic, some banks are offering mortgage payment breaks of up to six months.
However, The interest during the paused time is also added onto the total loan balance owing.
Originally published as Easy explainer: What AirBnB’s $405m lifeline means for Aussie hosts