The couple typically see peak bookings for their 22 Airbnb rentals mainly across Phoenix, Arizona from January to March, largely due to good weather and various conferences and events. They have had around 150 cancellations to date due to the coronavirus pandemic.
“It’s like someone dropped a nuclear bomb on our calendar,” Martin told CNN Business. “It’s just wiped away. It’s crazy. “
Travelers have rushed to change their upcoming plans as the new coronavirus spreads around the world, and many countries and cities have announced travel bans, on-site shelter orders or quarantines. Covid-19 has infected more than 1.34 million people and killed more than 74,000 worldwide, according to Johns Hopkins University.
For more than a decade, Airbnb has attracted people who have renovated garages and guest rooms or bought new properties to earn or supplement income. In some cases, the deluge of cancellations threatens their ability to pay their mortgage, bills or property costs. The severe recession has forced some Airbnb hosts to abandon their homes to make them available for long-term rental, to struggle to suspend mortgage payments and to watch their bank balances fall.
Martin, who also works as a professor of education at Grand Canyon University in Phoenix, said the cancellations are likely to cost about $ 130,000 in expected revenue. Although the couple do not own the properties they list on Airbnb, they do rent them through agreements with real estate developers and mainly sublet them on Airbnb in a practice known as arbitration. This allows the family to earn a lot more money than with Martin’s day job.
“We are still dependent on monthly rent,” said Martin, adding that they should be able to manage with cash reserves, as well as long-term tenant income and the percentage that Airbnb covers for cancellations, until September. “Beyond that, no one knows what will happen to us. “
In the meantime, the Martins have found some success in local rentals, such as people going through divorces and needing housing. They also offer a 70% discount for longer term rentals.
Airbnb itself is in a difficult position. After announcing a broader cancellation policy to appease frustrated customers, CEO Brian Chesky later apologized for not consulting his hosts. Airbnb will need to keep its hosts and users happy to weather the pandemic. (Airbnb is said to have delayed plans for a stock market start this year.)
Last week, Airbnb announced that it would donate $ 250 million to hosts to help cover the costs of coronavirus cancellations. It will pay hosts 25% of what they would typically receive through their individual cancellation policies. Airbnb announced Monday that Silver Lake and Sixth Street Partners will invest $ 1 billion in the business. “The new resources will support Airbnb’s ongoing work to invest for the long term in its community of hosts who share their homes and experiences,” Airbnb said in a press release.
The company has also created a designated $ 10 million “superhost” relief fund for people who rent their own house on the platform and need help paying their rent or mortgage, and “long time” hosts for Airbnb Experiences. Hosts can apply for grants of up to $ 5,000.
This builds on Airbnb’s previous announcement to offer free or subsidized housing to people working on the front lines of the coronavirus pandemic, including healthcare professionals, emergency workers and rescue workers .
The hosts had mixed reactions to the announcement of financial assistance. Some praised the efforts; others said they were too small, given that there are 2.9 million Airbnb hosts worldwide. “I am glad they are taking steps to financially support the hosts, but I wonder how Airbnb will fairly make critical decisions about who will receive the funds,” Airbnb host Diana Pasquali told CNN Business. “I hope they will create a fair process for distributing funds to the poorest hosts. “
In private Facebook groups for Airbnb hosts viewed by CNN Business, the announcements sparked heated debates about how the company should help its hosts.
Some Airbnb hosts have stated that the situation has prompted them to rethink their overall Airbnb strategy, such as shifting to longer term rentals, making their property available for alternative uses such as offices for people working at distance or registration on competing sites, such as HomeAway, Facebook. Marketplace or Craigslist. Some are considering offering customers discounts or gift cards for future reservations.
Chris Morrow and husband Marty, who typically rent their homes on Airbnb for the weekend to help pay their mortgage, have temporarily left their homes in San Diego County to rent them to health care workers, first responders or other people in need. They said the house, where they had lived for seven years, would be available with an 80% discount for stays of at least 30 days. (They are currently living on their nearby boat.)
“We never expected to have to leave our first home,” she said, adding that the fees billed will go to utility bills. “It’s moving because we live here on weekdays and the house is furnished and installed for us by us. We are hoping to receive an invitation from Airbnb to receive the $ 5,000 grant. “
Morrow launched a YouTube channel documenting their life on the boat during the coronavirus pandemic. The couple hope that the chain, which now has more than 24,000 subscribers, will help them earn additional income. So far, they’ve made $ 400 from YouTube’s monetization offers. Morrow also applied for unemployment and a small business loan.
Airbnb hosts like Pasquali and her husband Greg are creatively thinking about how to attract people to their rental. The couple converted four years ago an old garage in their backyard in Oakland, California, in an Airbnb cottage for extra income that helps them cover their mortgage and pay for child care. But when the on-site refuge order was placed in the San Francisco Bay area, the guests canceled. “The reality is that we are losing thousands of dollars a month [right now] “, did she say. “It will make things tighter for our family for a while, and it is difficult. ”
She was recently able to rent the chalet for a day-long photo shoot, but was not fortunate enough to get new reservations. With more people working from home, Pasquali suggests other hosts rent properties as temporary offices. She is also considering discounts for people who book a future stay or who can offer gift cards.
However, it can be almost impossible to compensate for all cancellations.
“I imagine people are hesitant to spend money right now and hesitant to book future trips,” said Pasquali. “For us, we’re just going to lose the income. There is no other way for us to catch up. “