by US Technology Reporter and Margi Murphy, The Telegraph, April 1, 2020
Airbnb will pay $250m (£201m) to landlords for two and a half months of reservations that have been cancelled due to coronavirus.
Brian Chesky, the company's chief executive, said hosts would receive 25pc of their normal cancellation fee for stays booked between March 14 and May 31, if the booking was made on or before March 14.
It comes after the company provoked a backlash from hosts for fully refunding guests who cancelled bookings because of coronavirus.
Hosts had been complaining that they would be left out of pocket because guests decided not to stay, leaving them struggling to pay mortgages and other bills.
"We have heard from you and we know we could have been better partners," Chesky wrote in an email to hosts on Monday. "What you need are actions from us to help, not just words."
Airbnb and other sharing economy companies like Uber have seen business plummet during the outbreak because of hygiene and contamination fears along with government mandated travel restrictions.
Long term rental markets are becoming flooded with properties previously advertised on Airbnb as tourism wanes.
Airbnb has suspended all marketing, which will save it $800m this year. The company's co-founders will not take a salary, while executives take a 50pc cut..
It has been in talks with the banks to extend an existing $1bn financing as it rides out the slowdown, it also reported. Airbnb had pledged to list its shares on the public market this year.
The company was profitable in both 2017 and 2018, however costs ate into its margin in the first few months of 2019, a red flag long before Covid-19 put a halt to rentals. Its overheads included investments in automation and staff to help review is 1.9 million properties, including revamping safety standards after a deadly shooting at a “party house”.
This article was written by US Technology Reporter and Margi Murphy from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
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