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Airbnb Guests Are at the Mercy of Hosts for Hurricane Refunds

Airbnb Guests Are at the Mercy of Hosts for Hurricane Refunds

(Bloomberg) -- Airbnb Inc. guests in the path of Hurricane Ian are relying on the generosity of hosts for refunds since the short-term rental company’s cancellation policy specifically excludes Florida’s storm season.

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Ian, which struck Florida on Wednesday as a category 4 hurricane, dumped as much as a foot of rain onto some cities in the state, leaving about 2.6 million homes and business without power amid downed trees and inundated roadways. The storm is one of the costliest and most powerful in US history, with estimates of possible damage in the tens of billions of dollars.

Florida, with its theme parks and hundreds miles of pristine beaches on Atlantic and Gulf coasts, is one of the most-visited states by foreign and domestic tourists. That makes the Sunshine State a popular destination for Airbnb guests too, with six cities among the top 10 trending summer domestic destinations this year, including Fort Myers and Cape Coral, both of which were in the eye of the storm.

The state is also all too familiar with hurricanes, and gets hit almost twice as much as the next most hurricane-prone state of Texas, according to Universal Property, a casualty insurance company. That’s why Airbnb’s extenuating circumstances policies for cancellations and refunds covers some natural disasters, but not “weather or natural conditions that are common enough to be foreseeable in that location,” and specifically cites Florida’s hurricane season among the exceptions. Expedia Group Inc.’s platform Vrbo also won’t cover natural disasters or events beyond a home owner’s control.

Read more about Hurricane Ian’s resumed strength as its storm path heads out over the ocean

The Fort Myers area on the Gulf Coast, which took a direct hit from Ian, has roughly 2,800 active short-term rentals across Airbnb and Vrbo, according to industry data tracker AirDNA. Given its waterfront real estate, 97% of all listings are full-home vacation rentals.

Bret Tracy, a 48-year-old sales director from South Carolina, has a town home in Tampa, about a two-hours drive north of Fort Myers, which he rents on Airbnb when he’s not staying there. Tracy was set to have a guest stay in his home during a local convention, which was subsequently canceled and Tampa was put under an evacuation order. Under Tracy’s normal refund policy, the guest would have only been eligible for a half-refund, but he granted a full one.

“In this situation, understanding the magnitude of it, we just said if you initiate it on your side we’ll grant you a full refund,” he said. “I don’t want to put anyone in harm’s way.”

The arrival of Hurricane Ian is another example of the delicate balance that home-sharing companies try to strike between hosts, about half of whom make a living by renting out their properties, and guests, who often must pay upfront. During the early days of the pandemic, Airbnb came under fire from guests who were refused refunds as the onus was put on hosts to be accommodating. Airbnb then rolled back that policy, allowing guests full refunds, sparking the ire of hosts who were facing empty calendars and looming mortgage payments. Over the past few years, Airbnb has tried to appease both sides, by adding AirCover, which regulates cancellation policies, listing inaccuracies and other troubles, for both parties.

While the extenuating circumstances policy excludes the hurricanes, Airbnb says guests can filter their searches for homes with flexible cancellation policies that offer full refunds as well as purchase travel insurance. The company is also allowing hosts to cancel reservations without penalty.

For many hosts in an Airbnb Facebook group, the question of whether to refund a guest during a hurricane was a no-brainer. A post asking about whether other hosts gave refunds drew more than 240 comments from sympathetic home-owners. “We fully refunded our guest,” Mary Singleton commented on the site. “We had to ask them to leave because the area was under mandatory evacuation, so we could prepare the house for the storm. This is a major hurricane and we didn’t think twice about refunding.”

Another host named Brian Wilson said he tends to be “a fairly cutthroat business person. But the day I sacrifice my morals for money is the day I’m walking away. It’s an emergency.”

Other hosts recalled issuing refunds during past natural disasters, including Hurricane Agatha in Mexico in May, or during wildfires in other states.

Some guests, however, haven’t been as lucky to have such accommodating hosts. Rebecca Lopez, a 38-year-old administrative assistant from Tannersville, Pennsylvania, was supposed to travel from Philadelphia to Orlando on Thursday for a family event, but her flight was canceled. Lopez had rented an Airbnb for $600 for the trip, but the property manager and owner refused to refund her money, telling her to contact Airbnb instead.

“They’re each pointing the finger at one another and each refusing to help me,” Lopez said. “I have not had an issue before. I’m so shocked this is happening considering the extenuating circumstances of it.”

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