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07/04/2020

OTA Refund and Cancellation Policies

Online travel agencies (OTAs) have changed their policies constantly over the last few weeks. They have also introduced some tools and programs to make it easy for guests to cancel and also for property owners and managers to give a refund (more or less voluntarily, depending on the cases).

 

Airbnb

Airbnb had made it very easy for guests to cancel most of the reservations made prior to March 14.

Airbnb has now made it harder for guests to invoke COVID-19 related fears to get their stay cancelled and refunded. For new reservations, Airbnb has changed its tack: Much like Vrbo, Airbnb is now enforcing the existing host cancellation policy for bookings made after March 14.

Note that since March 27th, Airbnb has stopped sending advanced payouts to hosts under its Super Strict policies.

Airbnb has now extended its extenuating circumstances policy to pre-March 14 bookings that check-in before May 31 (this was previously April 14).

Guests can now choose to get a travel credit instead of getting the normal host refund.

The host will now get 25% of the cancellation fee, which is 12.5% of the reservation amount (when the standard cancellation policy is strict).

Summary of Airbnb’s new policies:

  1. For reservations made on or before March 14, 2020, worldwide, with a check-in date between March 14th and May 31st: Extenuating Circumstances Activated Worldwide
  • Reservations may be cancelled before check-in.
  • Guests who cancel will receive either a 100% Airbnb travel credit or whatever refund the host’s policy had in place porior to the outbreak.
  • Hosts can cancel without charge or impact to their Superhost status,
  • Airbnb will refund all service fees.
  1. For reservations worldwide for stays made on or before March 14th, with a check-in date after May 31st: No Extenuating Circumstances
  • These reservations are not covered under Airbnb’s extenuating circumstances policy, except where the guest or host has contracted COVID-19.
  • The host’s cancellation policy will apply as usual. It makes the bookings more secure for the host and harder to cancel for the guests.
  1. For new reservations made after March 14th
  • These reservations are not covered either under Airbnb’s extenuating circumstances policy, except where the guest or host has contracted COVID-19.
  • The host’s cancellation policy will apply as usual. The host’s cancellation policy will apply as usual. It makes the bookings more secure for the host and harder to cancel for the guests.
  • Guests are warned about this change on the Airbnb website when they book a property.
  1. Airbnb’s “More Flexible Reservations” programs and tools for reservations made until June 1st
  • Airbnb enables guests to ask the host for a voluntary refund, with automatic decline if no answer.
  • So, Airbnb is upholding hosts cancellation policy, but makes it easy for guests to ask for a refund, without involving the Airbnb case managers. As a host, you are free to either accept or refuse.
  • Airbnb waives its standard 3% host fee from hosts if the reservation does cancel, Airbnb will entirely refund the guest fee to the guest (and not keep it or turn it into a travel credit).
  1. Cancellation Policies: for Super Strict 30 And Super Strict 60, no more advanced payout. No new listing can opt for these policies.
  • On March 26th, Airbnb made its “Super Strict” cancellation policies (cancellations at 30 and 60 days) less appealing:
  • Hosts will not receive their payout at the end of the free cancellation period anymore, but rather on the day of check-in. It can mean that Airbnb holds on to cash for up to 2 months, instead of passing it on to hosts. Clearly, this is to the detriment of the cash position of hosts who were the most likely to use these cancellation policies.
  • Airbnb has made it impossible for new hosts to choose these policies: If you had them turned on, you keep them. If not, you cannot use them. This is a move by Airbnb to have more flexible policies for guests and to prevent hosts from protecting themselves.

Chick here for up to date information on Airbnb’s cancellation policies.

Vrbo / HomeAway

Since the beginning of the coronavirus COVID-19 crisis, Vrbo / HomeAway has enforced the existing cancellation policies of property managers and owners. As a consequence, on the guest side, travelers are wondering why they did not get full refunds like from Airbnb. See more here.

However, Vrbo has stopped making advanced payouts when guests have already sent out the money to Vrbo / HomeAway. Instead, owners will only receive payouts on the check-in day. It means a less favourable cash flow position for the owner and a better one for Vrbo.

  1. Enforcing Vrbo partner policy, but enabling and rewarding voluntary refund to guests:
  • If you have listings on one of Vrbo family websites, you may have received messages from your guests asking you for a voluntary refund. The decision is up to you, as Vrbo enforced your pre-existing cancellation policy.
  • However, Vrbo has made it easy for guests to ask for a refund and for you to act on it, which certainly removes this type of request from their customer service.
  • Vrbo states that COVID 19-related cancellations will impact neither your property search ranking metrics nor your Premier Partner status.
  1. Vrbo rewards you if you let guests cancel bookings made prior to March 13th. On March 18th, Vrbo launched a program to make it easier for guests to cancel bookings made prior to March 13 and staying between March 13 and April 30. It is not mandatory, but Vrbo asked partners to handle these cancellations in one of two ways (even if those trips are outside of the set cancellation policy):
  • Option 1 (Default): Offer a credit for full value and flexible stay dates within the next year (at no additional cost) to guests who can’t take trips now due to COVID-19.
  • Option 2: If the guest is unwilling to accept a credit, we advise partners to issue them a refund. If partners are unable to accommodate a full refund, HomeAway expects partners to provide at least a 50% refund if the guest cancels during this time.

In return, Vrbo / HomeAway will give these listings:

  • They will reward them with additional visibility in guest searches. The more partners do now for guests, the more they will be rewarded moving forward (so a 100% credit/refund will count more than 50% refund).
  • Partners who do not abide by these standards (offering a 100% credit/refund of at least a 50%) will be disadvantaged.

Booking.com

Booking.com’s refund and cancellation policies are captured under what they call their “Forced Circumstances (FC) / Force Majeure policy “. Unlike Airbnb and Vrbo, who decided to roll out the same policy across the world, Booking.com has taken a more case by case approach. Guests can cancel bookings depending on their country of destination or provenance. It also depends on the check-in date for their stays.

On April 3rd, Booking.com announced a change in policy: for all new reservations made after 6th April, they will no longer apply Force Majeure conditions for guests seeking to cancel or modify their booking due to the current COVID-19 outbreak. These reservations will be treated like any standard booking, according to standard policies and procedures.

  1. For reservations made on or after 6th April:
  • The COVID-19 Force Majeure procedures do not apply.
  • com’s standard procedures apply, including relating to Non-Refundable and Partially Refundable reservations. As such, you will be in control of whether, when and how to refund COVID-19-related guest cancellations for reservations made on or after 6 April 2020, based on the policy chosen by your guest, your individual, legal and governmental situation and mandatory consumer law.
  • As the COVID-19 situation evolves constantly, Booking.com reserves the right to reinstate their contractual Force Majeure policy.
  • Operators remain responsible for making sure their availability on Booking’s platform is up-to-date, including when government restrictions mean your property must be closed. Should a guest book a room that is in fact not available, the guest must be given a full refund unless they agree to a different solution.
  1. For active reservations made before 6th April 2020, regardless of future check-in date:
  • com’s Force Majeure procedures still apply. For more information about these procedures, please visit our Partner Hub.
  • Anticipating that more governments around the world will implement binding regulations that restrict the movement of people, Booking.com’s Force Majeure procedures will apply as normal to any reservations made before 6 April 2020 for any future check-in date where government travel restrictions make it impossible, illegal or prevent guests from traveling to or staying at the accommodation they have booked.
  1. Bookings from 6th April 2020:
  • By now, Booking.com expect that guests are aware of the risk of further COVID-19 spread, and as such the risk they are taking when making new reservations, particularly Non-Refundable and Partially Refundable bookings. Therefore, for all new reservations made as of 6th April 2020, Booking.com will no longer apply Force Majeure conditions for guests seeking to cancel or modify their booking due to the current COVID-19 outbreak. These reservations will be treated like any standard booking, according to our policies and procedures.
  • Booking,com will also be offering three options for guests with bookings within the forced majeure dates:

For reservations under FM partners are expected to respect the inability of guests to stay as intended. We ask that operators, to the satisfaction of the guest, arrange:

  1. new dates for a future stay through com(different rates may apply), or
  2. a locally issued voucher for a future stay, for the value paid by the guest or a higher amount at your discretion, or
  • a full refund of any prepayment/deposit.
    In cases where the reservation is cancelled all commission will be waived.

All updates are added to the Partner Help page.

We will continue to keep you updated.

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