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As people cancel their holiday plans in droves and
demand refunds, hosts say the house-sharing platform has left them stranded
Airbnb landlords feel the pain as the coronavirus
hits tourism
The coronavirus crisis has left Airbnb rushing to
convince its hosts they aren’t expendable.
By MELISSA
HEIKKILÄ 4/8/20, 11:51 AM CET Updated 4/19/20, 6:11 AM CET
Summer is
canceled — at least for the thousands of Airbnb hosts who have seen their
entire year’s income disappear due to the coronavirus crisis.
As people
cancel their holiday plans in droves and demand refunds, hosts say the
house-sharing platform has left them stranded, and responsible for covering
cancellation costs.
“We have
people threaten us, saying they hope the pandemic affects our family ... At the
moment, Airbnb has put all the pressure on the host. We try to refund guests
when we can, but it's overwhelming,” said Joanna Andersson, who manages two old
hotels in West London that her employer has converted into 40 studio flats.
Andersson
is one of thousands of Airbnb hosts who rely on the platform as a crucial
source of income and say it has a duty to help them through the crisis.
But Airbnb,
which Europe's top court has defined as an internet service company, offers
limited help for cancellations and has reserved extra aid to its top-rated
hosts who rent out their primary or secondary residences.
The
platform’s status as an “information society service” allows Airbnb to operate
with more regulatory freedom across the European single market.
That's not
good enough for the thousands of hosts who rent out more than two properties
and argue that the bounty of supply they offer is a key reason for Airbnb's
global success.
It also
underscores the risks taken on by people who invest heavily in platform
services, only to discover when a crisis hits that there is no safety net.
"Right now it's everyone to fend for
themselves," said Andersson.
Cancellation
nation
When the
coronavirus crisis hit, Airbnb said that guests would be able to receive full
refunds for trips between March 14 and April 14.
The policy
overrode any cancellation policies hosts may have had, which Andersson said
prompted a flood of messages from people wanting to cancel and asking for their
money back for dates outside the window Airbnb has provided — which has now been
extended to May.
Some hosts
say that Airbnb's decision to impose such a policy without discussing with them
first shows so much disregard to hosts, they are threatening to leave the
platform entirely.
"If I
have the possibility to switch, I would prefer to use Expedia and Booking,”
said John, who rents out several holiday apartments in the Belgian countryside.
At the end
of March, Airbnb announced it would reserve $250 million to help hosts cover
cancellation fees by paying a quarter of what they would have received normally
through their cancellation policies.
In a letter
to hosts, Airbnb CEO Brian Chesky apologized for the way the company had first
announced their cancellation policy, saying the approach was chosen for health
and safety reasons.
Airbnb also
promised $10 million extra funding for its “superhosts,” or people with
higher-than average ratings and a one-percent cancellation rate.
But this
extra money applies only to hosts who rent out their primary residence or
secondary home, those with no more than two listings and those who “demonstrate
the most need" — excluding people like John or Andersson's employer who
rent out multiple properties.
In an
attempt to stay afloat, Airbnb’s competitors, such as Booking.com and Expedia,
have called on the European Union to include them in any bailouts for the
tourism sector.
But Airbnb
defines itself as an internet company, a label reaffirmed by a 2019 ruling by
the Court of Justice of the European Union.
The
platform’s status as an “information society service” allows Airbnb to operate
with more regulatory freedom across the European single market. As an online
platform, Airbnb’s role is to work as an intermediary between hosts and guests.
Professional
hosts disagree.
When the
coronavirus crisis hit, Airbnb said that guests would be able to receive full
refunds for trips between March 14 and April 14. | John MacDougall/AFP via
Getty Images
This group,
who run their house-sharing schemes like small businesses, argue that Airbnb
has a financial responsibility toward them because of the sheer number of
properties they provide the company.
“Airbnb
could have been more prepared without putting hosts into such a position.
Without hosts, Airbnb will not survive,” said Toni, who has two central London
apartments listed on the site.
Return to
long-term rental
Toni does
not own the apartments, but rents them from someone else, and then sublets them
to tourists through Airbnb. These types of scheme are becoming increasingly
popular in the sharing economy. Uber drivers are another example, often leasing
out fancier cars in order to meet the platform's entry standards.
Hosts are
calling for better insurance, or at least a better opportunity to negotiate
with guests about postponing travel dates and sharing the cost of
cancellations.
Airbnb has
promised trip insurance for hosts and guests, “programs to deliver demand to
help rebuild your business," and is setting up a fund that allows former
guests to send donations to hosts.
But such
measures may not be enough to ensure the loyalty of professional hosts, who are
facing serious financial pain, with mortgage and rent payments often
conditioned on bookings that have now disappeared.
In the
first three weeks of March, prior to the U.K.’s strict coronavirus lockdown,
British real estate site Rightmove saw a 45 percent increase in listings in
central London.
Rightmove’s
Housing Market Analyst Miles Shipside says this is “likely, as landlords who
normally rent out their properties as holiday homes look to find another income
route by offering [them] to long-term tenants instead.”
An Airbnb
spokesperson said the company’s data shows that there are as many listings
available on the Airbnb platform as there were prior to the pandemic.
That might
well change as the pandemic wrings hosts dry.
“If I can’t
pay my rent, my landlord can’t pay their mortgage,” said Toni.
During an
average year, Toni expects to make a profit of between £12,000 and £15,000
after tax. Usually at this stage of the year, her apartments would be half full
until the end of December.
“If things
don’t change by June, I might give up,” said Toni.
Hasn't Booking.com had enough gifts from the
State ? The world's largest travel site relies on government support. This
undermines solidarity among taxpayers.
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Esta situação é absolutamente escandalosa na perpectiva
do contribuinte. A Booking, através da sua actividade só contribuiu para uma
espiral especulativa do Imobiliário e da crise da habitação para os habitantes
locais. O Municipal de Amsterdão há muito tempo que luta contra a Booking e a
Airbnb que fogem a impostos e que não disponibilizam dados e informação afim de
poderem ser fiscalizados. Isto, enquanto usufruíram de vantagens fiscais
escandalosas e, por exemplo, no tempo das vacas gordas investiram 14 bilhões de
dólares em ‘buybacks’ ou seja compra especulativa das próprias acções afim de
levantar o valor das mesmas.Portanto durante anos não tiveram em conta o
‘sistema’ dentro do princípio selvagem do Neo-Liberalismo, mas agora, vêm pedir
ajuda ao Estado, ou seja , ao dinheiro do contribuinte. Leiam o artigo do
Volkskrant ( 17-4-20200 ), em baixo traduzido em Inglês. Agora, estes campeões
da ‘treta’ e da mentira da ‘economia de partilha’, vêm pedir apoio ao Estado, ou seja ao
dinheiro dos contribuintes para poderem salvar-se e sustentar as legiões de
‘ex-pats’ que trabalham para eles !?!...
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OVOODOCORVO
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ANALYSIS CONTROVERSIAL STATE AID
Hasn't Booking.com had enough gifts from Vadertje
Staat?
The world's largest travel site relies on government
support. This undermines solidarity among taxpayers.
Jonathan Witteman16 april 2020, 22:29
'Be quick, only 3 support packages available! 15
multinationals are currently looking at this offer,' one Twitter user parodied
Booking.com's infamous lure son on Wednesday evening, after the company
announced it was requesting emergency support from the Dutch state. The world's
largest travel site is suffering from the corona crisis – 85 percent of
bookings have been wiped out, ceo
Glenn Fogel told his staff – that
the until recently multibillion-dollar multinational wants to make use of the
Dutch NOW scheme. Through that scheme, designed to prevent redundancies,
taxpayers will pay up to 90% of the wages from companies threatened with
toppling.
And that is wriggling, because Booking.com has already
received billions of euros from the taxpayer in recent years. For example,
through the so-called 30% scheme, which means that the many expats in amsterdam
Booking.com offices do not have to pay tax on 30% of their income over 30% of
their income in the first five years. That's small beer compared to the 1.8
billion euros saved Booking.com according to research by business magazine
Quote between 2010 and 2018 thanks to the'InnovationBox', a tax bill with which
the government wants to stimulate innovation. This EUR 1.8 billion, according
to critics a glorified form of tax avoidance, is equivalent to roughly seven
annual salaries for all 5500
Bookingemployees inthe Netherlands, whose average income is 47 thousand
euros.
150 million euros in unpaid VAT
Unintended tax gifts were also available, in the eyes
of foreign tax authorities at least:
between 2012 and 2016 alone, Booking.com managed to save 715 million euros in
income tax by funneling the profits booked elsewhere in Europe to the
Netherlands, the AD reported two years ago. France imposed Booking.com a (now
paid) after-tax of EUR 356 million, while Turkey and Italy also say they have
lost tens of millions of euros in taxpayers' money. On top of that, Italian
prosecutors launched an investigation last year against Booking.com in
connection with at least EUR 150 million in potentially unpaid VAT.
State aid to Booking.com is all the more so because it
owes the problems partly to itself. Year after Booking year, Booking Holdings, Booking.com's U.S.
parent company, made multibillion-dollar profits – nearly $5 billion in 2019.
Still, the company entered the corona crisis with more debt than cash. That's
not least due to the $14 billion Booking Holdings spent since 2018 buying
their own shares – the controversial stock
buybacks that allow companies to
jack up the price of their shares, as well as their stock-paid bonuses.
Missed opportunity
It is a missed opportunity that the Dutch government
has not set conditions on the NOW scheme, except for a 20 percent loss of
turnover. For example, theTrumpadministration- which Booking.com can still
knock on the door, prohibits emergency loan recipients up to a year after the
loan is repaid to buy back their own shares.
The Ministry of Social Affairs says it has no grounds
to refuse Booking's request. "It is
a generic scheme, which applies to all companies that are in trouble,"
says a spokesman. The UWV already has 92 thousand applications, and if
companies have to comply with too many rules, it takes too long for the money
to reach them, the ministry argues. In addition, the scheme serves to protect
employees, most of whom cannot do much to their employer's financial union.
At the same time, state aid to Booking.com undermines
the solidarity of taxpayers, especially as the company has so far shown little
solidarity with corona-damaged hotel owners. Saving KLM is already a great and
controversial sacrifice, but how indispensable for the Dutch economy is
Booking.com? In the end, Booking.com is little more than a pass-through between
holidaymakers and the operators of hotels and b&b’s, albeit against an
average of 15 percent commission. In a world without Booking.com, people
probably won't be learning to go on holiday.
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