Vacation rental cancellations during coronavirus pandemic

ATLANTA - The Vacation Home Rental Industry is big business, with a growing part of the vacation market ditching the traditional hotel/motel experience. Instead, many choose a fully furnished home or apartment with maybe several bedrooms, of course, a bath or two, but usually including a full kitchen.

Last year, the online vacation rental market accounted for about 29% of all vacation rental market share.

It’s more personal and private than a hotel, and sometimes it’s even less expensive! So it’s not surprising that web sites that help owners to advertise their homes as short term vacation rentals have sprung up like weeds.

There are four big players in the vacation & short term rental market:  AirBnB, Booking.com, VRBO, and TripAdvisor, in that order.  

There are a million smaller sites, but these four seem to dominate the business, at least in the USA.  The big sites have taken very different paths in their CoVid-19 refund policies.

As a result of the COVID-19 pandemic, Airbnb and Tripadvisor are allowing guests to cancel their stays for a full refund.  As I can attest from personal experience, this policy causes great resentment among vacation rental owners and property managers who need the revenue to pay mortgages, taxes, insurance and maintenance and still be able to survive. 

Airbnb states it is providing full cash refunds, including fees paid to Airbnb, while Tripadvisor states that travelers will not be charged fees, and will get a full refund, which turns out to be cash also.

We operated several vacation rental homes on St. Simons Island for over ten straight years, and MOST of those were one-week rentals as a result of a listing on VRBO.  

My rental agreement specifically stated that there were no refunds within 120 days of the occupancy date, and that, if the LOCAL GOVERNMENT declared an evacuation (like for a hurricane), the parties would work together, in good faith, to find a suitable replacement vacation period. No refunds. This agreement was ALWAYS signed by me and the guest well in advance of the rental date and BEFORE money was exchanged.

In contrast to the first two sites, VRBO and Booking.com simply refer fearful guests to the property manager or vacation rental owner to see if they’ll charge a cancellation fee, provide a full or partial refund, or merely issue a credit toward a future stay. 

Vrbo’s COVID-19 Emergency Policy tells owners what they should do: 

"If the booking is for stay dates up to and including June 30, offer a credit for full value and flexible stay dates within the next year to travelers who can’t take trips now due to COVID-19." If that doesn't work, they "encourage" owners to offer a refund of at least 50%.

Booking.com says to vacationers:

“Due to the current situation related to the coronavirus and the health concerns surrounding it, we understand if you want to change your travel plans. Sign in to get help with managing your travel based on regional travel restrictions.” 

Translation into plain English: Unless the local authorities are banning travel during the time of your planned trip, we can't help you.

If I, as a vacation guest, was forced by VRBO or Booking.com policies to lose my vacation and all my money, I would never use them again.

On the other hand, if I, as a property owner, was forced by Airbnb or Tripadvisor to allow guests to cancel their stays for a full refund, I would move all my listings to VRBO or Booking.com and never again use Airbnb or Tripadvisor.

As a final thought, most of those who purchased trip insurance are NOT able to collect from their insurer as a result of the pandemic, with a few narrow exceptions.  These policies typically name exactly what IS covered, and usually contain a long list of what IS NOT covered. But that list maybe 20 pages into the policy in extremely fine print.

The bottom line here is that the owner and the guest should agree, upfront and in writing, what the policy will be if a guest requests a cancellation.  

THE BOTTOM LINE: A smart owner will work with a guest, in good faith, to find a replacement date that can be used by the guest.  And a smart guest should realize that written agreements are important, and work with the owner to find a reasonable resolution.