Hotels vs. Airbnb: Has COVID-19 disrupted the disrupter?

By Elaine Glusac
Airbnb, born in 2008, famously disrupted the resort trade. It stole market share, put strain on resort charges, impressed the creation of inexpensive manufacturers and noticed inns throughout the spectrum create eating places, bars and lobbies that channeled the native vibe. Airbnb’s latest layoff of 1 / 4 of its workforce signifies the monetary pressure the firm is below. Now the query is: Has COVID-19 disrupted the disrupter?

“I do think hotels may have a near-term advantage,” mentioned Henry Harteveldt, a lodging trade analyst and the founding father of Atmosphere Research Group, predicting that inns can have the edge on hygiene and standardized social distancing insurance policies.

As the trade seeks to get well, the contest between inns and residential shares finds each struggling to persuade the public that their rooms are virus-free, their phrases are truthful and their choices are social distancing-appropriate.

Nonstandardized Terms

The tidal wave of cancellations that got here together with COVID-19 immediately made vacationers conscious of the big selection of phrases in bookings — from no-penalty, last-minute cancellations to full legal responsibility even months upfront of a visit.

Most inns have beneficiant cancellation insurance policies that enable vacationers to make adjustments to their reservations with out penalty 24 to 48 hours upfront of arrival.

The exception is for pay as you go, nonrefundable resort charges, which are typically the lowest — an excellent deal until it’s important to cancel. But even in these circumstances, most main resort corporations, together with Marriott, Hilton and Hyatt, got here via, providing refunds on nonrefundable charges in spring. Some prolonged the grace interval to the finish of June.

Given the public well being and financial crises, “job No. 1 for travel brand managers is to be kind,” mentioned Chekitan Dev, a advertising and administration communication professor in the resort college at Cornell University, who believes the trade’s restoration begins with being as lenient as attainable with refunds and offering extra incentives to guide, equivalent to including upgrades.

Vacation dwelling renters particularly realized the significance of studying the wonderful print, which it turned out was something however customary.

In December, Jessica Bradford, a South Pasadena, California-based publicist, booked a four-bedroom dwelling in southern Maine on Airbnb for every week with pals in July. In late April, after the state of Maine issued plans to require all arrivals to self-quarantine for 14 days via August, she tried to cancel the reservation and realized the cancellation coverage on the $7,000-a-week property coated solely the first 48 hours after reserving. Thereafter, the coverage allowed 50% again if canceled every week or extra earlier than the reservation date.

“It’s on me for not looking, but the cancellation policy is draconian,” mentioned Bradford, who continues to be attempting to get the deposit of about $3,500 again.

Airbnb declined to remark immediately on leases in Maine however pointed to the firm’s extension of its extenuating circumstances coverage that gives refunds on bookings made earlier than March 14 via June 15, the third time it has prolonged the grace interval. Because her reservation is for July, Bradford is left hoping the coverage is prolonged once more.

The episode underscores the variability of dwelling rental phrases. In Airbnb’s case, hosts have the choice to decide on their very own cancellation coverage, which ranges from “flexible,” or as much as 24 hours earlier than check-in, to “strict,” which is what Bradford skilled. Airbnb, which mentioned over 60% of hosts provide versatile or reasonably versatile cancellation insurance policies, is introducing a search filter to assist vacationers discover listings with versatile phrases.

The winner on cancellation phrases: inns.

The Fight for Refunds

Among trip rental corporations, Airbnb took the aspect of its friends when it got here to cancellations for bookings made earlier than March 14, directing homeowners to challenge refunds even when they have been in the penalty window. (What vacationers cheered, some hosts jeered, prompting Airbnb to arrange a $250 million fund to partially compensate these affected hosts, a few of whom have launched their very own direct reserving websites.)

Vacation rental firm VRBO did the reverse, urging owners to make 50% refunds or enable friends to postpone for as much as a yr however in the end staying out of disputes.

For her bachelorette get together, Ashley Gordon, an occasion planner based mostly in New York, alongside along with her sister and a number of other pals, rented a home in Scottsdale, Arizona, for April 2 to five. In February, they put down $3,100 on the $5,700 charge. On March 11, fearful about touring throughout a pandemic, they reached out to the proprietor to cancel. Messages again from the house owner, shared by Gordon, insisted on the contract phrases requiring a 30-day advance discover, which might make them answerable for the extra $2,600 fee.

“When the airlines offer refunds, we will consider doing the same,” the proprietor wrote. “Until such time, you and I have a contract, again, the one you agreed to via VRBO when you booked.”

Finding the proprietor intractable, Gordon persevered and mentioned she satisfied a VRBO customer support consultant to name the proprietor (she mentioned VRBO instructed her solely the proprietor may make the cancellation or change the phrases). The proprietor allowed them to vary their dates inside the subsequent 12 months and canceled the second $2,600 fee. But based mostly on hostile exchanges with the proprietor and the uncertainty about the pandemic, she doesn’t intend to rebook.

“VRBO is deflecting responsibility and pitting homeowners against renters which I find appalling,” she wrote in an electronic mail. “Customers will not forget how they were treated, and I will be exclusively using Airbnb going forward. At a bare minimum, a 50% mandated refund is fair to both the renter and owner. We did not even receive our cleaning fee back for a property we did not stay in. I understand this is a terrible time for everyone (homeowners included), but VRBO had an opportunity to do the right thing, and instead they chose to absolve themselves of all responsibility.”

VRBO didn’t reply to requests for remark.

The winner: Hotels have the edge in the case of refund insurance policies.

The Case for Hygiene

When journey is extensively permitted, assuming that’s earlier than a vaccine or treatment for COVID-19 is discovered, each place providing in a single day lodging — from RVs and yachts to inns and rental houses — goes to must win again the confidence of vacationers and encourage them to step exterior of their zones of management. One method to do this: Promise you’ll clear like a hospital.

“Cleanliness and hygiene will be the new five-star restaurant or 800-thread-count sheets,” Harteveldt mentioned. “Branded or well-run independent hotels may have a compelling advantage over home sharing because hotels are going to use professional or industrial-grade cleaning products. Their housekeeping staffs will be trained to clean to standards set by hotels. And hotels will have marketing budgets to promote this.”

Already, many resort corporations are popping out with new cleansing requirements impressed by these set by the Centers for Disease Control and Prevention. Marriott’s contains utilizing electrostatic spraying know-how to unfold disinfectants that broadly kill germs in rooms. Working with the Mayo Clinic and the makers of Lysol, Hilton plans to launch a brand new room seal in June that signifies nobody has entered the room because it was cleaned and place disinfecting wipes at high-touch areas like elevators.

The American Hotel & Lodging Association, a commerce group, has issued new “Stay Safe” pointers for its members, together with enhanced cleansing practices with germ-killing chemical compounds and social distancing practices like marking the place friends ought to area themselves aside whereas ready at the entrance desk.

Vacation rental corporations, too, are championing new cleansing protocols. Airbnb’s new requirements, launched this month, comply with CDC pointers, together with utilizing masks and gloves when cleansing and constructing in a 24-hour ready interval between friends. Hosts who comply with them will likely be recognized in Airbnb listings.

Vacation rental administration corporations that make use of skilled cleansing crews are additionally asserting enhanced procedures. Based in Austin, Texas, TurnKey Vacation Rentals, which manages greater than 5,000 houses in the United States, schedules its housekeeping crews via an app that maintains customized cleansing checklists for every dwelling and requires them to confirm their work with images.

So, who comes out forward? While inns may need the edge in the case of state-of-the-art cleansing strategies, the shared area endemic to inns, equivalent to elevators and lobbies, would possibly give many vacationers pause. “There may be some people who feel a home-share property is better for them from a health standpoint,” Harteveldt mentioned. “Hotels don’t have this battle in the bag.”

The winner on hygiene: It’s a draw.

The Promise of Privacy

In the age of social distancing, dwelling leases are leaning on their promise of privateness.

“The vacation rental industry is positioning as social distancing-friendly,” mentioned Joseph DiTomaso, co-founder and chief government of AllTheRooms, a trip rental search engine. “A lot of renters don’t even meet the owner. You get a security code instead.”

AllTheRooms Analytics, the knowledge evaluation division of the firm, discovered that the fastest-growing areas for short-term leases from mid-February to the finish of March have been small cities like Concan, Texas; Geyserville, California; and Bridgehampton, New York.

“This data shows that people are fleeing urban cities in favor of hideouts in hamlets, smaller cities or waterfront towns. The spread of coronavirus has essentially caused urban flight to small, rural STR markets,” in response to the report (STR refers to short-term leases).

Portland, Oregon-based Vacasa, which manages 26,000 leases globally, mentioned its most up-to-date bookings common six days, versus the norm of three, and that a few of its greatest progress areas have been in distant places.

Denser by design, inns must work tougher on integrating social distancing necessities. Luxury inns are speaking about suspending turndown. Marriott friends will wheel their very own room service cart into their rooms. Expect to see inns take their cues from extremely automated resort ideas like Yotel, an inexpensive model that has a number of places, together with New York City, the place friends verify in at a foyer terminal that dispenses a key card, and a robotic will retailer your baggage.

“The contactless hotel stay may be considered the new luxury,” Harteveldt mentioned.

That additionally implies that a few of the facilities that distinguish inns and infrequently draw native followings — together with full of life bars, celebrated eating places, rooftop swimming pools — could also be lots much less convivial for the time being.

The winner on privateness: dwelling sharing.

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