As you will no doubt be aware, the recent COVID-19 (Coronavirus) has led to a great deal of disruption and uncertainty all across the world. Our number one priority is of course the health and wellbeing of all of our customers, our team and their families, and our thoughts go out to those affected.
In terms of business, the short-term rental industry has been one of the hardest hit, with guests travelling to and from affected areas cancelling bookings and property managers in many places facing an unpredictable booking season. We know that many property managers are concerned about the medium and long-term impact the present situation may have on their destination, and we’re also hearing reports that some managers are unfortunately being forced to close up their businesses until things even out.
We understand that this is a difficult time for many property managers, owners, hosts and travellers, who are all looking for the latest information on how the Coronavirus affects vacation rentals. We’ve put together a short guide containing some key information vacation rental industry professionals need to be aware of concerning the Coronavirus. We hope this can help provide some clarity and stability at this uncertain time.
We’ve taken every effort to ensure that this information is accurate and up to date, but if you spot any inaccuracies or are aware of additional information please let us know.
Last updated Tuesday 31 March 2020
Coronavirus cancellation policies
Many guests and property managers want to know whether the Coronavirus will affect their upcoming bookings. The short answer is that this greatly depends on the location of the property, the origin of the guest and the channel through which the booking was made.
Your.Rentals refund and cancellations policy
Our first point of call is to start with the cancellation policy the guest agreed to when making the booking. However, force majeure and similar clauses can be activated in a situation like this. Since many of your bookings are via OTAs, then the OTA specific policies may take precedence and need to be followed.
We are doing everything we can to reduce cancellations and to encourage rebookings where possible. We are working closely with our sales channel partners to encourage them not to offer full refunds to guests unless absolutely necessary. Whilst we are making every effort to protect vacation hosts, the final decision on this rests with the sales channel through which the booking was received.
- Airbnb has extended their extenuating circumstances policy worldwide.
- Reservations for stays and Airbnb Experiences made on or before March 14, 2020, with a check-in date between March 14, 2020 and May 31, 2020, are covered by the policy and may be canceled before check-in. Guests who cancel will have a variety of cancellation and refund options, and hosts can cancel without charge or impact to their Superhost status. Airbnb will either refund, or issue travel credit that includes, all service fees for covered cancellations. In order to cancel under the policy, you will be required to attest to the facts of and/or provide supporting documentation for your extenuating circumstance.
- The host’s cancellation policy will apply as usual to reservations made after March 14, 2020. Cancellations submitted before March 14, 2020 will be handled according to the extenuating circumstances coverage in effect at the time of submission
- Airbnb’s Italian Country Manager has released a statement pledging their support for professionals affected by the crisis
- Booking.com issued a statement saying they have declared a Forced Circumstances and expect the partners to refund any prepayment and waive any cancellation costs (fees, expenses and/or other amounts) in situations where the guests/travellers requested cancellations as a result of the Forced Circumstances (FC). Booking.com will waive the commission in these cases.
- As a consequence of the US government’s policies regarding travel from Europe they have declared Force Majeure/Forced Circumstances for:
- All reservations made for properties in the United States by travelers from all 26 Schengen countries *), or travelers who have been in the Schengen area in the past 14 days;
- with a check-in date between Saturday, March 14, 2020 and Tuesday, April 14, 2020 (including).
- American citizens, US permanent legal residents, and their families are excluded from the travel ban.
- HomeAway have updated their Extenuating Circumstances policy as follows:
- “For reservations booked before March 13, with a stay night between March 13 and April 30, there are two possible options:
- Offer the traveler a full credit for the amount they’ve already paid if they are outside of your cancellation window. This credit can be applied to future bookings at your property within the next year (at no additional cost). We understand seasonality may affect your rates. However, we encourage you to be as flexible as possible with affected travelers when arranging a future stay date.
- If the traveler is unable to accept a credit, we strongly encourage you to issue at least a 50% refund. Our intent is to reward property owners and managers who offer flexibility to travelers during this time of uncertainty with additional visibility in traveler searches on our platform. The idea is that the more you do now for travelers, the more we will reward you moving forward (so a 100% credit/refund will count more than 50% refund and so on).”
- In addition, they are also:
- “Refunding the money we make through traveler service fees when someone must cancel a trip due to COVID-19, whether the cancellation is government-mandated or not. This is in effect for all stays booked before March 13 with a night between March 13 and April 30. Travelers don’t have to do anything to collect the refund, it will happen automatically over the next few weeks.”
- Vrbo expands COVID-19 refund policy. Vrbo now offers two options for a return of funds due to the virus. The first choice, which is the default, is that any cancellations can be made for full value credit on the platform, with flexible stay dates, for a rebooking later in time. For those seeking a return of funds, Vrbo mandates that hosts provide a 50 per cent refund on their booking.
- Expedia Group is applying its force majeure cancellation policy to all bookings worldwide with stay dates prior to April 30, 2020 (“Eligible Stay Dates”).
They are automatically refunding travelers who contact them requesting to cancel existing bookings with Eligible Stay Dates. For these cancellations, they are waiving cancellation fees and refunding any pre-payments.
Travelers who cancel certain non-refundable bookings at certain properties will be provided with a voucher to rebook at the same property.
- Bookings due to start before 31 May 2020 will not be subject to a cancellation fee
- If a guest cancels an affected booking, the host will not be paid out
- For bookings on or after 1 June 2020, at this moment in time, your cancellation policy will apply as they continue monitoring travel and government advisories.
- Read more here
Our Customer Support:
We are here to help and support. Please reach out to us at firstname.lastname@example.org for any cancellation or refund issues you may have.
Various travel insurance companies have been adapting their policies. These changes can affect both guests and hosts, and may differ significantly from usual practices.
For example, travel insurance provider Allianz is temporarily allowing travellers to make claims based on the virus. We recommend discussing with your insurance provider and that of your guests to see how this may affect your bookings.
Long-term impact of Coronavirus on tourism and short-term rental industry
Due to the ongoing and evolving nature of the situation, it is of course difficult to predict exactly what is going to happen next. However, we can look to similarities with other crises in the past as well as early trends around the COVID-19 outbreak to assess likely outcomes.
The first thing to keep in mind is that the travel sector is surprisingly resilient. The industry has rebounded from similar incidents in the past and has maintained steady growth throughout the years. Indeed, in many areas the industry is still seeing year-on-year growth compared to this time in 2019, albeit lower than forecast. Whilst this is currently a very challenging time for rental managers in many places, it is unlikely that the present outbreak will drastically alter the ongoing megatrend.
Indeed, some early signs of recovery are already being seen. According to Bloomberg, travel demand is rebounding in China as Coronavirus worries recede. As the situation becomes more controlled, guests are starting to make bookings again, and property managers are feeling the benefit. This echoes the trends seen during the SARS outbreak, wherein hotel occupancy returned to normal approximately three months after the stabilisation of the virus.
A similar pattern is predicted for the other areas affected. Given that the present COVID-19 outbreak reached Europe and North America much later than China, those markets are likely to continue to feel the effects for the next few months at least before a recovery. However, the overall impact will vary greatly depending on the measures taken by each country.
Arguably the major challenge right now for many in the industry is liquidity. Blanket refund policies by certain OTAs and Sales Channels have affected the cash flow for many hosts. Alongside organisations such as the European Holiday Home Association (EHHA), Your.Rentals is advocating hard for a model prioritising rebookings and vouchers. The goal is to encourage guests to rebook their vacations for alternative dates, or accept vouchers towards future bookings with the same host. Whilst this may not be possible for all bookings, it is hoped that this can help support our industry, particularly when it comes to small businesses.
How to adapt your business for the Coronavirus
Many property managers will be looking for ways to ensure their business remains stable and are finding opportunities within the challenge. Given how dynamic and fast-changing the situation is, the key advice for property owners and managers in this critical time is to be flexible. There will be more last-minute decision-making from guests and other parties such as airlines and local authorities, so the ability to adapt will be crucial. Even if you feel that your destination or property is unlikely to be affected it is still important to remain mindful of guests’ concerns and to allow them the flexibility to rearrange their trips if that is required to give them peace of mind.
Your relationship with guests is key. Continue to build trust and loyalty with your upcoming and previous customers by reaching out to them. We recommend proactively advocating the message that private rentals are more private and therefore less risky than hotels, and emphasising any additional cleaning or other precautions you have put in place in order to ease their concerns.
Additionally, if you are a Property Manager, your relationship with owners is also critical. Proactively managing their expectations, and explaining the things that you are doing to ensure you are ready for a recovery in demand will reduce the stress and panic.
We also strongly recommend keeping your listings online. Unlisting and then reactivating later can affect their performance, and may mean that your properties no longer rank as highly when guests are looking to make bookings. In Your.Rentals it is possible to block dates or snooze your calendar for a period of time whilst keeping your listings published on sales channels if you are going to take a break.
You should also adjust your pricing now.
- We recommend setting lower Basic rates until the end of 2020.
- Use our Last Minute discount to provide discounts for those planning travel at short notice (recommend to offer a discount for bookings up to 2 or 3 months before check-in). While summer 2020 in the northern hemisphere is likely to be depressed, our feeling is that guests will be making last minute decisions on summer vacations.
- If you have set Seasonal rates for the summer, you should review those and be prepared to offer lower rates during 2020.
While this may significantly change your earnings, this strategy is to ensure you are at the front of the curve when demand picks up. You can update your pricing as soon as you see a recovery in demand, but remember you are competing for guest nights with others, so you must keep an eye on local competitor pricing.
Many property managers are seeing a reduction in their bookings, but are still being forced to pay high fixed costs on other platforms. Unlike other software providers, we don’t charge any subscription or monthly fees, so you only pay when you receive a booking. By using Your.Rentals to manage your property listings on multiple channels, you can eliminate fixed monthly costs whilst keeping your properties ready for the recovery in demand.
ICO – financing lines for the Tourism sector related to Thomas Cook / COVID-19
Keep up to date with the latest information
Phocuswire has shared their “Roadmap to Recovery” for the hotel industry, much of which is also relevant for vacation rentals.
Industry experts Skift have also created a live feed which is regularly updated with the latest news.
Several local and national governments have announced support measures. Politico has a detailed roundup here. We’ve collected a few links below for various markets:
- Government announces initiative to help the Danish economy
- Denmark notified to the Commission a guarantee scheme of a budget of DKK 1 billion (approx. €130 million) for SMEs affected by the Coronavirus outbreak.
- The European Commission approves €130 million Danish guarantee scheme for SMEs with export activities affected by coronavirus outbreak.
- France urges ‘massive’ eurozone stimulus to counter coronavirus hit
- Entreprises : un plan de sauvetage à 45 milliards pour deux mois
- The French plan is expected to mobilise more than €300 billion of liquidity support for companies affected by the economic impact of the Coronavirus outbreak.
- The European Commission approves €1.2 billion French “Fonds de solidarité” scheme for small enterprises in temporary financial difficulties due to coronavirus outbreak.
- Italy Announces $28 Billion Plan to Cushion Virus-Hit Economy
- “Cura Italia” decree: 25 billion immediately, other measures in April
- Coronavirus, il governo vara il decreto “cura-Italia”. Conte: “Siamo un modello, l’Europa ci segua”
- Italy notified to the Commission a €50 million support scheme for the production and supply of medical devices and personal protection equipment under the Temporary Framework.
- The European Commission approves €20 billion Spanish guarantee schemes for companies and self-employed affected by coronavirus outbreak.
- Germany notified to the Commission two separate support measures under the Temporary Framework, implemented through the German promotional bank Kreditanstalt für Wiederaufbau (“KfW”)
- The European Commission has approved two German State aid schemes to support the German economy in the context of the Coronavirus outbreak.
- The European Commission has approved German direct grant scheme to support companies affected by coronavirus outbreak.