At the April Meeting, a representative from Airbnb discussed a new experimental cancellation policy.  It is modeled on the one that now exists in Italy.  As has been explained about the Italian model, this is how it works:

• Each cancellation policy will have a grace period, i.e. a set period of time before a reservation when a guest can always cancel and receive a full refund.
• The Moderate and Strict policies (less favorable to the guests), will be accompanied by an increase in host service fees, from 3% to respectively 4% and 5% to keep into account the extra protection from cancellations.
• Guests who cancel pre-trip will not be charged the guest service fees, making cancellations truly 100% refundable.

Airbnb has just recently imposed this new policy on a limited group of San Francisco hosts.  If successful, we can expect it to apply to ALL San Francisco hosts.

According to the Airbnb rep, the decision for the change was based on complaints from guests who canceled, did not get a full refund, but discovered later that the host had managed to rebook the cancelled dates. This created the argument that the host got over 100% of the rent in total, while the guest was left out of pocket. The new policy increases the cost to the host for choosing a Strict Cancellation Policy by raising the Host Service Fee.

The Airbnb rep also commented that when the cancelled guest complains to Airbnb, often Airbnb gives the guest a full refund in order to keep them as a customer. The new policy therefore charges the host more to have a Strict Cancellation Policy to make up for these payments Airbnb has chosen to make.

Some hosts may make the argument that it is unfair to hosts that Airbnb is passing on to hosts the cost of Airbnb’s decision to fully refund the canceling guest. Why should hosts have to bear the burden (by way of higher Host Service Fee) of Airbnb’s decision to fully refund a guest who, at the last minute, decides to have a holiday in Bali instead of San Francisco?