Airbnb promised cash refunds for coronavirus cancellations, but some guests say it’s not that simple

Last month, Airbnb promised to issue full cash refunds to qualifying travelers whose trips had been impacted by the coronavirus, but some customers are complaining that Airbnb is making them jump through hoops to get their cash back.

The coronavirus has disrupted many industries, but none more so than the travel industry. As the pandemic spread, leading to lockdowns, travelers canceled business and personal trips in massive numbers. The U.S. Travel Association expects the industry to lose 4.6 million jobs this year.

Customers of Airbnb and other vacation rental companies have been particularly vulnerable because, unlike with a hotel stay, guests must pay for the bulk of their lodging before their trip. Airbnb’s refund policy offered guests some reassurance that they wouldn’t lose hundreds or thousands of dollars for lodging on trips they could no longer take take.

But several guests told CNBC they’re being offered travel credits they don’t want instead of cash, and they cannot get full cash refunds unless they show documentation proving that they’re subject to travel restrictions or fit into other categories. Some guests are continuing to fight for their refunds while others have had to resort to emailing execs or complaining on social media to push the company into following through. Meanwhile, hundreds of customers have taken to Reddit and Twitter to complain about how difficult Airbnb has made it for them to receive a cash refund for their reservations.

It’s a dramatic turn of events for Airbnb, which was poised to be the hottest tech IPO (or direct listing) of the year until the COVID-19 crisis struck the U.S. last month. The company had lined up bankers to lead the offering, which would test whether Airbnb could live up to its $31 billion private market valuation from 2017, but recently accepted $1 billion in new private funding at a lower valuation. The Wall Street Journal reported in February that Airbnb lost $322 million over the first nine months of last year, after reporting a $200 million profit in 2018, as it ramped up spending.

If Airbnb doesn’t do more to help guests who feel they have a legitimate claim to a refund, the company runs the risk of losing those customers and its hosts to competitors, said Henry Harteveldt, travel industry analyst at Atmosphere Research Group.

“Airbnb needs to rest this problem before it becomes a larger and more expensive problem for them to solve,” Harteveldt said.

“Our community support team has been working around the clock against this global crisis to help both hosts and guests throughout a situation that has been challenging for the entire industry,” a spokesman for Airbnb told CNBC in a statement. “We activated our Extenuating Circumstances policy to provide guests with full refunds or credit because we believe this is the responsible thing to do given the guidance of governments and health experts.”

On March 14, Airbnb announced that it would give 100% refunds to guests who had already booked reservations between then and April 14, writing that “Airbnb’s Extenuating Circumstances policy allows hosts and guests to cancel eligible reservations with no charge or penalty.”

This put Airbnb ahead of its competitors in terms of offering a clear, full refund policy. For instance, Expedia-owned VRBO said on March 18 that it would ask hosts to refund a minimum of 50% of what customers paid, and only then if the guests are not willing to re-book at another date. Booking.com is asking hosts to work directly with customers to accommodate new travel dates, or issue vouchers or refunds, but a spokesperson told CNBC the company will push refunds through for reservations made before April 6 if the guests and hosts can’t come to an agreement.

On March 30, as the extent of the coronavirus lockdowns grew, Airbnb extended its policy to May 31 and specifically said that guests could receive cash.

“When guests cancel due to COVID-19-related circumstances, we’re giving them the option to take either a cash refund or a travel credit that can be used for a stay at a later date,” the company said in a post announcing the extension of the cancellation window. In a help document, Airbnb wrote: “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, may be canceled before check-in. This means that guests who cancel will receive, at their option, travel credit or a full cash refund….”

But according to screenshots guests shared with CNBC, Airbnb is telling some guests it will only offer cash refunds if they can prove, with documentation, that they fit into one of four buckets:

• There are government restrictions that prohibit them from leaving their location or going to their destination.
• They are sick and their health provider has instructed them not to travel.
• Their means of transportation is no longer available.
• They are a healthcare professional and cannot travel.

When KJ Galvan received the news on March 25 that her internship as a software engineer at Google would now be done remotely, she knew she needed to cancel the three-month Airbnb she had booked to stay in Los Angeles for the summer. 

Galvan tried to collect her refund beginning on April 1. She went through the app, and she was offered a 100% travel credit refund or a partial cash refund in accordance to her host’s cancellation policy. Below, in very fine print, was a link to the process for collecting a full cash refund. 

Galvan, who is based in Richland, Washington, tried to cancel using her state’s stay-at-home order as her government restriction reason to claim her cash refund, but Airbnb denied her because Washington’s order only runs through May 4 and her reservation is not until May 21. She then submitted a screenshot of a government web page detailing the state of California’s stay-at-home order to Airbnb.

“There’s just tiny fine print there that makes things more stressful for me in an already stressful time,” Galvan said. 

Galvan heard from Airbnb that her refund would be approved, after CNBC contacted Airbnb about her case.

Wei Shi from Brooklyn, New York, also had trouble getting refunds for two Airbnb reservations she was trying to cancel. Shi was planning to travel to parts of Greece in late April with a group of her friends.

When Shi tried to cancel her Airbnb in Athens for May 1, she was given a full refund, but she received the $115 service fee portion of the refund as a travel credit. For her Airbnb in Naxos, Greece, for April 28, Shi was asked to prove that she met one of Airbnb’s four criteria in order to receive a full cash refund. On Monday, she submitted a screenshot of an email from her airline that said her flight was canceled as well as a screenshot of the CDC’s travel restriction advisory.

After CNBC contacted Airbnb, Shi received her full cash refund for the Naxos reservation, and her $115 travel credit for the Athens reservation was also refunded as cash. 

“I just feel like it’s pretty shady,” Shi said. “My heart goes out to Airbnb hosts. This is really hurting their revenue stream, but at the same time, the traveler should not be penalized for a pandemic.”

Mike Brosch of Chanhassen, Minnesota, was planning on staying at an Airbnb in Galveston, Texas, on April 15 to spend spring break with his wife, daughter and mom. After Airbnb extended its cancellation window, Brosch decided to cancel his Airbnb reservation. Brosch said he read just how much documentation he needed to include in his cancellation request that it left him unsure whether he would qualify for the full cash refund. 

Brosch submitted copies of Minnesota’s shelter-in-place order, Galveston’s shelter-in-place order and the Centers for Disease Control and Prevention’s guidelines for travel as his documentation. Airbnb then approved his refund request. 

“Straightforward, eh?” Brosch told CNBC. 

Other guests have not been able to get refunds because they fell outside of Airbnb’s original window for refunds.

Susan Youngquist of Sacramento, California, had a booking for an Airbnb in Cologne, Germany, reserved since February, and had already paid 50% of the booking. She tried to cancel and get her money back, but the reservation was on April 21, just outside Airbnb’s original March 14 through April 14 cancellation window. 

Youngquist tried multiple times to get help from Airbnb’s customer support, but the company told her she fell outside the window. Rather than wait and be charged for the second half of the booking, Youngquist decided to cancel the reservation. She received $4 in cash and a $30 Airbnb credit. 

After the company extended its cancellation window, she tried to get the rest of her money back, but Airbnb’s customer support told her she was out of luck and should’ve waited for them to extend the window. 

“Why did they even pick April 14? Was COVID magically just going to disappear on April 14?” Youngquist said.

Taylor Anderson of Charleston, South Carolina, had a similar problem.

He and 15 of his buddies had a reunion trip planned in San Diego, California, for April 16 — outside of Airbnb’s initial cancellation window. When it became clear the trip would not be happening, Anderson tried to cancel and get his money back. Once Airbnb extended its full-refund window, Anderson attempted to collect the $3,000 deposit he had put down, but he came across Airbnb’s page asking for documentation proving he fit into one of the four buckets necessary to get a refund. Meanwhile, he was due to pay another $3,000 in a few days. 

Concerned that Airbnb would reject his documentation and charge his credit card the additional money, Anderson gave up on the whole refund process and just accepted the $3,000 travel credit, rather than risking a loss of $6,000.

“I’d rather have that money in my account right now,” Anderson said. “I think that that’s how most of the guests feel. We’re all trying to save money in this current environment. We don’t want these large charges turning into travel credits that we’re not planning to use anytime soon.”

Dean Dudley of Barrington, New Hampshire, faces a similar situation. After paying $1,100 for a May 1 booking for an Airbnb in Austin, Texas, Dudley canceled the reservation, even though he did not fall within Airbnb’s original March 14 through April 14 window. Dudley was hoping to avoid paying a second charge of $1,200.

His cancellation resulted in a $70 refund and a credit for approximately $250. 

Now that Airbnb has extended its coronavirus cancellation window, Dudley has tried to get his additional money refunded with no luck. 

“I think it’s a grab for money on a technicality because they aren’t sure how much this pandemic is going to affect them,” Dudley said. “They’d rather have a policy that sounds good on paper, but they can actually recoup money for the stays that have been cancelled.”

Some guests have succeeded in collecting their money, but they had to take drastic measures along the way.

Noel Lane of Union, New Jersey, had a trip to Las Vegas booked for early May. He was planning to fly there with his friends and family to marry his fiance, but once coronavirus got bad, he began trying to cancel his trip. 

Lane tried every step Airbnb customer service offered to get his money, but nothing was working. It wasn’t until after he sent an email directly to Airbnb CEO Brian Chesky and Vice President of Community Support Aisling Hassell that Lane’s case progressed and he was issued a refund.

“This is a national emergency, yet your policies only reflect self preservation and not putting the customer first,” Lane wrote in his email to the executives. “This is how hotels prove to be superior because there are reasonable cancellation policies in place allowing people to recoup their money when unforseen (sic) events like this occur.”

Amy Shoemaker of Orange County, California, also had to get aggressive to get her money back.

Shoemaker was going to Chicago for her 10-year college reunion. After her reunion was canceled on March 14, Shoemaker contacted Airbnb on March 15 to cancel her reservation. After trying for two weeks to get her money back, Shoemaker finally took to her Instagram and LinkedIn accounts on March 31 to publicly complain about the company. The next day, Airbnb customer support contacted her. Airbnb told Shoemaker she would receive a full cash refund, but it would take five to 15 business days for it to show up. 

Shoemaker and other Airbnb guests who spoke with CNBC said that the experience of trying to collect their refunds has left them with a bad tastes in their mouth, and they are unsure if they will travel with Airbnb in the future. 

“It’s definitely made me think twice about using Airbnb in the future,” Shoemaker said. “I shouldn’t have to deal with this. I have other things to worry about besides my Airbnb refund.”