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Beginning this August, Airbnb will be changing its host cancelation fee structure in to crack down on hosts who cancel reservations at the last minute. Airbnb has grown to be a wildly popular platform over the last decade, and it continues to offer affordable, unique, and diverse accommodations not found anywhere else. When it works, it works, but sometimes the unexpected can happen.
Bookings made months in advance that were considered a done deal have been canceled by the host, leaving travelers scrambling to find accommodation for their trips. Sometimes the reasoning is understandable enough, such as downed powerlines or unexpected damage to the property. However, sometimes the reason is outright unfair. Some hosts list the same property twice at different rates and cancel the booking for the person who reserved the lower rate.
Why Airbnb Is Making The Change
Until recently, the only penalty hosts faced when canceling a booking was a $50 to $100 fee, dependent on how close to the reservation the host canceled. This fee is excruciatingly low compared to how much hosts can make if they list a property more than once or find other ways to “resell” the reservation at a higher rate.
Consider the following:
A host has a single property they list on Airbnb for $100 per night. This is low enough they can nearly guarantee a booking. Now they list the same property again, either on Airbnb or another platform, for $250 per night. Why? Sometimes you catch a big fish where you least expect it. The property may not be worth $250 per night, but the host hopes to get lucky. Now, imagine you reserved the Airbnb months ahead of an upcoming trip. However, three days before you’re ready to leave, the higher-priced listing gets booked. What do you think the host will do? They will recoup the minuscule fee incurred in a single night, so of course they will cancel your reservation!
The New Standard
The problem was getting out of hand, with 41.1% of scams affecting Airbnb users falling into the “Multiple Listings Scam” category in 2021. Understandably, Airbnb has decided this needs to stop. When hosts cancel at the last minute, the travelers affected lose all confidence in the platform. They will very likely advise everyone they know to avoid using Airbnb. For this reason, Airbnb will be updating its host cancellation policy beginning on August 22nd, 2022.
Beginning this August, the minimum cancelation fee will be $50, and the maximum fee will be $1000. The fee imposed will be dependent upon how close to the reservation the host cancels. Here is the breakdown:
If Cancelled:
- 30 days ahead of check-in: 10% of Reservation Cost
- Less than 30 days but more than 48 hours before check-in: 25% of Reservation Cost
- Less than 48 hours before check-in: 50% of Reservation Cost
What It Means For Travelers
Travelers will likely reap the benefits of this necessary change. Firstly, host cancellations are more likely to decrease overall. In the case of the multiple listing example above, a fee of $1000 would greatly diminish any additional profit the host would gain by double listing the property. Knowing this, the host is less likely to double-list the property in the first place.
Additionally, travelers are likely to receive more support from Airbnb when things still don’t pan out as intended. Before the change, Airbnb would try to help travelers find similar accommodations. The company would their original deposit to a new booking. However, no similar properties were often available at the same price point. This forced travelers to either stay in sub-par accommodations, stay further out from their originally intended area, or cancel their trip and receive a refund.
Time will tell whether the change effectively lowers the incidence of host cancellations, but the future looks promising. Airbnb is a unique alternative to traditional bookings such as hotels, and this new change is sure to inspire more confidence in the platform moving forward.
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