What to do with my Airbnb during Covid-19 ?
Dealing with the fallout of covid-19s shutdown of the tourism industry can be both mentally and financially jarring.
Whether you are a property owner, tenant, or subletter, Airbnb has agreed to reimburse 25% of the reservations cancelled due to covid-19 as a gesture of good will. The reimbursement is inclusive to cancellations that have taken place between March 14th and May 31rst. Visit Airbnb.com for detailed information.
If cancellations keep on going beyond the month of May, you can ask your guests to contact their credit cards company in order to inquire about their travel insurances. They might be eligible for a reimbursement of the cancelation fee. This way you might be able to have a win win situation depending on your previous cancellation policies.
A shift in priority can also alleviate some of the financial strain brought on by this pandemic. With a reduction in worldwide travelling, monthly rentals become a significant fallback. Even if prices are competitive, you may find a local guest that needs a place to stay. Be careful, however, with the tenants you accept and communicate with them to understand the purpose of their stay.
How can you adapt ?
Keep in mind that financial institutions are providing aid to many. As a property owner, you can request up to a six month forbearance on your mortgage. Despite this meaning a mortgage term extension of 6 months and more interests to pay in the long run, it is still better than currently missing out payments due to covid-19. An additional option to consider is renting on a long term lease. However, be aware that if you want to get your rental back next year, you would have to find a tenant that wants to stay only one year and that agrees to sign a lease cancellation up front to confirm that there will be no renewal. Note that all this depends on the regulations of your rental board.
If you are a tenant, you can either negotiate a short term rental agreement with your landlord, sublease your apartment to locals for a period of time, perform a lease transfer and sell your furnishings, or request a lease cancellation from your landlord. Hopefully you can find a way to get through these hard times and stay in the game.
If you are a sublessor, you have less options. You can either negotiate payments with the main tenant on the lease or agree on a contract cancelation.
How long will it take ?
No one knows for sure but you can only make predictions and adapt based on your financial situation and the evolution of Covid-19 on a day to day basis. What we know for sure is that most of the upcoming tourism activities are being cancelled. Therefore, we should anticipate continued cancellations for the foreseeable future, and plan accordingly.
It is also good to be hopeful though. If things get better by July 2020, you should expect to see a lot of domestic travelling in cars instead of international flights. Depending on the percentage of domestic clients you usually receive, you can decide to wait for reservations or not. Your statistics can be found on Airdna.com.
If, however, the pandemic persists for another 6 to 12 months, revenues from long term leasing may become a must, depending on what situation you are in.
Will Aribnb recover from Covid-19 ?
Airbnb is a relatively young company. They will find a way to get through this period, but it really all depends on the hosts and the guests. For the hosts, the market will be a lot less competitive since many owners will go for long term rentals. If you have the financial capabilities to get through this period and are a legal licensed Airbnb owner, you will be in a great position once everything is resolved. However, If you don’t, then it is ok to take a break, focus on the essentials, and get back to it once the market has recovered.
Once this is over, people will eventually return to travelling, whether it is domestically or international. As always, the most important part is to provide impeccable service to guests, including cleaning and courtesies, so as to generate good reviews. We strongly believe that negligent hosts will have a much harder time recovering.
In the hopes that governments and airline companies will implement strict regulations to make travelers feel safe in the future, all we can do now is to save lives by staying at home!