Airbnb Came and Stole the Show
In 2008 Airbnb, a new online vacation rental company was formed and gave customers an alternative to staying at hotels during their vacations. It allowed for the rental of properties or spare rooms to vacationing guests. And vacationers worldwide gravitated towards Airbnb for its affordability and for the privacy that some rental properties offered. In 2019 Airbnb reported 1 billion dollars in earnings and customers spent more at Airbnb accommodations than they did at the Hilton hotel chains. Airbnb offered listings in 191 countries and their 4 million listings generated higher profits than those of the top 5 major hotels. The hotel industry was forced to adjust rates and to create amenities to attract more customers.
The Covid-19 Crisis Did Not Spare Airbnb
Airbnb has felt the impact of Covid-19, travel is at an all-time low, as the pandemic has forced most Americans and global travelers to stay home. Airbnb’s quarterly revenue has dropped 67 percent in the second quarter of 2020 and revenue fell by 335 million dollars at the end of June. Bookings are 35 percent lower than they were in June of 2019 and there was a 70 percent decline in bookings for May of 2020. As the world began to realize the gravity of the Covid-19 virus, Airbnb cancellations began pouring in and left the company with more than 1 billion dollars in cancellations. Airbnb felt the pressure of the Covid-19 travel restrictions and was forced to lay off 25 percent of its staff and contract workers.
Hotels Are Feeling the Impact of Covid-19
The hotel Industry is a giant worldwide and has contributed 660 billion dollars to the United States economy in 2019. It has been severely impacted by the onset of the Covid-19 pandemic and stands to lose up to 50 percent in revenue this year, as occupancy levels fall to historic lows. The Bureau of Labor Statistics has reported that 4.8 million hospitality and leisure jobs have been lost as a result of the pandemic. And since the pandemic began, hotels have lost 46 billion dollars in room revenue. 1 in 10 hotel rooms still remain unoccupied and low occupancy levels have forced many hotels to close their businesses.
The Refund Policies
Both those within the hotel industry and Airbnb have experienced unprecedented changes as a result of the Covid-19 pandemic. Soon after the severity of the virus was established, travelers began cancelling reservations at both hotels and at Airbnb lodgings. Most hotels have lenient cancellation policies that allow travelers to cancel or adjust their reservations up to 24 hours prior to arriving. And most hotels began offering refunds for prepaid bookings as well as traditional reservations. Airbnb however, had a variety of cancellation policies that property renters could choose from and not all options were lenient to travelers. Airbnb has a policy where full refunds are guaranteed within 48 hours of booking and after that period only 50 percent would be refunded to the traveler. Flights were canceled and many Airbnb customers found themselves struggling to get refunded for trips that could no longer happen. Eventually Airbnb directed owners to issue refunds of all bookings and established a 250-million-dollar fund to partially compensate the hosts that were affected. Those who did not receive a refund had the option of rescheduling their trips to a later date.
The Promise of Privacy
Considering that Covid-19 has infected millions of Americans and has caused almost 200,000 deaths, travelers are weighing their options carefully when it comes to accommodations. AllTheRoom Analytics reported that as a result of Covid-19, travelers were gravitating more towards smaller cities and towns to avoid crowds. The appeal of privacy is what makes most travelers gravitate towards Airbnb, as vacationers have the option of renting entire properties for their families. Some Airbnb hosts are providing self-check ins, where they provide an entry code that allows customers to enter the properties. Some properties have private pools that would attract vacationers who are concerned about keeping a safe distance from other travelers. The majority of Airbnb accommodations are equipped with kitchens where guests have the option of preparing their own meals.
Although hotels are generally larger and have more customers, they have adopted strict social distancing policies and also limit the number of guests permitted on elevators. Many hotels are now offering contactless check-ins which allow customers to check in using their mobile phones, other hotels allow kiosk check-ins where room key cards are dispensed. Some guests have the option of using their mobile phones to place orders and to pick up food items. Digital room assistants can be used to control the lighting, as well as the entertainment system. Many hotels have reduced housekeeping services in order to limit the interaction between employees and guests. The hotel industry has gone above and beyond to provide services that require little or no contact at all, however, dining options, pools and bars may be off limits or have restrictions.
The Hotel Industry’s Promise of Cleanliness
Both Airbnb and the hotel industry are struggling to reassure guests that their accommodations are safe and virus free. Hotels are protecting guests and staff by incorporating cleaning technology such as electrostatic sprayers. These sprayers deliver an electric charge that allows the disinfectant droplets to cling to surfaces to ensure that areas are properly sanitized. Using plexiglass partitions to separate staff from guests in restaurant areas, is another measure that most hotels are undertaking. Equipping workers with protective gear, such as masks and gloves are also an essential part of providing a safer environment. Some hotels may even require that guests submit to a temperature test before they will be allowed on to the hotel premises. These contactless options add an extra layer of protection by minimizing guests and staff interaction.
The American Hotel & Lodging Association’s recommendations for hotels
The American Hotel and Lodging Association rolled out their industry wide Safe Stay guidelines based on recommendations from public health authorities, in order to establish a high standard of cleaning and safety within hotels.
· Face coverings and social distancing required
· Choose contactless options
· Consider daily room cleaning, only if necessary
· Refrain from traveling if ill
Airbnb’s Promise of Cleanliness
Airbnb has also adopted strict cleaning policies to ensure that its accommodations are safe for guests. As a part of its Enhanced Cleaning Initiative, Airbnb offers two options to ensure the safety of accommodations. Hosts are required to enroll in an education and certification program to learn how to properly sanitize before renting to guests. Hosts are also required to wait 24 hours after guests check out before entering the property to clean. Hosts who opt not to take the cleaning protocol class must adhere to a 72-hour vacancy period between stays. Hosts who do not adhere to both safety options will have listings that will not display labels indicating that they have opted in the Enhanced Cleaning Initiative.
On Top of Their Games
Both the hotel industry and Airbnb realize the importance of winning back the confidence of travelers. Both have put strict policies in place to elevate their sanitation standards to prevent the spread of the Covid-19 virus. The hotel industry stands out by investing heavily in contactless technology, which ranges from digital check-ins, to digital room assistants and even the use of robots to sanitize hotel areas and to make room deliveries. Airbnb still offers customers the privacy that reduces their interaction with others. At this point travelers are in the best position to choose any number of options that appeal to what they’re looking for.