Airbnb, Vrbo refund policies spread financial hit of canceled trips

Millions of people are suffering financial consequences from canceled travel plans because of the coronavirus and who are wrangling with companies over refunds.

In August, months before the novel coronavirus first reared its head in China, Karen McGrath and a group of co-workers spent $4,100 to book a stay in Key West before a company conference in Florida scheduled for May.

Through vacation rental business Vrbo, they booked a stay on a docked boat along with a sunset cruise. Then, the coronavirus pandemic prompted the company to cancel the conference, and McGrath asked for a refund.

The host declined because it was less than 60 days before her trip. “No exceptions are being made,” McGrath said.

She is one of millions of people suffering financial consequences from canceled travel plans because of the coronavirus and who are wrangling with companies over refunds.

“I said, here’s the deal. I’m not coming on this trip. I really just want to get my money back,” said McGrath, who also has complained on social media. “They’re just heartless people.”

Vrbo and competitor Airbnb are standing between two groups of people trying to hold onto cash as economic stability evaporates — on one side are travelers, and on the other are individuals and companies who rent to them.

Vrbo has a policy that allows property owners to decide whether to give refunds or credits — which can leave travelers in the lurch. Airbnb has a policy that requires refunds to travelers who cancel plans in set periods — meaning hosts face lost income.

The situation is particularly severe as stay-at-home directives steamroll over travel plans for spring break, which would have come next week for many metro Atlanta schools.

Kristy Petrillo, a real estate agent who previously hosted HGTV’s “Cabin Reno“ and owns vacation rentals in Blue Ridge, counts on the spring season for income to cover mortgages and other costs, including insurance, property taxes, landscaping and utilities.

All of the Vrbo bookings for her properties in late March, April and early May have been canceled, which Petrillo called “an unprecedented hardship.” She is offering credits toward future stays, and made some exceptions by offering partial refunds with partial credit to people with extenuating circumstances.

“The effects of this virus are far-reaching — five or six mortgages can be a crippling financial burden and easily turn into five or six foreclosures,” Petrillo said.

Many travelers canceling trips also have faced hassles with getting refunds from airlines, instead of only credits for future flights.

The Vrbo policy can be more restrictive for travelers.

Vrbo, which is owned by Expedia and said it typically acts as the intermediary for payments, is refunding its service fees and asking property managers to offer a credit — and telling them that if the traveler wants a refund and they don’t offer at least 50% refunds, it could affect their future bookings. But any credit offered would be from that particular property manager or owner — which may limit its usage to a single location. Meanwhile, the state of Florida is suspending vacation rentals for two weeks.

“In this situation, there is no perfect solution,” Vrbo spokeswoman Alison Kwong said in an email, adding that “we believe our policy strikes the best balance of protecting travelers, vacation home owners and property managers, and the public.”

“Vrbo is a two-sided marketplace, so for every traveler who paid hard-earned money for a trip they cannot take, there is a homeowner or property manager who relies on clear cancellation policies and the associated money within those policies to pay their mortgage and hard-working employees,” according to Kwong, who added that the vast majority of vacation home owners and property managers are giving credits or refunds. Expedia in mid-March said it expected to take a $30 million-$40 million hit in its first-quarter financial results because of negative impact from COVID-19.

Airbnb’s policy says guests who booked by March 14 to check-in March 14-May 31 can cancel for a full refund for COVID-19 related circumstances. The company also announced Monday a $250 million fund it will use to pay hosts 25% of what they would have gotten for a cancellation in that period.

“We know a lot of people are facing serious hardships right now,” Airbnb says on its website.

Airbnb host Elizabeth Fielder, who lives in Grant Park and rents out an apartment on her property, said the mass cancellations and loss of income are a concern. But, she said it’s important “to not be greedy at this time. … I just feel like it’s the right thing to do.”

McGrath, frustrated with not getting the refund for her booking on Vrbo, said she feels some companies are “just preying on people.”

“I think we’re all going through a lot of different hardships in our lives,” she said. “I know nobody wants to lose money, but at the end of the day, think about your customer base.”

Autumn Johnson, a veterinary technician who lives in Lawrenceville, was planning a girls trip to Destin, Florida, for April with a stay booked through Vrbo, until the COVID-19 pandemic grew. She was told the group could get only a credit and not a refund.

“Some people are out of work right now, so of course, the extra money that we can get back, we can use it toward food, even for bills that we do still have to pay,” Johnson said.

One of the women who was planning to go on the trip, Camalla Ash, owns a licensed childcare business, but isn’t caring for the children now because their parents are at home. Her husband is a barber, and his barbershop was forced to shut down.

“We have savings,” she said, so she’s not too worried right now. “I’m trying not to stress because stressing is not going to help.”

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