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Additional refunds - what happens to the service fees?

Hi there,
Are there any UK hosts with larger group properties out there who are currently nervously awaiting Monday’s verdict on whether the restriction on numbers indoors are going to be lifted on the 21st?
In anticipation of that not going ahead straight away, I’m trying to understand what would happen if guests can’t travel due to their group size and need to cancel, expecting full refunds.
I’m all for refunding, but I’m unclear about the steps, timings and eventual amounts being paid out. Say a guest cancels 2 weeks before the arrival date. My current cancellation policy is set to strict, so the guest would immediately get a 50% reimbursement of their payment. Does this payment include 50% of their service charge as well and presumably the cleaning fee?
Now, in order for the guest to get a full refund, I would have to issue an additional refund. However, according to Airbnb, I will only get my partial pay-out 24 hours after the guest’s supposed arrival, which is 2 weeks away. Or is it possible to refund before the money is paid out to me? If so, will my service charge be deducted from the amount available that I can send back to the customer, in which case the customer is charged both their and my service charge?! Consequently, if I promise my guests a full refund, will I have to absorb these two service charges and essentially end up out of pocket?
Sorry, so many questions, but I find the guidance on Airbnb not especially helpful. As I want to send a message to my guests with their options, I would need to understand what I can actually offer them, and also make them aware that there presumably will be 2 separate payouts.
Thank you very much,
Silke

The service charge is not in your control.

I would stick to your strict policy, I see no benefit to refunding someone who booked a reservation with a strict policy during a global pandemic. They are not due anything beyond the policy in place.

RR

1 Like

I think you’re taking the wrong stance. Don’t promise full refunds, don’t assume your guests will expect full refunds. What you really need to do is tell guests that Airbnb handles all refunds. Airbnb will give guests any refund they are due and they’ll give you any earnings you are due. That’s a big part of what their service fees are paying for in the first place. Occasionally, guests might make a case where they aren’t entitled to a refund by Airbnb’s policies, but Airbnb might still be sympathetic. In that case, Airbnb might contact you to ask you if you want to provide a full refund, and then you can decide to allow it or not.

Another warning is that if you provide refunds to guests, there are scenarios where you may provide a refund, but never actually receive the payment in the first place, so you will be giving away money from your own pocket. I don’t mean just the fees, either.

For a cancellation before stay:

  1. Cleaning fees are always refunded (no after stay cleaning required because no stay)

  2. After the 48 hour no fault cancellation period at booking, Airbnb will NOT refund any fees. Makes sense because they did their job as a booking platform

I agree. I’ve become more hardcore about following the refund policy the guest signed up for during a pandemic. Everyone knows there are risks of restrictions.

Let the guests cancel and let Airbnb process refunds under the policy.

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Thank you all for your advice. I’m completely new to hosting. I’ve had several upcoming guests ask about our covid cancellation policy, so I just assumed that hosts adopt a full refund policy as soon as there are Covid restrictions in place.

I’ve had a helpful chat to an Airbnb customer support person who told me, like Brian mentioned, that if a guests asks and I agree to a full refund, all monies, including service fees, will go back to the guest, effectively superseding the normal cancellation policy we have in place. This will work for me on a case by case basis.

Many thanks again,
Silke

I hope so but don’t count on it. The free cancellation period is 48 hours after booking as long as it is two weeks or more between booking & stay start.

@Silke Do not ever take what a customer service rep tells you as the truth. They give out incorrect info all the time. Most hosts know Airbnb policy better than they do.

Guests will not get their service fees back if cancelling after 48 hours. I think they can 3 times a year, but depends in some other factors.

Never get involved in a service fee discussion with your guests. Just tell them hosts have nothing to do with the amount, administration, or refunding of Airbnb service fees- that’s something they have to talk to Airbnb about.

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Ok, thanks. I will watch out. In any case, I’m not promising the guests any service charge refunds.

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You can’t issue them a refund because you don’t have their money. :slight_smile:

If a guest starts talking about refunds for cancellation, simply tell them that you don’t have their money. Explain that hosts don’t receive payment until after check-in so they have to deal exclusively with Airbnb.

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