Vrbo in Major Reversal on Guest Refund Policies
13.07.2024 - 12:11
/ skift.com
/ Dennis Schaal
Vrbo last month reversed a longstanding policy on guest refunds and host cancellations, tipping the benefits toward guests and away from hosts when there are major travel disruptions.
Under the new rules, when Vrbo activates its Extenuating Circumstances Policy during a disruption, hosts must refund guests regardless of their own cancellation policies. Vrbo refunds the traveler service fee the guest paid when booking the stay.
“The financial impact of this policy will be felt entirely by hosts,” said Rena Pacheco-Theard, co-founder and CEO of luxury vacation rental platform Boutiq, which uses Vrbo as one of its sales channels.
Pacheco-Theard noted Vrbo doesn’t take the financial risk, including paying for mortgages, landscaping and utilities. “Rather than travelers being responsible for purchasing trip insurance to protect against natural disasters and abnormal weather events or declared health emergencies, hosts now foot the bill with no compensation,” she added.
Vrbo’s new Extenuating Circumstances Policy looks a lot like the Major Disruptive Events Policy that Airbnb introduced in May. It is an about-face from Vrbo’s prior cancellation policy: Even during the pandemic, it declined to mandate refunds to guests. At that time, Vrbo urged hosts to refund guests, but it left it up to hosts’ discretion and their individual cancellation policies remained in effect.
That won it much support from hosts. Airbnb, on the other hand, earned hosts’ ire when it required them to refund guests regardless of their own cancellation policies.
Hosts have the ability to establish their own cancellation policies, and they often vary as to which dates a guest would be eligible for a full or partial refund, and the cutoff date when no refund is possible.
Vrbo intends to activate the policy and mandate that hosts refund guests during natural disasters such as earthquakes, volcanoes, tsunamis, flooding, tornadoes and wildfires, and other weather events.
The policy would not apply to hurricanes in the Caribbean during hurricane season, for example, unless it would trigger a prolonged power outage impacting “a vast majority of homes in a major region or city,” Vrbo’s policy states.
The policy will cover new government-declared pandemics, but not Covid-19 because it is considered a risk that people should already be aware of.
When a government imposes mandatory travel restrictions “that make it impossible or illegal for a guest to travel” or a host to proceed with the stay, the extenuating circumstances policy would be in force.
A hint of Vrbo’s change of thinking came during the Maui wildfires last summer when Vrbo mandated guest refunds. But Vrbo didn’t implement an overall change in policy at that time.
A Vrbo