[REN #905] Airbnb, Hotels Duke it Out Over Germ-Free Lodging

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Airbnb, Hotels Duke it Out Over Germ-Free Lodging, Real Estate News for Investors Podcast Episode #905

Choosing between an Airbnb and a hotel will now include COVID-19 risk factors for many people, and at first glance, some travelers may think hotels are better at keeping things clean. But there are several factors to consider when choosing a place to stay overnight, including cleaning and disinfecting procedures. Both lodging options have their benefits and their risks.

An article in the New York Times gives hotels the edge over home-sharing services like Airbnb and VRBO. (1) It says that, for years, Airbnb has disrupted the travel industry with more affordable, home-like accommodations, but that COVID-19 is now disrupting the disruptor, in reference to Airbnb. That includes other home-sharing options as well, like VRBO.

An analyst for the lodging industry, Henry Harteveldt of the Atmosphere Research Group, told the Times, “I do think hotels may have a near-term advantage.” He’s predicting that hotels will provide better hygiene protocols and policies for social distancing.

Hotels vs. Home Shares

That kind of comment may up the ante for home shares as the beginning of a new contest with hotels. Both sides will be trying to put minds at ease about what they are doing to keep guests safe. Harteveldt says that, “Cleanliness and hygiene will be the new five-star restaurant or 800-thread-count sheets.” So whatever kind of lodging you choose, that establishment will have to convince you that it can provide the kind of germ-free environment you need.

According to Harteveldt, “Branded or well-run independent hotels may have a compelling advantage over home sharing because hotels are going to use professional or industrial-grade cleaning products. Their housekeeping staff will be trained to clean to standards set by hotels. And hotels will have marketing budgets to promote this.”

Hotel Cleaning Procedures

Many hotels were quick to produce new cleaning protocols based on CDC guidelines. (2) Marriott announced the creation of the Marriott Global Cleanliness Council toward the end of April. The Council was given the task of “developing the next level of global hospitality cleanliness standards, norms and behaviors.” Members of the Council include high-level experts in public health, occupational health, hygiene, housekeeping, food safety, and disease prevention. 

To kill surface germs, Marriott says it will use electrostatic sprayers with hospital-grade disinfectant. They will be used throughout the hotel, in guest rooms, lobbies, gyms, and other common areas. UV light will be used to sanitize guest room keys and other smaller items. Other measures will include disinfecting wipes in each guest room and warnings throughout the hotel to maintain social distancing. Employees working with food are also being trained and supervised for safe preparation practices. 

That’s an example of what you might expect from a hotel chain. Hilton is adopting similar procedures. It remains to be seen whether that will be enough to build trust among travelers. And there’s another side to the virus prevention coin. It’s possible that renting a whole home from an Airbnb host could be safer than staying in a hotel because there won’t be a lot of other people around. Plus, Airbnb has also announced new cleaning protocols called “Enhanced Cleaning Initiative.” (3) 

Airbnb’s “Enhanced Cleaning Initiative”

The Initiative includes three options for hosts to advertise to their customers. If hosts choose the most rigorous one, called the “Cleaning Protocol,” they must participate in a training and certification program. The standards would include masks and gloves for hosts and cleaning personnel and the use of specific disinfectants. Hosts must also wait 24 hours after a guest leaves to clean the room. That reduces the risk that cleaning crews will encounter airborne germs.

The second option, called the “Booking Buffer,” requires a longer waiting period between guest stays. If hosts choose this option, the Airbnb booking platform will automatically block out 72 hours between guests. Hosts will again wait 24 hours to clean, and another 48 hours to welcome a guest.

And then there’s a third option which is that hosts have not chosen either of the other two. That may not be appealing to anyone looking for a place to stay because the host’s cleaning choice will be part of the listing information.

The Airbnb guest will also have to trust that the host has followed any protocol they’ve promised in their listing. Airbnb relies on guest reviews to maintain high standards. Guests who’ve read good reviews and then walk into a home that looks and smells clean with no dust or spots may feel confident that the host has done a good job of cleaning. 

Guests also have another option, if they want to be sure about cleanliness. When they arrive, they can do a little spot cleaning with disinfectant wipes. They can also run utensils and dishes through the dishwasher, and wash bed linens and towels. Of course that’s a lot of work for a short stay, but if they’re staying for a longer time, it may be worth the effort.

Check the Refund Policy

Another thing to consider when deciding between a hotel and a home stay is the refund policy. Hotels often let you cancel up to your arrival or the day before your arrival with a full refund. Airbnb hosts have a whole range of cancellation policies from flexible to strict.
When the pandemic hit, Airbnb required full refunds for bookings between March 14 through June 15. People who paid for lodging after that may still want to cancel but must currently abide by the host’s policy, and that may not promise a full refund at this point. It’s possible that Airbnb may extend refund requirements, but that hasn’t happened yet, for July.

The New York Times wrote about a California woman who booked a four-bedroom home in Southern Maine for a July vacation with friends, and would like a refund. The cost for a week’s stay is $7,000, paid in advance. The host will provide a full refund if the reservation is cancelled within 48 hours, but currently, the California women would only get 50%.

People who booked on VRBO have had a tougher time getting refunds. The company did not issue an across-the-board refund promise at any time during the pandemic. It has only asked hosts to refund 50% of the reservation costs or allow guests to postpone their trips for up to a year. 

The lesson here is to check the refund policy beforehand if you are renting a home share, and be aware of cleaning procedures, and what you see with your own eyes. And if you are an Airbnb host, you may need to consider that hotels are your competitor, and if they have flexible refund policies and superior cleaning procedures, they may win the customer.

If you own an Airbnb, we wish you much luck as the country attempts a return to normal. And if you’d like to stay updated on the many changes facing the real estate industry, check out our blogs at realwealthnetwork.com. It’s free to join, and then you’ll also have access to hundreds of educational webinars for your real estate investing journey.

Links:

(1) New York Times Article

(2) Marriott News Article

(3) Airbnb Article

(4) Business Insider Article

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