Serviced accommodation is such a fantastic business to be in, and now that UK travel is set to open up this summer SA operators will be looking forward to big bookings and profits once more. You just need to be sure you are indeed collecting the funds for each booking. If you have SA property available through Airbnb, you need to know this. Don’t panic, you just need to know about it and iron out any exposure.
Most SA operators don’t expect to have payment issues with Airbnb- surely they collect payment from the guest before arrival, right? What if all this time we’ve had a false sense of security that payment is taken by Airbnb at the time the booking is confirmed?
We recently discovered that operators are actually pretty exposed with Airbnb bookings ie they often don’t attempt to take payment from the guest until 3 nts into the stay, and if payment fails they may not inform hosts until even longer into the stay. If in that time the guest has been and gone the guest can easily get away with a free stay (if they wanted to) and Airbnb takes no liability for non paying guests.
Can you believe we’ve had listings with Airbnb for nearly 5 years and hadn’t spotted this issue until now? We always believed that airbnb had us covered because they collect payment from guests before arrival. Having discovered that payment is not always taken prior check-in, and if the guest wanted to, they could use your property and leave without paying, I felt duty bound to let more operators know.
Over the years we’ve had a very low proportion of our bookings from Airbnb since the majority of our business is direct. However this February we had a good month long stay at one of our properties that was booked by contractors working at a local power station. They checked in on 15th Feb and 18 days into their stay we got a message from Airbnb letting us know that they hadn’t been able to collect payment from the guest.
As you can imagine this came as a huge surprise as we’d never encountered payment issues with Airbnb previously, and we believed that Airbnb collected payment when the booking was confirmed and then released funds to the operator within a day or two of check in.
18 nights worth of stay and no payment had been collected by Airbnb so in theory the guest could have left at that point and had a free stay. The worst part about it is that Airbnb chose not to inform us when they first failed to collect payment, the guest gets a few notifications first before the host is informed, and that adds more time lag.
Thankfully when we took this up with our guest we were able to rectify the situation. The point of sharing this little story is to help ensure it doesn’t happen to other operators where you end up losing out.
There are a few different host forums discussing the same situation which happened to us but here is just one if you wanted to read about it….
https://community.withairbnb.com/t5/Hosting/problem-collecting-payment-from-guest/td-p/660486.
So, what can we learn from this and what can you do to protect your SA revenue?
# Firstly, check your bank account within 1-2 days of an airbnb check in to ensure the money has arrived, and if not you can start to chase it up.
# You can set your properties up to only allow guests who have provided government ID to Airbnb and are verified to book. [Whilst the guest being verified by AirBnB will unfortunately not make a difference if the card was declined it does provide a little more comfort as to the validity of the guest].
# If you use a channel manager you can set it up to have all guests complete a digital registration form where they sign to say that any damages can be taken from a credit card which needs to be registered prior to checking in.
The digital registration form can be built into a channel manager so the guest can complete it online and you call them to obtain card details which the channel manager can store and verify using the stripe connection. You can also pre-auth any deposit which is held for 7 days.
[Note-Make sure you update any airbnb listings with the fact that you’ll ask guests to complete the form and/or take a deposit if you set it up.]
So, in summary, don’t panic but just be aware that there is a degree of financial exposure when taking bookings from Airbnb. You just need to be aware of this and put suitable measures in place to mitigate the risk and protect the cash flow of your business.
What constructive lessons have you had from your SA business recently?
May your SA business thrive this year. 😁