As you well know, the corona virus is significantly impacting the travel and tourism industry. Although we are in uncharted territory, we believe it’s important for vacation rental homeowners to get out in front of the situation: be prepared to handle both your committed guests for this rental season and prospective ones. And be pro-active in raising the subject with them.
Cape and Islands rentals may be less impacted
At this point, it’s impossible to predict the impact the virus will have on travel to the Cape and Islands this summer. But although fears of the virus could escalate, many vacationers will likely choose local/regional travel over international or long-distance this summer. Rather than fly to a distant vacation destination, they could opt to drive to the Cape or ferry to the Islands. In fact, 96% of all visitors to the Cape arrive by car, and virtually half the country can drive here in a day.
And, of course, there are advantages to staying in a private home rather than a hotel, inn, or resort, which have common areas where many convene.
But with so much uncertainty about whether the virus will continue to spread or be contained in the summer months, it’s understandable that some vacationers will be hesitant about booking a home. And those who have already booked a rental may wonder what their cancellation options are.
Are you prepared to respond to vacationers’ concerns?
We are surprised to learn that HomeAway/VRBO is encouraging homeowners to give their guests full refunds. (VRBO President Jeff Hurst wrote, “In the spirit of good hospitality, we strongly encourage you to offer a full refund. When you do, Vrbo will also refund our Traveler Service Fee in full.”
Instead, we feel that every situation is different, and every homeowner should make the decision that works best for them, including the option to not provide a full refund.
Here are some options to consider:
- Especially if you have a smaller rental, you might offer prospective guests the opportunity to cancel up to a month or two prior to their occupancy. This might attract renters now who might otherwise procrastinate in booking a home.
- Allow them to put their deposit towards a future stay.
- Consider splitting the refund with them.
- In any case, as most of your leases state, provide a full refund if you are able to rebook your home.
Some practical steps and some psychology
A key thing to keep in mind is that there are two facets to address:
- the specific measures you can take to adapt to the situation caused by the virus, and
- the psychological impact of the virus on vacationers and how you can manage that.
The importance of addressing vacationers’ concerns
Whether well-founded or not, vacationers are going to be anxious about the virus and the risks of travelling. It’s therefore vital for you to be sympathetic to their concerns and to convey a willingness to compromise and work together to arrive at a mutually acceptable arrangement.
Practical steps you can take:
- As already discussed, consider relaxing your cancellation policy.
- Edit your lease to reflect any changes in your cancellation policy.
- Provide vacationers assurances that your home will be extraordinarily and professionally cleaned before their arrival.
- Provide your guests with ample disinfectant cleaning supplies.
- Update your listing with this information to better market your home.
- Suggest to your guests that they buy travel insurance (See below for more information.)
For most of us, the idea of providing a full refund is very unappealing. We work hard for our bookings, may well have turned down other opportunities to fill that week, and simply cannot afford to lose the entire week’s income.
The problem is that, if you still have any vacancies, the current conditions could make it more challenging to fill them. By offering a more lenient cancellation policy, you may well increase your odds of filling your home. Wouldn’t you prefer to book your home with the possibility of some cancellations rather than not booking it at all?
For more information about cancellation policies and approaches, read our post about Cancellation Policy Options for Vacation Rental Homeowners.
Be prepared for pent-up demand
Because of the virus and the uncertain economy, we suspect that a fair number of vacationers may hold off for a while before booking a vacation rental. So, don’t give up because you have uncharacteristic vacancies – even into June and July. There could, in fact, be a lot of pent-up demand by then. Be ready to offer a special of some kind. And take advantage of our free Owner Special to promote the offer.
If you sense some hesitation from prospective guests due to the virus, you can suggest they purchase travel insurance. Many insurance companies, however, may not honor cancellations due to virus-related issues. One insurance company states that “Trip cancellations and trip interruptions due to known, foreseeable, or expected events, epidemics, or fear of travel are generally not covered.”
If so, it may be possible for vacationers to obtain a “cancel for any reason” (“CFAR”) insurance policy. CFAR coverage is usually an add-on to a regular trip insurance package and often only refunds up to 50-75%. Every insurance company, policy, and situation is different, though, so vacationers must contact the insurance company directly for a specific quote. Here are a few reputable travel insurance companies: SqureMouth, Allianz, Travel Guard, InsureMyTrip.
At WeNeedaVacation.com, we are not proposing any hard-and-fast cancellation policy. Every homeowner’s situation is unique, and we feel strongly that it is your prerogative to manage your rentals as you see fit. We do, however, urge everyone to be prepared for questions from vacationers about their cancellation policies. And if you make any changes to yours, be sure to update your lease accordingly. Be proactive and communicative with your guests.
See my conversation with Jack Peak on LowerCape TV’s Peak Time as we discuss the impact of the coronavirus on the Cape and Islands vacation rental market this year.