Airbnb bets on ongoing talks with banks to boost business
Ever since Airbnb announced it was suspending all its marketing activities amid numerous cancellations over the Covid-19 pandemic, the sound bites have been increasing in volume.
The rhetoric has reached a crescendo in the past few weeks, as local Airbnb hosts – fearful of what the future holds in the crucial real estate sub sector – have stepped up their dalliance with banks in the hope that lenders will soon extend a recent directive by the Central Bank (CBK), if they are to remain in business.
Central Bank recently directed small and medium enterprises (SMEs) to contact their banks for assessment and restructuring of loans based on their circumstances.
As a result, Airbnb hosts are now betting big on this notice that their lending partners will soon offer a three-month repayment break or possibly more refund holidays to cushion them against the economic disruptions caused by the deadly virus. Their message is a simple one, “It is our only hope now.”
Erick Owaka, a senior Business Development Manager with Alpha Homes and Management, who has seen all bookings from mid-March all the way to July cancelled as a result of the pandemic, believes that the sector’s survival uniquely hinges on structural changes to the banks to conform to their needs at hand.
“Banks are our only hope since occupancy rate is now at zero per cent and short-term clients have cancelled bookings and our corporate clients are putting theirs on hold,” says a distraught Owaka, who has been forced to make 100 per cent reimbursements to clients who had already secured his services only to abandon them for fear of the Coronavirus.
“I had to cancel my reservation for Easter Holidays due to the Covid-19 situation in the country.
I must be responsible and work with the government guidelines on prevention of the virus,” says a distressed vacationer Peter Njoroge who had made reservations in Naivasha with Owaka his host in one of his furnished lodgings.
“I had to cancel my booking to attend my cousin’s wedding in Kilifi and luckily my host refunded the entire amount,” says Millicent Apondi, another distraught vacationer.
Owaka who manages such lodges and accommodations on behalf of developers, estimates to have lost about Sh350,000 for the six annulled bookings from the Sh9,000 daily he charges for his Naivasha-based lodges with most of his clients having reserved between three-days to four-weeks stay. These rates fluctuate depending on the demand and need.