Short lets shouldn’t have to give cash refunds, says new trade body

The growing number of companies offering support services to hosts and agencies that operate short lets on Airbnb and similar platforms are facing dire problems thanks to the virus, it is claimed.

The chair of the UK Short Term Accommodation Association, Merilee Karr, has written to the government saying the damage to the new sector is “bordering on catastrophic.’

She adds that there will be long-term implications for the sector if the government doesn’t implement what she calls “the right policies” in a matter of days.

Karr says the UK government should emulate the government of the Netherlands which has introduced

- a measure to cover up to 90 per cent of employee wages for firms who experience revenue reductions of at least 20 per cent, subject to a commitment not to make workers redundant;

- self-employed people being eligible for social assistance up to the guaranteed minimum income level without means testing;

- all businesses granted a deferral on all of their tax payments, including corporation tax, payroll tax, VAT and business rates. 

“If similar measures are implemented in the UK immediately, they could go a long way to avoiding a sector collapse and aid a quicker recovery” she says.

Karr claims that cashflow is the current biggest problem, as almost all guests are cancelling bookings often because they are unable to travel to the UK. 

“It means that short-term rental businesses and the broader travel and hospitality sector are required to issue refunds, draining the businesses of cash” she warns.

She insists that the vast majority of these businesses are entirely viable in a normal environment, but they are facing the prospect of closing due to circumstances entirely outside of their control. 

She wants the European Union’s Directive 2015/2302 on package travel and linked travel arrangements - which covers pre-arranged package holidays and also self-customised packages - amended, to no longer require operators to give cash refunds if travel is restricted. 

“We would encourage the government to coordinate with other European governments and the European Union on a suitable amendment to this Directive, which should also include all travel bookings, not just package bookings” she says, suggesting refunds be issued in the form of vouchers or credits for future use, instead of cash.