By Olivia Carville and Eric Newcomer

(Bloomberg) --Josh Ostroff had a difficult choice to make: Cancel a trip to Japan in March that he’d been promising his 10-year-old son for three years, or ignore travel warnings and put his family’s health at risk amid the coronavirus outbreak.

He decided to cancel the trip.

When the Toronto-based family asked for their money back, citing the Canadian government’s warning to “exercise a high degree of caution” in Japan, they received a refund from their hotels and a voucher from the airline. Airbnb Inc. said no.

The San Francisco-based startup said the family didn’t qualify for a refund under its new “extenuating circumstances” coronavirus policy, which only applies to China, Italy and South Korea. The home-share company’s official response to the family refers to the U.S. Centers for Disease Control and Prevention: “If the CDC’s precautions are followed, you could safely travel to Japan.”

Ostroff was shocked. “I repeatedly asked about bringing a child into this situation and they did not answer,” he said. “I feel like Airbnb is being recklessly irresponsible here.”

Airbnb, which was founded in 2008 during the financial crisis as a cheaper alternative to hotels, is confronting a second major challenge in the coronavirus. The stakes are higher than ever this time around because this is the year Airbnb wants to debut on the stock market. And with more than 7 million listings across the globe and a private market valuation of $31 billion, Airbnb’s reputation has never mattered more or been under more scrutiny.

The Covid-19 virus, which is now active in more than 100 countries, has hit the travel industry hard. Some airlines have canceled flights to certain countries, hotels have closed and the some of the biggest conferences of the year have been scrapped. Many companies have forbidden international travel and told staff to work from home. On Monday, Booking Holdings Inc., the world’s largest online travel-booking site, withdrew its already bleak first-quarter guidance, citing the worsening impact of the coronavirus.

Navigating the global outbreak is trickier for Airbnb than for big hotel chains or airlines who serve only travellers and manage all of their inventory. Airbnb is a two-way platform, connecting people who want to rent out all or part of their home with travellers seeking accommodations. For every guest cancellation the company approves there is a host at the other end who winds up out of pocket.

In its drive to balance the needs of hosts, who sometimes get their entire income from listing property on the site, against travellers’ concerns, Airbnb -- at least for now -- is putting the onus on hosts to be accommodating, such as by offering refunds or loosening cancellation policies. But that’s leaving a lot of travellers disgruntled and feeling like they’re footing the bill for stays they had no choice but to cancel.

Smart companies strive to protect their reputations, especially when bad things happen outside their control, said Micah Solomon, a customer service expert and author of the book Ignore Your Customers And They’ll Go Away. “This crisis is going to be over sometime,” he said, and when it’s over “you still want to be the go-to place for guests.”

Right now not many guests want to be at an Airbnb. Angry travellers have flooded Twitter with complaints over what many are calling a lack of compassion during a global health emergency. Users have vented about four-day waits to speak to a real person and said the company’s policies are implicitly encouraging them to put their health at risk. One user wrote: “Looks like we have to actually get covid-19 to get a 100% refund from @Airbnb. Talk about mixed incentives.” Another said: “No corporate social responsibility? You’re forcing people to take their trips and possibly spread COVID.”

I really wish that @Airbnb would update the places from which people can cancel with a full refund. This is no longer isolated to a few places in the world. We are now affected in the PNW, and your policies need to account for this. — Dr. Carolyn S. Fish (@cartofish) March 10, 2020

Obviously very bummed we had to cancel our vacation to Paris after all the planning & money we put into it due to #coronavirus concerns.



Shoutout to @Delta, @Marriott & the French travel agencies that ALL fully refunded our bookings.



However, @Airbnb lost a loyal customer... — Kelly Price (@thekellyprice) March 10, 2020

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