*Updated 17 October, 2022
There’s a lot to consider when you’re running an Airbnb business, including marketing your vacation rental, setting a dynamic pricing strategy, and deciding on the best Airbnb cancellation policy for your listing.
When you’ve cleaned your vacation rental from top to toe and baked your home-made welcome cookies, it can be very disheartening when you receive an Airbnb cancellation. Unfortunately, guest cancellations feature amongst the common problems encountered by hosts, and that’s where the Airbnb cancellation policy comes in handy.
Airbnb Cancellation Policy – Your Options.
Designed to protect your profits, you can choose from a wide range of Airbnb cancellation policy options, from an Airbnb Flexible cancellation policy, through to an Airbnb Moderate cancellation policy. Or you can get tough and opt for an Airbnb Strict cancellation policy. Check out our brief guide and work out the best cancellation policy for your listing.
If a guest decides to cancel with less than 24 hours to go until check-in then they won’t receive an Airbnb refund for the first night. However, they will be entitled to a refund for the rest of the trip. With the Flexible cancellation policy, guests can also cancel your rental after they have checked-in (receiving a refund for subsequent nights booked).
With this policy, guests are entitled to a full refund if they cancel at least five days before they are due to check-in. If the guest cancels within five days of their check-in date they do not get a refund for their first night. However, they do receive 50% against the rest of the booking. Again, guests can cancel after check-in, and if this happens, they will receive a refund of 50% against any nights they have chosen not to stay.
This Airbnb cancellation policy requires a guest to cancel their booking at least 14 days before their check-in date to get a full refund. If a guest waits longer before canceling (they cancel at least 7 days before they are due to check-in), they will receive a 50% refund on their booking. If the guest cancels within 7 days of their check-in date (or tries to cancel after check-in) they will not receive a refund.
Strict Airbnb Cancellation Policy with Grace Period
Similar to the Strict cancellation policy outlined above, but with an added covenant – your guest has a “grace period” of 48 hours. This means a guest can make a booking, but then has 48 hours to change their mind and rescind it. If they do this then they receive a full Airbnb refund. After 48 hours the normal Strict cancellation policy terms and conditions apply.
Super Strict 30 Days
Not all hosts are given access to this Airbnb cancellation policy (it tends to be offered to more experienced hosts). Under the Super Strict 30 Days cancellation policy, if guests opt to cancel at least 30 days prior to check-in they will be provided with a 50% refund. If the guest cancels within 30 days of their check-in date they won’t get a refund.
Super Strict 60 Days
Similar to the Super Strict 30 Days cancellation policy, not all hosts can access this policy (you need to receive an invite). The 60 Day Super Strict Airbnb cancellation policy indicates that guests must cancel their booking at least 60 days before they are due to check-in in order to receive a 50% refund. If the guest cancels within 60 days of their check-in date, they will receive nothing.
This policy relates to long-term bookings of 28 days or more. In order to receive a refund, the guest needs to inform the host that they intend to cancel the booking at least 30 days in advance. If the guest cancels within 30 days of their check-in date, the host will still receive payment for the first month. If the guest specifies their intended length of stay but then decides to leave, the host is entitled to 30 days of payment.
Which Airbnb Cancellation Policy is Right for You?
If you are keen to accommodate guests and don’t want to impose strict conditions relating to canceling an Airbnb booking, then the Flexible Airbnb cancellation policy could be for you. This option is great for new hosts and those looking to boost bookings. If you are a seasoned host you might prefer to explore other Airbnb cancellation policy options, such as an Airbnb Moderate cancellation policy or even an Airbnb Strict cancellation policy. These tend to rule out guests that are prone to canceling and encourage guests to think twice before revoking their booking. However, most of the experienced hosts do agree that the Strict cancellation policy may deter travelers from booking, as in case of cancellation they are not eligible for a full refund.
Airbnb cancellations can be a real pain. As a host, you will feel as though you have wasted time. Plus you could be left with an empty Airbnb vacation rental for one or more nights. This equates to lost revenue and a lot of frustration. Luckily, cancellations on Airbnb are pretty rare and choosing the most appropriate cancellation policy will provide you with some peace of mind.
Canceling a Reservation as a Host
We’ve covered Airbnb cancellation policy options relating to guest cancellations, but what happens if you need to cancel a booking as a host? Though you have an opportunity to do so, canceling a reservation may have a negative impact on your Airbnb business.
If you do decide to make an Airbnb cancellation you will have to face the following consequences:
- Disappointed guests. Your guests have spent time and effort planning their trip, so understandably they won’t be happy!
- Cancellation fee. If you cancel within 7 days of guest check-in you will be charged a cancellation fee.
- Negative review. You will receive an automated review from Airbnb outlining that they have decided to cancel a guest reservation, and this might put off future guests. Hosts are able to respond and clarify their reasons for the Airbnb cancellation.
- Blocked Calendar. Your calendar will stay blocked and you won’t be able to rent out your property for the same dates of the canceled reservation.
As of August 2022, Airbnb increased its cancellation fees for hosts who cancel fees unnecessarily. The platform will impose fees subject to a minimum cancellation fee of $50 USD and a maximum cancellation fee of $1,000 USD. The fee is based on the reservation amount and when the reservation is canceled:
- If the reservation is canceled 48 hours or less before check-in, or after check-in, the fee is 50% of the reservation amount for the nights not stayed
- If the reservation is canceled more than 48 hours, and 30 days or less, before check-in, the fee is 25% of the reservation amount
- If the reservation is canceled more than 30 days before check-in, the fee is 10% of the reservation amount
When calculating cancellation fees, the reservation amount includes the base rate, cleaning fee, and any pet fees, but excludes taxes and guest fees. If the calculated cancellation fee is less than $50 USD, it will be adjusted up to $50 USD, and if the calculated fee is more than $1,000 USD, it will be adjusted down to $1,000 USD.
Therefore, think twice before canceling a reservation and make sure to have a compelling reason for it, otherwise, expect to deal with unpleasant consequences.