Airbnb Cancellation Policies | The Ultimate Guide

Airbnb Cancellation Policies | The Ultimate Guide

Airbnb Cancellation Policies help protect guests and hosts both equally. Learn how each policy differs from the others and how your vacation rental business should handle cancellations. These are the details you need to know.

What is the Airbnb Cancellation Policy?

It is a system in place to oversee guest and host cancellations. Depending on the terms and payout, Airbnb has several cancellation policies. Hosts can partially be compensated for cancellations, depending on which cancellation policy they choose. (exact terms also depend on the location of the host)

Airbnb Cancellation Options

Let's examine the different types of cancellation policies on the Airbnb platform and you as the host can determine which one works best for your vacation rental listing.

Flexible Policy

  • The Airbnb Flexible cancellation policy is the most lenient option for guests. In this policy, guests are eligible for a full refund when canceling a reservation at least 24 hours before check-in (local time of the property).
  • If the guest cancels a reservation less than 24 hours before check-in, they will still need to pay for the first night‘s stay, plus the Airbnb service fee.
  • If the guest decides to cancel his/her stay after arriving, he/she is eligible for a full refund for any remaining nights of the reservation.
  • Airbnb's search engines rank this option higher. You have a greater chance of bookings and keeping your calendar full. Because there is no commitment required from guests, and have more flexibility.
  • The downside is that hosts are not protected against cancellations and stand to lose revenue since they bear all the risk.

Moderate Policy

The moderate cancellation policy is the most popular option. It is more restrictive than the Flexible policy but still allows guests a certain amount of flexibility and the opportunity to receive a full refund.

  • With a moderate policy, Airbnb hosts are less susceptible to cancellations. cancellation made at least 5 days before check- in will result in a full refund of the accommodation fees.
  • A guest who cancels their booking within 5 days of the booking start date will forfeit their first night's stay as well as the Airbnb service fee. Additionally, only half of the booking fees will be refunded. For remaining nights in the room, the guest will get a 50% refund if they decide to cancel after checking in. They will, however, be responsible for paying for any nights spent.
  • Guests are prohibited from canceling at the last minute to avoid financial penalties. Hosts are better protected against cancellation losses, and the nature of the cancellation policy may attract more serious guests.
  • Although Hosts are still exposed to cancellations within a week of a reservation, they will still receive a lower cancellation rebate than their original booking fee.
  • If the cancellation occurs, it may be difficult to find another booking to fill the dates.

Strict Policy

  • The Airbnb Strict cancellation policy allows guests to receive a full refund if they cancel within 48 hours of booking and at least 14 days before a listing's check-in time.
  • In the event of a cancellation within 48 hours, the guest is only entitled to 50% refund, regardless of how far out the check-in date is.
  • A 50% refund will also be given if the cancellation takes place at least seven days prior to the booking date. Furthermore, the cleaning fee will be refunded to them, but the service fee is not. Refunds are not available if the guest cancels less than 7 days prior to the arrival date.
  • Due to the potential financial loss, guests cancel fewer bookings, and hosts have more time to find new bookings for canceled dates, thereby lowering revenue loss from cancellations.
  • A property with such a policy may be less likely to be booked, and its visibility in Airbnb search results could be lowered which could lower the overall booking rate.

Long-term Policy

  • All reservations lasting 28 nights or more are subject to Airbnb's long-term cancellation policy. To receive a full refund, guests must cancel 30 days in advance. In case of cancellation, the guest will need to pay the first month's reservation price.
  • Additionally, if the guest decides to check out early during the stay, the guest will have to pay for 30 days following the date of the cancellation or up to the end date of the original reservation.
  • When a guest cancels within 30 days of check-in, hosts receive a full month's reimbursement and do not have to spend as much time finding new guests and making reservations.
  • This has the downside of lower earnings potential because your property is more susceptible to damage by long-term guests, and you will have greater chances of problems arising.

Super Strict 30 Days Policy

Only seasoned hosts are eligible for this option.

  • When a guest cancels a reservation 30 days prior to check-in, there is a 50% refund.
  • The Airbnb guest forfeits the accommodation fee if they cancel less than 30 days before check-in. A guest will not be refunded if they decide to cancel after they have checked in.
  • The majority of guests who book properties with this policy do not cancel, and the hosts are well compensated if they do, as well as there is still plenty of time to find a new booking for the dates if a guest cancels.
  • The disadvantage of this policy is that it discourages guests from booking your property, which could reduce the overall booking rate. Also, it can give the impression that you are an unfriendly or strict host.

Super Strict 60 Days Policy

Only seasoned hosts may access this option, and it is only by invitation.

  • Super Strict 60 Day cancellation policy works similarly to Super Strict 30 Day cancellation policy. The only difference is that the guest must cancel at least 60 days before check-in to receive a refund of 50% on the accommodation fee.
  • When a guest cancels after arriving or less than 60 days before check-in, they are not entitled to a refund.
  • When guests book properties with this policy, they're unlikely to cancel and hosts are compensated well if they do cancel. However, there is still plenty of time to find a replacement guest if a cancellation occurs.
  • The disadvantage of this policy is that it discourages guests from booking your property, which could reduce the overall booking rate. Also, it can give the impression that you are an unfriendly or strict host.

Airbnb Extenuating Circumstances Policy: What It Means For The Cancellation Policy

Airbnb is continually reviewing its Extenuating Circumstances policy in light of the COVID-19 pandemic. The refund policy for unexpected personal circumstances will no longer be in effect as of January 20, 2021. A few examples are as follows:

  • Cancellations or delays of flights
  • Seasonal weather conditions to be expected
  • A sudden illness or injury
  • Personal engagements and appointments that are rescheduled or delayed

However, the extenuating circumstances policy will still cover large-scale events and circumstances, such as the following.

  • Earthquakes and tsunamis are natural disasters.
  • Emergencies, epidemics, and pandemics declared by the government.
  • Government-imposed restrictions or prohibitions on travel.
  • Conflicts involving armed forces and other hostilities.

Choose An Airbnb Cancellation Policy That Works For Your Listing!

When it comes to Airbnb cancellation policies , you need to choose wisely, understanding how it influences your bookings and your rating. Dealing with cancellations is not very pleasant as it leaves you very little time to find a replacement guest or lost revenue. Choosing what works best for your listing will maximize your bookings and your ranking!

Tips for making an informed decision from the industry

  • Choosing the right Airbnb cancellation policy for your business will also lower the risk of dispute that requires intervention from Airbnb’s staff.
  • Most hosts recommend that you choose the Flexible cancellation policy. This policy is ideally suited to guests, especially those whose travel needs have changed following the Coronavirus pandemic. You are showing your flexibility by choosing to offer free cancellation. Your overall booking rate will rise as a result of the increased appreciation of your guests.
  • You may even consider the Moderate cancellation policy option if you have become a Superhost or have successfully completed several hundreds of bookings already. In this way, you are more likely to only attract guests that are very unlikely to cancel at the last minute.
  • The strict cancellation policy is not recommended by experienced hosts. Due to the possibility of changing travel plans, guests often seek greater flexibility. In addition, no matter how early guests notify you of their cancellation, they will not get a full refund. Consequently, this option is unlikely to keep your calendar completely full.

Airbnb Host Cancellation Policy

As part of Airbnb's commitment to providing a pleasant experience for guests, the company strives to minimize host cancellations. There are, however, some circumstances in which you, as a host, might have no choice but to cancel a booking.

Keep in mind that depending on the timing and number of cancellations you have made recently, Airbnb will charge you a fee if you cancel a booking. The following are some negatives of cancellations by hosts:

  • Airbnb will deduct $50 from your next payout if you cancel a booking over 7 days before the guest's check-in.
  • You'll have to pay $100 to Airbnb if you cancel less than 7 days before check-in.
  • Once you have made at least 10 consecutive bookings without canceling, you will not be charged a cancellation fee
  • The corresponding days in your calendar will remain blocked if you cancel a reservation.
  • Airbnb will notify other users that you have canceled a reservation if you cancel before the check-in day. Although you cannot remove this review, you can write a response and explain your side of the story.

Certain host cancellations are not subject to penalties. A cancellation without penalty may be approved by Airbnb if you can prove that you are unable to complete the booking due to extenuating circumstances. The following are examples of such circumstances:

  • Unexpected changes to government travel requirements.
  • Emergency situations, epidemics, and pandemics deemed by the government.
  • Governing agencies that prohibit or limit travel to or from a listing's location (this excludes travel advisory warnings).
  • Military action or other hostilities.
  • Natural disasters.
  • Unauthorized parties or events

Booking reservations must be canceled on time to give guests enough time to adjust their plans, should you be unable to meet them. If you wish to cancel the reservation within 24 hours of the check-in time, you must contact Airbnb directly and will not be able to cancel online.

Airbnb Guest Refund Policy and Cancellations

There is a direct correlation between Airbnb cancellation policy and Airbnb refund policy. There are specific instances or problems for which guests are eligible to receive a refund under Airbnb's policy. Guests may be eligible for Airbnb refunds in the following situations:

Accommodations not accessible

In the event, a host cancels the booking within 24 hours of check-in, changes the reservation details without the consent of the guest, or fails to provide the keys or access code for check-in.

Inaccurate listing information

The listing description contained inaccurate or incomplete information. Various factors might influence this, such as the property's size, location, number of bedrooms, and amenities. A broken or malfunctioning appliance could also be listed as an issue.

Issues related to the health and safety of guests

A host hasn't cleaned the accommodation or disclosed the presence of pets or animals, or the accommodation contains health or safety hazards.

  • Guests need to notify Airbnb within 24 hours if they experience any of these issues. The final decision regarding the guest's refund or accommodation will be made by Airbnb.
  • In addition to photos, videos, and other documentation, guests will be required to provide proof of their claim. The applicants must also show that they made attempts to directly contact and resolve the matter with the host. Following that, Airbnb will investigate the claim and contact the guest with a resolution befitting the situation.

Final Words

A properly formulated Airbnb cancellation policy requires some careful consideration.

Hostaway offers scalable solutions with award-winning support to fast-growing vacation rental property managers! Hostaway is integrated with the biggest and boldest names in the world of vacation rentals and Airbnb ranks among the top channel partners, having been named Airbnb preferred partner in 2021. The group includes more than 200 companies that cater to almost every segment of the travel industry.

Among the solutions offered are:

To learn how Hostaway can help your property management business and unlock your growth potential, schedule a demo call at a time that suits you with one of our product experts.

Ready to find out how Hostaway can transform your business?