On March 12, 2020, the World Health Organization (WHO) classified the COVID-19 outbreak as a global pandemic. In response to that, Airbnb updated its coverage under Airbnb’s Extenuating Circumstances policy.
According to the updated policy, travelers can cancel reservations penalty-free. Guests can cancel a reservation for stays and Experiences booked on or before March 14, 2020, with a check-in date between March 14, 2020, and June 30, 2020.
Airbnb claims to refund such reservations fully or issue travel credit for the amount they paid. The policy doesn’t cover reservations that have already begun. Hosts can also cancel reservations within the same time range without any penalty or impact to their Superhost status.
As for reservations with a check-in date after June 30, 2020, they are not covered by the Extenuating Circumstances. The same applies to reservations made after March 14, 2020 — no refunds or travel credits are provided, except when either the guest or the host has contracted COVID-19.
Recently Airbnb made the following temporary alterations to its Super Strict cancellation policies:
Airbnb won’t charge the additional 2% host fee for the Super Strict cancellation policies while early payouts are paused. For reservations with Super Strict cancellation policies made after March 29, Airbnb reduces the hosting fee by 2%. For previously made reservations that have not yet been paid out, Airbnb will be refunding the additional 2% fee.
Hosts are now advised to switch to the Flexible cancellation policy. This option looks the most attractive to guests, especially in these uncertain times. By giving guests more flexibility and peace of mind, hosts are likely to secure more reservations for upcoming months.
In addition to switching to the Flexible cancellation policy, you can make use of other handy strategies to keep your business up and running. Another idea to help you keep your business afloat is to hire vacation rental software. Vacation rental software, such as iGMS, can help you cut down on your operational expenses and optimize your business tasks without a big team in place.
Airbnb offers six standard cancellation policies to choose from. They range from Flexible to Strict 60 Days and protect both hosts and guests.
Although the exact terms of Airbnb cancellation policy options can vary depending on your location, there are some general points that they all have in common. Here is a brief overview of the terms of each of the cancellation policies along with some important factors to consider when choosing the best option for your Airbnb business.
Under every Airbnb cancellation policy, the guest can receive a refund of the Airbnb service fee within 48 hours after booking. The cleaning fees will also be refunded along with the accommodation fees.
The main difference between policies lies in the time before check-in guests can make a cancellation to receive a refund. The amount that will be refunded also varies depending on the type of policy selected.
A flexible cancellation policy is the most lenient option for guests. Under the Flexible cancellation policy, guests are eligible for a full refund when canceling a reservation at least 14 days before check-in.
To receive a full refund of the accommodation fees, the guest must cancel a reservation at least 24 hours before the listing’s local check-in time (as stated in the reservation confirmation email).
If the guest cancels a reservation fewer than 24 hours before check-in, the first night of the stay won’t be refunded. However, the guest will receive a refund for the rest of the booked days.
If the guest decides to cancel his/her stay after check-in, he/she is eligible for a full refund for any remaining nights of the reservation.
The Moderate cancellation policy is the most popular option. It is a bit stricter than the Flexible policy, but still gives guests a certain level of flexibility, and an opportunity to receive a full refund. For hosts, the Moderate policy offers less exposure to cancellations. Under this policy, to receive a full refund of the accommodation fees, the guest must cancel a reservation at least 5 days before check-in.
If the guest cancels within five days of the check-in date, the first night of his/her stay will not be refunded and only 50% of the accommodation fees for the rest of the booked stay will be compensated. If the guest decides to cancel after check-in, they will receive a 50% refund of the accommodation fees for any remaining nights. However, any nights spent will not be refunded.
According to the Strict cancellation policy, guests may receive a full refund if they cancel within 48 hours of booking and at least 14 full days before the listing’s local check-in time. After 48 hours guests are only entitled to a 50% refund regardless of how far the check-in date is.
The guest will also receive a 50% refund of the accommodation fees if he/she cancels a reservation at least 7 days before check-in. If the guest cancels a reservation fewer than 7 days in advance, they won’t be eligible for any refund.
This option is only available to seasoned Airbnb hosts. It is by invitation only. Under the Super Strict 30 Days Airbnb cancellation policy, a 50% refund is given if the guest cancels a reservation at least 30 days before check-in.
If the Airbnb guest decides to cancel when there are fewer than 30 days left until check-in or after check-in, the accommodation fees will not be returned. Finally, there is no refund given at all if the guest decides to cancel after check-in.
The Super Strict 60 Days Airbnb cancellation policy works roughly the same as the Super Strict 30 Days cancellation policy. This option is only available to seasoned Airbnb hosts. It is also by invitation only. The only difference is that the guest must cancel the booking at least 60 days before check-in to receive a 50% refund on the accommodation fees.
If the Airbnb guest decides to cancel when there are fewer than 60 days left until check-in or after check-in, he/she will receive no refund.
*Both the Super Strict 30 Days and Super Strict 60 Days are applied to special circumstances and are by invitation only.
The Long-Term Airbnb cancellation policy applies to all reservations that are 28 nights or longer. Guests are required to give 30 days notice of cancellation to receive a full refund. If the guest cancels within 30 days of the check-in date, then the first month of the reservation is paid to the host.
Additionally, if the guest decides to leave 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.
Dealing with cancellations is a pain for hosts. They can leave you very little time to find a replacement guest or mean the lost revenue. Therefore, you need to choose your Airbnb cancellation policy carefully if you want to maximize your bookings.
Choosing the right policy for your business will lower the risk of a dispute that requires intervention from Airbnb’s staff. Depending on your Airbnb management specifics you might opt for different cancellation policies.
For new hosts, it’s generally recommended that you select the Flexible cancellation policy. This shows that you are willing to accommodate the needs of your guests, which can earn you more bookings.
If you are a Superhost or have many bookings under your belt, the Moderate cancellation policy might be the best option for you. A Moderate cancellation policy gives a higher chance of you only attracting serious guests who are very unlikely to cancel.
Seasoned hosts do not recommend using the Strict cancellation policy. Guests usually look for more flexibility as travel plans might change. Under the Strict cancellation policy guests won’t get a full refund no matter how long in advance they notify you of the cancellation. Thus, this option is unlikely to help you keep your calendar completely full.
At the end of the day, it’s also important to remember that Airbnb always has the final say when it comes to refunds. If you are unable to resolve a dispute with a guest, Airbnb may decide the outcome on your behalf.
As a result, you should also be aware of the Airbnb Guest Refund Policy which may supersede your Airbnb cancellation policy under certain circumstances.
These conditions are related to Travel Issues that the guest might have, including:
If Airbnb determines that the guest has encountered a Travel Issue, then Airbnb will refund the guest on your behalf.
Keep in mind that cases connected with the COVID-19 outbreak are regulated by the new updates to Airbnb’s Extenuating Circumstances.