How Does the Airbnb Cancellation Policy Work? [COVID-19 Update]

Due to the coronavirus (COVID-19) outbreak, Airbnb introduced updates to its cancellation policy. Now guests can cancel reservations free of charge. Read the article to learn more about the Airbnb cancellation policy and recent updates to Airbnb’s extenuating circumstances.

Airbnb Cancellation Policy During the Coronavirus Outbreak

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.

As the pandemic starts to affect more countries, Airbnb hosts are faced with a significant increase in cancellations. At first, Airbnb’s Extenuating Circumstances policy only applied to specific locations. However, now it allows travelers from anywhere in the world to cancel reservations.

Airbnb cancelllation policy COVID-19

What Does the New Policy Cover?

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 April 14, 2020. Those reservations will be fully refunded, including Airbnb services fees. The policy doesn’t cover reservations that have already begun.

It also doesn’t cover reservations made after March 14, 2020. The same applies to reservations made on or before March 14, 2020, with a check-in date after April 14, 2020. This means that Airbnb won’t provide any refunds except when either the guest or the host has contracted the coronavirus.

Airbnb claims that hosts can cancel reservations with no charges. Besides, Airbnb will compensate for the service fees and there will be no impact on the Superhost status. 

Hosts and guests don’t need to contact the Airbnb Resolution Center to get refunded when canceling reservations due to the coronavirus (COVID-19). Airbnb encourages both hosts and guests to use the hosting dashboard and the trips page respectively to change or cancel a reservation.

Airbnb Update to the Super Strict Cancellation Policies

Recently Airbnb made temporary alterations to its Super Strict cancellation policies. To ensure there won’t be any challenges in further payment reconciliation, Airbnb placed the following temporary measures: 

  • Hosts no longer have the ability to select the Super Strict cancellations policies. Though listings with these policies will still maintain them, the option to switch to these policies is unavailable for both new and existing listings. 
  • The early payout functionality related to these policies is put on hold. These cancellation policies will still apply to listings with these policies in place (subject to Airbnb’s extenuating circumstances policy and other terms and policies), but Airbnb will no longer send payouts in advance to hosts with these policies. Hosts will receive their payout 24 hours after the scheduled check-in time.
  • 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 host fee by 2%. For previously made reservations that have not yet been paid out, Airbnb will be refunding the additional 2% fee.

How to Manage Cancellations During the COVID-19 Pandemic 

The COVID-19 outbreak has brought new challenges to the travel industry. You, as a host, might already feel frustrated trying to keep up with the number of cancellations.  

While cancellations may happen, experts suggest focusing on occupancy and generating new reservations. Adapting and reviewing your business strategy will help you to stay in the game.

It’s now time to go flexible with your Airbnb cancellation policy. The strict cancellation policy will only deter travelers from making a reservation with you. Consider advertising your property to a new type of audience. For example, you can promote your property as a comfortable place for remote work. Another idea is to target domestic travelers (i.e. people who travel within the same country). 

Take your cleaning to a new level to stay competitive. Ensure that your vacation rental property is perfectly clean and sanitized. 

Also, consider installing an electronic or smart lock to provide self-check-in. Guests will appreciate an opportunity to access your rental without meeting you in person. These measures will help you to offer a safe and risk-free stay for your guests and sustain your business during these uncertain times. 

Airbnb Cancellation Policy Options

Apart from the specific cancellation policy introduced due to the COVID-19 outbreak, Airbnb offers six 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 to help you choose the right option for your Airbnb business.

An Overview of Airbnb Cancellation Policy Terms

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.

Flexible

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).

Airbnb cancellation policy overview

If the guest cancels a reservation less 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.

Moderate

The Moderate cancellation policy is a bit stricter but still gives guests an opportunity to receive a full refund. Under the Moderate cancellation 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, then 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.

Strict

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 less than 7 days in advance, they won’t be eligible for any refund.

Super Strict 30 Days* (Currently unavailable due to COVID-19)

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 less 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.

Super Strict 60 Days* (Currently unavailable due to COVID-19)

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 less 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.

Long-Term

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.

Choosing the Right Airbnb Cancellation Policy for Your Listing

Dealing with cancellations is never fun 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.

Airbnb cancellation policy options

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. 

Airbnb Guest Refund Policy and Cancellations

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:

  1. Inability to access the accommodation. The guest is unable to access the accommodation because the host did not provide the proper keys or security code.
  2. Inaccurate listing details. The listing description was inaccurate. This means it included incorrect information about the property’s type, size or amenities.  
  3. Health and safety concerns. The accommodation has not been cleaned or contains safety or health hazards. 

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.

 

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