How Does the Airbnb Cancellation Policy Work?

Many hosts and property managers, especially those just starting out, wonder which Airbnb cancellation policy would be the best choice for their business. There are several options to choose from, and it’s necessary for you to understand how each policy works before you start receiving your first bookings. 

What is the Airbnb Cancellation Policy?

The Airbnb cancellation policy is a system overseeing booking cancellations for guests and hosts. Airbnb offers several different types of cancellation policies that vary depending on terms and payout. Read on to learn about the different types of cancellation policies and identify which one best suits your business.

Airbnb Cancellation Options

The following cancellation options are available from Airbnb:

• Flexible
• Moderate
• Long-term
• Strict
• Super strict (30 Days)
• Super strict (60 Days)

An Overview of Airbnb Cancellation Policy Terms

Flexible

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.

Pros:

• Higher ranking in Airbnb’s search engines.
• Greater potential for bookings and keeping your calendar full.
• More flexibility for guests.
• No commitment required from guests.

Cons:

• Hosts are not protected against cancellations.
• Greater chance of revenue loss.
• Hosts take on all the risk.

Moderate

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 Airbnb 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 the check-in date.

If the guest cancels within 5 days of the booking start date, the first night of their stay, as well as the Airbnb service fee, will not be refunded. They will also only receive 50% of the booking fees back. If the guest decides to cancel after checking in, they will receive a 50% refund of the accommodation fees for any remaining nights. However, they will still pay for any nights spent.

Pros:

• Guests can’t cancel at the last minute without financial penalties.
• Hosts are more protected against losses resulting from cancellations. 
• The nature of this cancellation policy may attract more serious guests.

Cons:

• Hosts are still exposed to cancellations within a week of the reservation.
• Hosts will still receive less for the cancellation rebate than for the original booking fee.
• May be hard to find another booking to fill the dates after the cancellation. 

Strict

According to the Airbnb 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 they cancel at least 7 days before the booking begins. They will also receive a refund for the cleaning fee but not the service fee. If the guest cancels a reservation fewer than 7 days in advance, they won’t be eligible for any refund.

Pros:

• Guests are less inclined to cancel a booking due to financial loss.
• Hosts have more time to find a new booking for canceled dates.
• Lower risk of revenue loss from cancellations.

Cons:

• Guests may be less inclined to book a property with this policy.
• Lower visibility in Airbnb’s search results.
• Could lead to a lower overall booking rate.

Long-term

The Airbnb Long-term cancellation policy applies to all reservations that are 28 nights or longer. Guests need to give a 30 day-notice of cancellation to receive a full refund. If the guest cancels within 30 days of the check-in date, they will still need to pay the first month‘s reservation cost.

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.

Pros:

• Hosts have plenty of time to find another booking if a guest cancels.
• Hosts receive a full month’s reimbursement if a guest cancels within 30 days of check-in.
• Hosts don’t need to spend as much time finding new guests and reservations.

Cons:

• Lower earning potential.
• There’s a greater risk of your property sustaining damage by long-term guests.
• Greater chance of problems arising from longer bookings. 

Super Strict 30 Days

This option is only available to seasoned hosts by invitation only. Under the Super Strict 30 Days 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, they forfeit the accommodation fees. Finally, there is no refund given at all if the guest decides to cancel after checking in.

Pros:

• Guests who book properties with this policy are unlikely to cancel.
• Hosts are reimbursed well in the event that guests do cancel.
• There is still plenty of time to find a new booking for the dates if a guest cancels.

Cons:

• Guests may be put off from booking a property with this policy.
• Could lead to a lower overall booking rate.
• Using this policy may create the impression that you are a strict or unfriendly host.

Super Strict 60 Days

The Super Strict 60 Days cancellation policy works roughly the same as the Super Strict 30 Days policy. This option is only available to seasoned hosts and 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 arriving, he/she will receive no refund.

*Both the Super Strict 30 Days and Super Strict 60 Days apply to special circumstances and are by invitation only.

Pros:

• Guests who book properties with this policy are unlikely to cancel.
• Hosts are reimbursed well in the event that guests do cancel.
• There is still plenty of time to find a new booking for the dates if a guest cancels.

Cons:

• Guests may be put off from booking a property with this policy.
• Could lead to a lower overall booking rate.
• Using this policy may create the impression that you are a strict or unfriendly host.

How Has the Airbnb Extenuating Circumstances Policy affected the Cancellation Policies?

The COVID-19 pandemic has caused Airbnb to continuously review its Extenuating Circumstances policy. As of January 20, 2021, guests will not be able to receive a refund for unexpected personal circumstances. These circumstances include:

• Flight delays or cancellations.
• Foreseeable seasonal weather conditions, for example, a hurricane during hurricane season in Florida.
• Unexpected illness or injury.
• Delayed or rescheduled appointments and personal engagements.

The extenuating circumstances policy will still cover large-scale events and circumstances, like:

• Natural disasters such as earthquakes and tsunamis.
• Declared national emergencies, epidemics and pandemics.
• Government-declared travel restrictions or prohibitions. 
• Military actions and other hostilities.

Choosing the Right Policy for Your Listing

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 option 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 the majority of hosts, it’s recommended that you select the Flexible cancellation policy. In light of the ongoing Coronavirus pandemic, this policy is the one that considers guests’ needs the most, especially regarding shifting travel restrictions. Selecting this policy shows that you are willing to be accommodating and offer free cancellation. Guests will appreciate this and will be more likely to book with you, increasing your overall booking rate.

If you have achieved Superhost status or have many bookings under your belt, the Moderate cancellation option might be a good option too. This policy gives a higher chance of you only attracting serious guests who are very unlikely to cancel last minute.

Experienced 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 Host Cancellation Policy

Airbnb strives to ensure a pleasant experience for guests and, therefore, it aims to minimize cancellations by hosts. However, under certain circumstances, you, as a host, might not have other options than to cancel a booking.

If you decide to cancel a booking, a fee deducted by Airbnb will depend on timing and the number of cancellations that you have recently made: 

• If you cancel the booking more than 7 days before the guest’s check-in, Airbnb will deduct $50 from the next payout.
•  If you cancel less than 7 days before check-in, you will have to pay $100 to Airbnb from your next payout. 
• A cancellation fee won’t be applied if you have completed at least 10 consecutive bookings without canceling.

You should keep in mind that when canceling a reservation, the corresponding days will remain blocked in your calendar. 

If you cancel a reservation before the check-in day, Airbnb will publish a review on your listing informing other users that you have canceled one of your reservations. Though you can’t remove this review, you have an opportunity to add a response from your side and provide clarification.  

In certain situations, hosts can cancel a reservation without any penalties. If you can prove that extenuating circumstances or similar conditions beyond your control are preventing you from completing the booking, Airbnb may choose to approve the cancellation without applying a penalty. 

Such extenuating circumstances can include:

• Sudden changes to government travel requirements.
• Government-declared local or national emergencies, epidemics, and pandemics.
• Travel restrictions imposed by a governmental agency that prevents or prohibits travel to or from a listing’s location (this does not include travel advisory warnings).
• Military action or other hostilities.
• Natural disasters. 
• Unauthorized parties or events. 

If you cannot fulfill your booking reservation, you should strive to cancel the reservation in a timely manner to allow guests time to adjust their plans. If you want to cancel a reservation within 24 hours of the check-in time, you will not have the option to cancel online, and will need to contact Airbnb directly. 

Airbnb Guest Refund Policy and Cancellations

Directly related to the Airbnb cancellation policy is the Airbnb refund policy. The Airbnb refund policy identifies scenarios or issues in which guests are eligible to receive a refund. There are several situations where guests may be able to receive a refund from Airbnb:

• Inability to access the accommodation — 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. 
• Incorrect or inaccurate listing details — The information contained in the listing description was incomplete or inaccurate. This could relate to the property’s size, location, number of bedrooms, and amenities. It could also relate to listed amenities and appliances that don’t function as they should or are broken. 
• Health and safety concerns — The accommodation has not been cleaned or contains health and safety hazards, or houses pets or animals that the host did not disclose beforehand. 

If a guest encounters any of these situations, they need to submit a claim to Airbnb within 24 hours. Airbnb will make the final decision about whether or not the guest will be reimbursed or booked alternative accommodation. 

Guests will need to provide evidence supporting their claim, such as photos, videos, and other documentation. They will also need to provide evidence that they tried to contact the host and resolve the matter directly. Airbnb will then review the claim and respond to the guest with their decision. 

Conclusion

Choosing the best Airbnb cancellation policy for your business requires some careful thought and consideration. Thankfully, day-to-day management of your business can be simplified with the help of automation. Vacation rental software, like iGMS, can automate a bunch of your routine hosting tasks, allowing you to focus on growth and scaling, by:

• Creating messaging templates and automating your guest communication.
• Creating templates for guest reviews and automating their send-outs.
• Seamlessly managing all listings from Airbnb, Vrbo, and Booking.com, and importing reservations from other platforms via iCal.
• Organizing all guest messages into a single feed in a unified inbox.
• Creating and assigning tasks to your cleaning team which can be tracked live.
• Managing direct bookings coming from business websites and other channels.
• Processing online payments securely via Stripe integration.
• Tracking business growth and developments with reporting tools.