Which Airbnb Cancellation Policy is Right for You?

The various Airbnb cancellation policy options were big points of contention last year. As hosts reeled from the effects of the pandemic, guests had to cancel their existing Airbnb bookings. 

As the pandemic dragged on, hosts started becoming suspicious of the excuses that they were hearing again and again. These “buzzwords”, as some started to call them, started to pop up in every cancellation request hosts received. And after nine months of pandemic-control methods, hosts became skeptical of COVID-based excuses.

In this post, we wanted to go through the various cancellation policies offered by Airbnb. We also explain their intricate details, as well as the pros and cons of each. Let’s start with the least strict cancellation policy. 

What Are the Options for My Airbnb Cancellation Policy?

Flexible

Starting with the least strict of all the policies, the Flexible cancellation policy allows the greatest guest freedom. Up until 24 hours before check-in, the guest is entitled to a full refund. If the guest needs to cancel less than 24 hours before check-in, the first night and the Airbnb service fee are non-refundable.

Moderate

With the Moderate cancellation policy, guests qualify for a full refund if they cancel 5 days before their scheduled check-in. If guests cancel within 5 days before check-in, the first night, as well as the service fee and 50% of all nights after that, are non-refundable. If the guest checks in and decides to leave early, the next 24 hours are charged in full, and the following nights included in the booking will be charged at 50%.

Firm

To receive a full refund, guests need to cancel a full 30 days before check-in. If guests cancel between 7 and 14 days before check-in, hosts are entitled to 50% of all of the booked nights. When guests cancel within 7 days of check-in, hosts are entitled to 100% of the booked nights, according to the Firm cancellation policy. Guests can receive a full refund if they cancel within 48 hours of booking provided that the check-in date is more than 14 days in advance.

Strict

The Strict cancellation policy means that guests can cancel up to 48 hours after making the booking, provided that the date of check-in is not within 14 days. To qualify for a 50% discount, guests need to cancel 7 full days before the local check-in time.  No refund will be granted if the guest cancels within 7 days of check-in.

Long Term

Long-term bookings offer hosts the opportunity to gain a solid income for a set period without handling multiple guests. Airbnb automatically applied this policy to bookings of 28 days or more. These bookings are fully refundable if a guest decides to cancel within 48 hours after booking confirmation, provided that the cancellation occurs at least 28 days before check-in. If the guest cancels within 28 days of check-in, the first month of the booking and the booking fee are both non-refundable. 

Guests can cancel long-term stays and choose a new check-out date after they have checked in. However, the guest is required to pay the host for the next 30 days. If the rest of the original booking is fewer than 30 days, the guest must pay their remaining stay in full.

Super Strict 30 Days

For a 50% refund, guests must cancel a minimum of 30 full days before check-in. If a guest cancels at any point within 30 days before check-in, the booked nights will not be refunded. If the guest checks in and leaves early, none of the nights stayed, nor the remaining nights will be refunded by Airbnb.

Super Strict 60 Days

For a 50% refund, guests must cancel no less than 60 days before check-in. When a guest cancels within 60 days of the scheduled local check-in time, the booked nights will not be refunded. The nights not stayed will not be refunded if the guest leaves early.

What Are the Benefits of A Lenient vs Stricter Airbnb Cancellation Policy?

With any discussion, there are two sides to the story. For guests, more lenient policies are better. For hosts, stricter policies are better. 

At the pandemic’s start, hosts with a Flexible or Moderate booking cancellation policy often benefited from higher booking rates. This was due to the uncertainty around COVID and regional travel restrictions. Airbnb users were hesitant to book listings with Strict booking cancellation policies. They did not want to lose out on money. 

Now, almost a year after the global outbreak, hosts are starting to tighten up their cancellation policies. They want to protect themselves against disingenuous pandemic-based excuses.  

The benefit, or rather benefit, of a more lenient cancellation policy, is that it attracts more bookings. Having a more flexible cancellation policy gives your guests greater freedom, but the consequences are harsher on the host.

As a host, the main consequence of Flexible booking cancellation policies is that you could miss out on revenue. If your dates are booked and you’re forced to give a full refund at the last minute, it’s highly unlikely that you’ll find another booking within 24 hours. 

Please keep in mind that Airbnb will not enforce your booking cancellation policy if there are extenuating circumstances and the guest can prove it.

Examples of ‘Extenuating Circumstances

As we just mentioned, Airbnb has a specific extenuating circumstances policy that may override the standard Airbnb host cancellation policy. Under the Airbnb extenuating circumstances policy, if a guest provides valid proof of situations like a death certificate or evidence of travel restrictions, Airbnb may not enforce the usual cancellation terms. In such cases, the guest may receive a full refund, excluding the booking fees and service charges.

Extenuating circumstances include:

• Death or serious illness of a member of the traveling party or their immediate family

• Serious injury that prohibits the guest from traveling

• Natural disasters or serious weather incidents in the location of your listing or the guest’s place of departure

• Government-decreed obligations issued after the date of booking

• Urgent travel restrictions and security advisories

• Endemic or pandemic disease outbreak

When such a cancellation occurs due to these reasons, Airbnb’s policy might calculate the cancellation fee differently, often waiving it entirely. This means guests must cancel online providing the necessary documentation to potentially receive a full refund. The canceled dates are then made available again on the platform.

Given this flexibility in calculating cancellation fees, some hosts are inclined to choose stricter Airbnb cancellation options. They feel this approach balances out the risk of guests canceling under the extenuating circumstances policy. However, it’s important for both hosts and guests to thoroughly understand the Airbnb cancellation policy terms before making or accepting a booking reservation.

Furthermore, if a guest cancels a reservation without such extenuating circumstances, the standard Airbnb refund policy applies. This could include partial refunds based on the timing of the cancellation, the length of the stay (nights spent and nights remaining), and any applicable guest fees or cleaning fees. The maximum cancellation fee is usually detailed in the reservation details, ensuring transparency for both parties.

Remember the Airbnb Guest Refund Policy

As of December 2019, Airbnb instated the Guest Refund Policy. Airbnb defines this policy as being “available to Guests who book and pay for an Accommodation through the Airbnb Platform and suffer a Travel Issue.” 

The Airbnb Guest Refund Policy is a policy that protects the guest if the host cancels at the last minute or misrepresents their listing in some way. According to the Airbnb Help Center, a guest is covered under the Guest Refund Policy if any of the below apply:

• The guest could not gain access to the listing. 

• The space is not clean or safe upon the guest’s arrival.

• “Key amenities” are either not working or missing altogether. This covers things like undeclared construction work prohibiting you from using an amenity or facility. 

• The listing is not as it was described in the listing description. For example, the number of bedrooms quoted is wrong, or the listing is not wheelchair accessible.

Which Airbnb Cancellation Policy Do We Recommend?

If we leave you with one thought, remember that your cancellation policy is completely your choice, but it’s a balance. Opting for a Strict cancellation policy might deter some guests, as the calculated cancellation fee can be high and there’s often no free cancellation window. On the other hand, a Flexible policy could mean more free cancellations but might cost you in terms of lost revenue, especially if a guest cancels close to the check-in date.

Consider a Moderate booking cancellation policy as a middle ground. It typically involves a minimum cancellation fee, allowing for some flexibility for guests while protecting your income. This policy usually gives guests the chance for a full refund if they cancel within a set period before check-in, reducing the risk of lost income from last-minute cancellations.

Also, think about the additional fees that can be part of the reservation, like cleaning fees or pet fees. These are often not refundable if the guest cancels after the free cancellation period. In case of a cancellation, while you might keep the cleaning fee, the revenue for the remaining nights and the nights spent (if any) could be lost.

Our advice? Use the Moderate policy and consider signing up with tools like DPGO. They can help you maximize your revenue by selling those last-minute cancellation days. This way, even if a guest cancels, you have a better chance of filling those dates again quickly.

How Can DPGO Help?

Our users enjoy a range of features and functionalities but by far the most advantageous aspect is our ability to increase occupancy rates and associated revenue. By collecting, analyzing, and utilizing the latest in local market data, our automated dynamic pricing system replaces your prices daily with demand-driven figures. This ensures that you get more money for every confirmed booking.

Do you want to try DPGO for 30 days for FREE? Then head over to our website to register! You don’t need to enter your credit card details when you sign up and you can cancel your profile at any time at no cost. Start your journey with DPGO now and enjoy higher occupancy rates and associated revenue.