How Does the Airbnb Cancellation Policy Work? A Full Guide

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.

Managing multiple cancellation policies can be complex, but luckily you can simplify your hosting experience with iGMS. It automates essential tasks like guest communication, scheduling cleanings, and handling booking changes, allowing you to focus on growing your business.

Airbnb Cancellation Options

The following cancellation options are available from Airbnb:

• Flexible
• Moderate
• Firm
• Strict
• Long-term (Strict and Flexible)
• 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). Hosts will also lose out on the cleaning fee.

If the guest cancels a reservation less than 24 hours before check-in, they will still need to pay for each night they stay, and 1 additional night.

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.

Firm

Under the Firm cancellation policy, guests must cancel at least 30 days before check-in to receive a full refund. This policy then allows a 50% refund if your guests cancel between 7 and 30 days before check-in.

If a guest cancels less than seven days before check-in, hosts will still be paid 100% for all nights booked. This is a great halfway mark between strict and flexible cancellation policies.

As an added allowance, guests are also able to get a full refund if they cancel within 48 hours of their reservation, as long as they cancel it at least 14 days before their check-in.

Pros

• Guests have enough flexibility to cancel within a reasonable time frame, while still being unable to cancel at the last minute without financial penalties.
• Hosts are more protected against last-minute financial losses.
• Hosts are afforded enough time to find a replacement booking if a guest cancels within the time frame.

Cons

• Hosts are still exposed to cancellation losses within a month of the reservation.
• It may be hard to find another guest if the cancellation occurs nearer the 7-day pre-check-in mark.

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 between 7 and 14 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 (Strict and Flexible)

The Airbnb Long-term cancellation policy applies to all reservations that are 28 nights or longer. This policy will override your chosen standard cancellation policy once the reservation qualifies as a long-term stay.

Strict long-term

Under the strict long-term cancellation policy, your guests will need to cancel within 48 hours of making their reservation to get a full refund, and the cancellation must occur at least 28 days before check-in.

If a guest cancels within 28 days or during their stay, hosts are paid 100% for all nights stayed, and 30 additional nights.

If there are fewer than 30 days left on a guest’s reservation when they cancel, you will receive 100% of the booking fee for those remaining nights.

Flexible long-term

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. If there are fewer than 30 days left on a guest’s reservation when they cancel, you will receive 100% of the booking fee for those remaining nights.

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 28-30 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. The COVID-19 pandemic has caused Airbnb to continuously review its Extenuating Circumstances policy. As of 31 May 2022, though, the host’s cancellation policy will apply to stays and Airbnb Experiences.

Airbnb will no longer cover COVID-19-related circumstances under the extenuating circumstances policy. The only exception to this is for domestic reservations in South Korea where a guest or Host is infected with COVID-19.

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 it means 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. This policy is the one that considers guests’ needs the most. 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:

As of August 2022, Airbnb increased its cancellation fees for hosts who cancel fees unnecessarily.  The platform will impose fees subject to a minimum cancellation fee of $50 USD and a maximum cancellation fee of $1,000 USD. The fee is based on the reservation amount and when the reservation is canceled:

• If the reservation is canceled 48 hours or less before check-in, or after check-in, the fee is 50% of the reservation amount for the nights not stayed
• If the reservation is canceled more than 48 hours, and 30 days or less, before check-in, the fee is 25% of the reservation amount
• If the reservation is canceled more than 30 days before check-in, the fee is 10% of the reservation amount

When calculating cancellation fees, the reservation amount includes the base rate, cleaning fee, and any pet fees, but excludes taxes and guest fees. If the calculated cancellation fee is less than $50 USD, it will be adjusted up to $50 USD, and if the calculated fee is more than $1,000 USD, it will be adjusted down to $1,000 USD.

Cancellation fees are typically withheld from the next payout(s) to the Host as provided in the Payments Terms of Service. In addition to the fees and consequences set out in this Policy, Hosts who cancel, or are found responsible for a cancellation, will not receive a payout for that reservation, or, if the payout has already been made, the future payouts will be reduced accordingly.

Extenuating circumstances under which hosts can cancel 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.

Final Thoughts

Choosing the best cancellation policy for your business requires some careful thought and consideration. Thankfully, the 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.