Get started with PriceLabs now!
Want to learn what PriceLabs can do for you? See for yourself with a free trial. Get started now!
Introducing Revenue Accelerator - 30 new features to power your entire revenue strategy.Learn more
Table of contents
Whether you’re a seasoned host or just getting started, understanding Airbnb’s cancellation policies is essential. There are several options to choose from, and it is necessary to understand how each policy works before you start your hosting journey.
What is Airbnb Cancellation Policy?
Cancellation policy of Airbnb is a framework that governs how booking cancellations are handled for both guests and hosts. The platform offers a range of cancellation policies with varying terms and payouts. Understanding these policies is crucial in determining which one best aligns with your hosting business.
Managing multiple cancellation policies can be challenging, but tools like iGMS can simplify your hosting experience. iGMS automates key tasks such as guest communication, cleaning scheduling, and booking changes, enabling you to focus on growing your business while ensuring a seamless guest experience.
Bonus: How to Become an Airbnb Host: The Complete Guide
What Are The Types of Airbnb Cancellation Policies?
Here is a brief overview of cancellation policy of Airbnb you can apply to your short-term vacation rental. To learn more about cancellation policies for your entire hosting business, check out our complete guide to building a cancellation policy for vacation rentals.
There are two general policies that you can choose from depending on the type of stays that you choose to host: Standard Policy and Long-term stay policy.
Standard Policy
In this standard policy, you will have four different options to choose from:
1. Flexible Policy
The Flexible cancellation policy of Airbnb is the most accommodating option for guests. Under this policy, guests can receive a full refund if they cancel their reservation at least 24 hours before check-in (local time of the property). However, hosts will not receive the cleaning fee in such cases.
If a guest cancels less than 24 hours before check-in, they are required to pay for all nights booked, plus one additional night. Should a guest decide to cancel after checking in, they are eligible for a full refund for any remaining nights of their reservation.
| Pros | Cons |
| Higher ranking in Airbnb | Higher risk of cancellation and orphan gaps |
| Flexiblity for guests | Higher risk of revenue loss |
| Greater potential for bookings | You are not protected |
2. Moderate Policy
The Moderate cancellation policy of Airbnb is the most commonly chosen option for Airbnb hosts. It is slightly stricter than the Flexible policy but still provides guests with a reasonable level of flexibility and the opportunity for a full refund. This policy also offers hosts better protection against cancellations.
Under the Moderate policy, guests can receive a full refund of accommodation fees if they cancel at least 5 days before their check-in date. If a guest cancels within 5 days of the booking start date, they will lose the first night’s stay and the Airbnb service fee, receiving only 50% of the booking fees back. Should a guest decide to cancel after checking in, they will get a 50% refund for any remaining nights of their stay, but they will still be responsible for paying for the nights they have already spent.
| Pros | Cons |
| Guests can’t cancel last-minute | You are still open to a week long bookings |
| You are protected against cancellations | Your compensation will be less than your booking fee |
| Higher chance of a full calendar | If a cancellation happens, gap nights will happen |
3. Firm Policy
Under the Firm cancellation policy of Airbnb, guests can obtain a full refund if they cancel their reservation at least 30 days prior to check-in. If they cancel between 7 and 30 days before their check-in date, they will receive a 50% refund.
For cancellations made less than 7 days before check-in, hosts will retain 100% of the payment for all nights booked. This policy strikes a balance between strict and flexible cancellation options.
Guests can receive a full refund if they cancel within 48 hours of booking, provided they do so at least 14 days before their scheduled check-in date.
| Pros | Cons |
| Guests won’t be able to cancel last-minute | A stricter policy, will make guests averse from booking your property |
| If a cancellation happens, you will still have time to get another booking | It does not account for emergencies |
4. Strict Policy
With a Strict cancellation policy Airbnb, guests can get a full refund if they cancel within 48 hours of booking and at least 14 days before check-in. After 48 hours, they’ll only get half their money back, no matter how far the check-in date is.
For cancellations between 7 and 14 days before the trip, guests will receive a 50% refund of the accommodation fees. They’ll also get the cleaning fee back, but not the service fee. If they cancel less than 7 days in advance, they won’t get any refund at all.
For example, if a guest books a $100 per night stay for 5 nights, the total cost would be $500. If they cancel within 48 hours and at least 14 days before check-in, they’ll get the full $500 back. If they cancel after 48 hours, they’ll only get $250 back, even if it’s 2 months before the trip.
If they cancel between 7-14 days before the trip, they’ll get $250 back (50% of the $500 accommodation fees), plus the cleaning fee, but not the service fee. If they cancel less than 7 days out, they’ll lose all $500.
The Strict cancellation policy Airbnb is very inflexible for guests. They have a very short window for a full refund, and after that, they’ll lose a lot of money if they cancel. This policy provides the most protection for hosts against last-minute cancellations.
| Pros | Cons |
| Lower risk of financial loss | Lower visibility in Airbnb |
| Guests would be deincentivized from cancelling | Lower chance of bookings |
Long-Term Stay Policy
Both of these are the same as the ones applied for the standard policy.
1. Firm Long-Term Stay Policy
If you select this policy, it will apply to all reservations of 28 days or longer and will take precedence over your standard cancellation policy of Airbnb for those stays.
To qualify for a full refund, guests must cancel at least 30 days prior to check-in. If a guest cancels after this period, you will receive full payment for all nights stayed, plus an additional 30 nights.
If there are fewer than 30 days left on the reservation when the guest cancels, you will be compensated for all remaining nights.
For example, if a guest books a property for a month at $3,000 and cancels 25 days before check-in, the host will receive payment for all nights stayed plus an additional 30 nights, ensuring a total of $3,000. However, if the guest cancels with only 10 days left, the host will still receive payment for the remaining nights of the reservation, but may miss out on additional bookings during that time.
This policy provides hosts with strong protection against cancellations for long-term stays.
| Pros | Cons |
| It will encourage longer stays | Guests have less flexibility in their stay |
| It clearly outlines refund terms | If guests cancel after the 30-day mark, hosts may lose out on income for nights not booked |
| It provides guaranteed income for a longer-period | It might lead to lesser bookings |
2. Strict Long-Term Policy
With a Strict cancellation policy Airbnb, guests must cancel within 48 hours of booking to receive a full refund, and this cancellation must occur at least 28 days before their scheduled check-in.
If a guest cancels within 28 days of check-in or during their stay, hosts will be compensated 100% for all nights the guest has stayed, plus an additional 30 nights. If a cancellation occurs with fewer than 30 days remaining on the reservation, the host will receive 100% of the booking fee for the nights that are still reserved.
For instance, if a guest books a property for a month at a total cost of $4,000 and cancels 20 days before check-in, the host will receive payment for all nights stayed plus an additional 30 nights, ensuring financial security. However, if the guest cancels with only 10 days left in their reservation, the host will still receive payment for the remaining nights but may lose out on additional income if they cannot fill those nights.
| Pros | Cons |
| You will receive guaranteed income for a significant portion of the reservation | Guests have very little flexibility |
| It will reduce turnover between guests | If guests cancel after the 28-day mark, hosts may lose out on income for nights not booked |
| It provides straightforward guidelines regarding refunds and payments | It might lead to lesser bookings |
Non-Refundable Option
The non-refundable option is a discount you can offer in addition to your other discounts and cancellation policies. This option provides you with enhanced protection against cancellations.
How it works:
- You set your discount, typically 10% off the base price (except in China)
- Your discounted, non-refundable rate appears in search results
- At checkout, guests can either select your standard rate (subject to your cancellation policy) or the discounted, non-refundable rate
- If guests cancel the non-refundable rate, you keep the entire payout for all booked nights, minus the cleaning fee if they cancel before check-in
- The reservation must have a check-out date within 60 days
- The discount applies if the reservation is not booked with a pre-approval or special offer
- Guests may still be able to cancel for a full refund if the reservation is affected by a Major Disruptive Event
Pairing with other cancellation policies:
- Flexible: Non-refundable rate available up to 1 day before desired check-in date
- Moderate: Non-refundable rate available up to 5 days before desired check-in date
- Firm: Non-refundable rate available up to 14 days before desired check-in date
- Strict: Non-refundable rate available up to 14 days before desired check-in date
By offering a non-refundable option, you can provide guests with a discounted rate while securing your income against potential cancellations, giving you greater financial stability and peace of mind as a host.
What are Airbnb Cancellation Fees for Hosts?
As an Airbnb host, it’s important to understand the implications of cancellation fees when you find yourself in a situation where you must cancel a booking. While Airbnb strives to minimize host cancellations, there are times when circumstances may leave you with no choice.
- Cancellation Timing: If you cancel a booking more than seven days before the guest’s check-in date, Airbnb will deduct $50 from your next payout. If you cancel less than seven days before check-in, the fee increases to $100.
- Consecutive Bookings: Once you have successfully completed ten consecutive bookings without any cancellations, you will no longer incur cancellation fees, providing an incentive for consistent hosting.
- Blocked Calendar: When you cancel a reservation, the corresponding dates on your calendar will remain blocked, which could affect your ability to secure new bookings for those dates.
- Notification to Users: If you cancel a reservation before the check-in day, Airbnb will notify other users of the cancellation. While you cannot remove this notification, you have the option to respond and explain your situation.
- Last-Minute Cancellations: If you need to cancel a reservation within 24 hours of check-in, you must contact Airbnb directly, as the online cancellation option will not be available.
How To Choose The Right Airbnb Cancellation Policy?
Choosing the right Airbnb cancellation policy is crucial for hosts, depending on their goals, risk tolerance, and location seasonality. Airbnb offers various options from Flexible to Strict, each with its pros and cons. Flexible policies can attract more bookings but may increase cancellation risk.
Your cancellation policy can impact your booking numbers. A lenient policy may attract more guests but lead to more cancellations, while a stricter policy might deter some guests but result in fewer cancellations. If you’re getting fewer bookings than competitors, compare your policy to similar listings and use tools like PriceLabs’ Market Dashboards to understand market trends.
Transparency is key when communicating your policy to guests. Clearly state your terms in the listing description and reiterate them in pre-check-in communications to set clear expectations.
Consider the guest perspective when setting your policy. While protecting your interests is important, aim to provide a fair experience for your guests. If your policy seems too strict for your property type or location, consider adjusting it to better match your target audience’s expectations.
You can change your cancellation policy anytime, but remember that changes only apply to future bookings, not existing reservations. Always communicate any policy updates clearly to potential guests to avoid misunderstandings.
Conclusion
Airbnb’s cancellation policies significantly impact your hosting business. So, carefully select a policy that suits your needs, communicate it transparently to guests, and be willing to adapt if market conditions or your hosting goals change. Striking the right balance can lead to a rewarding and sustainable hosting experience.
Frequently Asked Questions:
Q1. How many types of Airbnb cancellation policies are there?
There are typically four primary types of Airbnb cancellation policies: Flexible, Moderate, Strict, and Super Strict (30 and 60 Days).
Q2. Can I change my Airbnb cancellation policy?
Yes, you can change your Airbnb cancellation policy at any time. However, changes only apply to future bookings and won’t affect existing reservations.
Q3. Which Airbnb cancellation policy should I choose?
The Airbnb cancellation policy you should choose depends on your hosting goals, risk tolerance, and the market conditions in your area. Consider your circumstances carefully to select the best policy with your hosting strategy.
