What is Vrbo Cancellation Policy: A Strategic Guide for Short-Term Rental Hosts?

Updated : Apr 15, 2025

Effective Vrbo cancellation policy management is important to ensure profit maximization and to also ensure that your calendar is booked throughout without frequent gaps. Vrbo has various different cancellation policies and understanding them is crucial for you. 

In this article, we’ll help you understand the various Vrbo cancellation policies and provide strategic tips to manage it effectively. 

What Is Vrbo Cancellation Policy And Your Options?

Vrbo offers considerable flexibility in finalising your cancellation terms. You should choose the Vrbo cancellation policy that fits your property, property’s market position, booking patterns, and the revenue goals that you’ve set for yourself.

You can choose any of these 5 pre-made templates for your property:

1. Relaxed (14/7): Your guests receive a full refund for cancellations 14+ days before check-in and a 50% refund for cancellations 7-14 days before check-in.
2. Moderate (30/14): Your guests receive a full refund for cancellations 30+ days before check-in and a 50% refund for cancellations 14-30 days before check-in.
3. Firm (60/30): Your guests receive a full refund for cancellations 60+ days before check-in and a 50% refund for cancellations 30-60 days before check-in.
4. Strict (60/0): Your guests receive a 50% refund for cancellations 60+ days before check-in; no refund thereafter.
5. No Refund: Your bookings become non-refundable at the time of confirmation.

Each policy also takes into account service fee which is non-refundable unless the cancellation occurs within 24 hours of the booking and atleast 30 days before the check-in date.

Vrbo also lets you customize the cancellation policy according to the following terms: 

1. Refund thresholds: You can control when the refund occurs and also define how much you refund: full, partial, or no refunds based on your booking patterns. 
2. Fee retention: You can specify which bookings’ fees remain non-refundable.
3. Rebooking credits: You can implement credits for booking a future stay rather than refunding the cost of the booking.

How to Cancel a Guest’s Reservation When Necessary

Despite optimal planning, you may occasionally need to cancel reservations. 

Vrbo has implemented a structured process for managing these situations:

1. Navigate to the “Inbox” section in your Vrbo dashboard.
2. Select the specific reservation from your booking list.
3. Click the “Cancel reservation” option.
4. Provide a detailed explanation for your cancellation. You can choose from the following reasons:
   1. Guest needs to cancel
   2. Dates booked on another platform
   3. Conflict with house rules
   4. Natural disaster or property damage
   5. Payment not received
   6. Property sold or new ownership
5. Review the refund calculations based on your established policy. Remember, full refund is automatically initiated for all partner-initiated cancellations except house rule violations and overdue payments.
6. Confirm the cancellation.

Understanding Cancellation Impact on Your Property

When you initiate cancellations, consider these significant implications:

• Your performance metrics: Cancellations negatively affect your property’s search visibility. If you have more cancellations, you likely won’t appear high in search results.
• Your Premier Host status: Excessive cancellations jeopardize your elite program eligibility. If you have more cancellations, it shows that you are an unreliable host which can lead to losing your Premier Host status.
• Your guest reviews: Cancellations frequently generate negative feedback that impacts future bookings. The reason and quantity of cancellations matter. You might not get future bookings if you have high cancellations because your property didn’t match expectations. People might be more forgiving if the cancellation was because of an unavoidable external factor. 
• Financial penalties: Vrbo may impose fees for cancellations outside of extenuating circumstances.

You should know these factors and how they impact your property to understand the importance of each cancellation!

Vrbo Extenuating Circumstances Policy: What You Need to Know

Vrbo maintains a defined extenuating circumstances policy that supersedes your standard cancellation terms. 

Qualifying circumstances include:

• Natural disasters affect your property location.
• Government-mandated travel restrictions.
• Serious illness, injury, or death of guests or immediate family.
• Military deployment or civil unrest.
• Property damage renders your accommodations uninhabitable.

Note that Vrbo, not you as the host, determines the qualification for this policy. Documentation requirements are substantial, and approval is not guaranteed, so you should remain informed about active claims affecting your bookings.

The Vrbo Book with Confidence Guarantee: How It Affects Your Operations

Vrbo’s Book with Confidence Guarantee represents the platform’s consumer protection framework, establishing performance standards you must maintain as a host. 

Every guest that books a stay through Vrbo is automatically eligible for this guarantee.

The Vrbo book with confidence guarantee includes 24/7 support that helps guests with:

1. Gaining access to the property if the guest is unable to book the property upon arrival and the owner is unresponsive. 
2. Payment protection in the unlikely event of fraud or if you, as a host, wrongfully withholds damage deposit.
3. Finding a comparable property if you, as a host, cancel the reservation within 30 days of the stay.
4. Booking a new stay if the property was misrepresented in the listing or if the property requires major repair and the guest is unable to stay there

How to Edit Your Cancellation Policy

Optimizing your cancellation approach requires periodic review and adjustment based on market conditions, seasonal variations, and business objectives. 

You can modify your policy through Vrbo’s interface:

1. Access your property listings through your host dashboard.
2. Select “Policies” from the property management menu.
3. Navigate to the “Cancellation Policy” section.
4. Choose from standard templates or create your custom policy.
5. Save changes and verify implementation.

Strategic Considerations for Your Policy Modifications

When modifying your cancellation policies, evaluate:

• Your competitive positioning: Analyze comparable properties’ policies in your market.
• Your booking patterns: Review historical data on cancellation frequency and timing.
• Seasonal variations: Consider adjusting stringency based on high/low demand periods.
• Marketing impact: Assess how policy changes affect your conversion rates.

You can use PriceLabs Market Dashboard to analyze the entire market using our Custom Comp Sets. 

If you want to only look at your neighborhood or have specific competitors you want to analyze, you can use PriceLabs Neighborhood Data’s competitor calendar. 

PriceLabs Portfolio Analytics will help you understand how your portfolio has been performing which can help you quickly understand your booking patterns and seasonality. 

Consider implementing seasonal policy variations, applying stricter terms during peak periods, and more flexible conditions during shoulder seasons to maximize occupancy year-round.

Understanding Vrbo Refund Policy and Processing for Your Business

When processing refunds through Vrbo, you should understand these key mechanisms:

1. Initial approval: You or Vrbo’s automatic system validates refund eligibility.
2. Payment processing: Refunds are issued through the original payment method.
3. Timeline expectations: Typically, 5-7 business days for completion.
4. Documentation requirements: Transaction records are maintained for verification.

Understanding these procedural elements allows you to set appropriate guest expectations and maintain transparent communication throughout your refund process.

How Can You Prevent Cancellations?

As a professional host, proactive cancellation prevention represents a strategic priority for your revenue optimization.

Implement these evidence-based approaches to reduce your cancellation rates substantially:

Your Pre-Booking Strategies

• Comprehensive listing information: Provide detailed property descriptions to minimize expectation misalignment.
• Transparent communication: Respond promptly to inquiries to establish trust with potential guests.
• Booking barriers: Implement modest security deposit requirements to filter casual browsers.
• Guest screening: Use verification procedures to identify potentially problematic bookings.

Your Post-Booking Engagement Plan

• Confirmation messaging: Send immediate booking acknowledgment to reduce buyer’s remorse.
• Pre-stay communication: Maintain periodic engagement to preserve guest commitment.
• Arrival preparation: Provide detailed check-in and check-out instructions to generate anticipation.
• Value enhancement: Offer additional services to increase the cost of cancellation opportunities.

Conclusion: Optimizing Your Cancellation Strategy

Your cancellation policy management represents a critical revenue optimization lever for your Vrbo properties. You can significantly reduce cancellation impacts through strategic policy selection, clear communication, and proactive guest engagement while maintaining competitive market positioning.

Your optimal approach should balance protection against financial exposure with guest-friendly terms that encourage bookings. Regular analysis of your cancellation metrics, competitive positioning, and guest feedback enables continuous refinement of your cancellation strategy.

By implementing the techniques outlined in this guide, you can develop a cancellation framework that enhances your profitability while delivering a transparent and professional guest experience—ultimately strengthening your position in the competitive short-term rental marketplace.