Airbnb Cancellation Policy: An Essential Guide For Hosts & Guests

An Airbnb cancellation policy forms a vital framework that shapes the dynamics of bookings for both hosts and guests. With a range of options catering to different needs and circumstances, these policies influence everything from host revenue management to guest commitment. 

Understanding how these policies work is essential for making informed decisions when booking accommodations or listing properties.

In this guide, we will delve into the intricacies of Airbnb's cancellation policies, exploring their types, implications, and the critical role they play in fostering a balanced and transparent booking experience on the platform.

Why understanding Airbnb cancellation policies is essential

Understanding Airbnb cancellation policies is crucial for both hosts and guests with an Airbnb account as it sets clear expectations and guidelines for handling booking changes and cancellations. Here's why it's essential for both parties:

For hosts

• Financial Impact: Different cancellation policies determine how much compensation hosts receive when a guest cancels a booking. Hosts rely on these bookings for income, and cancellation can potentially lead to lost revenue. Understanding the Airbnb host cancellation policy helps hosts plan their finances and manage their expectations regarding potential cancellations.
• Time and Effort: Hosting involves preparation and possibly blocking off dates for guests. If a guest cancels at the last minute, hosts may have missed out on a potential new booking during that time. A clear Airbnb host cancellation policy encourages guests to make more thoughtful decisions, reducing the likelihood of last-minute cancellations and minimising the disruption to hosts' schedules and Airbnb listings.
• Adjustment Period: Some cancellation policies allow hosts to set stricter policies for peak seasons when demand is high. This flexibility can help hosts protect their revenue during periods when finding replacement bookings might be challenging.

For guests

• Financial Planning: Different cancellation policies affect how much guests are refunded if they need to cancel a booking. Guests who understand these policies can make informed decisions based on their own circumstances, helping them avoid potential financial losses.
• Booking Confidence: Knowing the guest cancellation policy gives guests confidence when booking Airbnb listings. If guests are unsure about their travel plans, they can choose a listing with a more lenient guest cancellation policy or consider purchasing travel insurance to mitigate risks.
• Transparency and Trust: Clear and reasonable cancellation policies contribute to the transparency of the booking process, fostering trust between guests and hosts. When guests feel that the terms are fair, they are more likely to book and maintain a positive perception of Airbnb as a platform.
• Respect for Hosts: Understanding the host's cancellation policy encourages guests to respect their commitment. If guests are aware of the potential impact of their cancellations on hosts, they may be more considerate about their decision to cancel or modify a booking.

The different types of Airbnb cancellation policies

Airbnb offers several types of cancellation policies that hosts can choose from when listing their properties. These policies vary in terms of how much refund guests can receive based on the timing of their cancellations. Here are the main types of Airbnb cancellation policy options:

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

Flexible

The flexible cancellation policy is the most lenient option on Airbnb. Guests can cancel up to 24 hours before check-in or after arrival for a full refund, but hosts won't be paid for canceled nights. 

If guests cancel within 24 hours of check-in, they pay for their stay plus one additional night. This policy is ideal for attracting more guests during low season or if you’re not worried about filling last-minute cancellations.
 

Pros

• Attracts more bookings by offering guests a full refund up to 24 hours before check-in, boosting your booking rate.
• Demonstrates flexibility and a guest-centric approach, which guests appreciate.
• If your property is in high demand, you can handle last-minute cancellations and still fill the dates.

Cons

• Uncertainty about payment until 24 hours before check-in, making it difficult to rebook if they cancel.
• Flexible terms can lead to lost revenue due to the Airbnb cancellation policy.
• Hosts bear all the cancellation risks, while guests can change plans without penalty.

Moderate

Under the moderate Airbnb cancellation policy, guests must cancel at least five days before check-in for a full refund. If they cancel after check-in, they pay for the nights stayed and get a 50% refund for the remaining nights. 

This policy suits hosts with good reviews, attracts serious guests, and provides reasonable cancellation protection. It’s ideal for budget-friendly properties or those with lower minimum night stays.

Pros 

• Attracts more serious guests, reducing last-minute cancellations and increasing booking reliability.
• Balances guest flexibility with host protection against cancellations.
• Provides more financial certainty, compensating hosts for the nights stayed plus one additional night and 50% of unused nights if a cancellation occurs within 5 days.

Cons

• Limited time to rebook if a guest cancels within the 5-day window.
• Compensation for cancellations is less than what a fully booked stay would earn, potentially leading to financial losses.
• Close-to-check-in cancellations can be difficult to fill, especially in less popular areas or during off-peak times.

Firm

The firm Airbnb policy offers strong protection for hosts. Guests must cancel at least 30 days before check-in for a full refund. Cancellations between 30 and 7 days before check-in result in 50% of the booking rate going to the host. 
If canceled within seven days of check-in, the host keeps 100% of the payment. Guests can also cancel within 48 hours of booking for a full refund, provided it’s at least 14 days before check-in.

Pros

• Protects hosts from significant revenue loss due to last-minute cancellations, offering increased financial security.
• Allows hosts ample time to find replacement bookings, reducing the likelihood of vacant dates.
• Provides guests a reasonable window to cancel their travel plans if needed.

Cons

• Limited flexibility for guests, which may deter potential bookings from those preferring more lenient cancellation options.
• Difficult to find replacement guests if a cancellation occurs within 14 days of check-in and less than 48 hours after booking.

Strict

If you choose the Strict Airbnb cancellation policy, your guests can only receive a full refund if they cancel within 48 hours of booking and at least 14 days before check-in. To qualify for a 50% refund, guests need to cancel between 14 and 7 days before they are due to check-in. 

Any cancellations made within seven days of the check-in date entitles the host to retain 100% of the funds. The same rule applies to guests who decide they want to leave Airbnb early. Hosts who want to avoid potential issues with cancellations may consider this cancellation policy and who have properties in areas where accommodation is typically in high demand. 

Pros

• This policy protects hosts against last-minute bookings by allowing them to retain 100% of the cancellation payment within seven days of check-in.
• With the strict Airbnb cancellation policy, hosts have a lot more time to find replacement bookings to ensure healthy occupancy rates.
• Hosts lower their risks of financial loss due to cancellations.

Cons

• Guests may be put off by the stringent cancellation policies in place.
• Properties with these policies tend to rank lower on Airbnb’s listings.

Super Strict (30 Days)

This policy protects hosts against cancellations, ensuring they receive at least 50% of the booking fees if a guest cancels far enough in advance. It also completely shields hosts from losing money on cancellations close to or during the stay. Guests who cancel at least 30 days before check-in are eligible for a 50% refund. Any cancellations made at shorter notice enable the host to keep 100% of the accommodation fees. 

This policy best suits hosts with an established track record of positive reviews and reliable bookings. Airbnb has only made this policy available to those with a history of successful hosting. This policy also lowers the risk of guests becoming problematic as their check-in date approaches. 

Pros

• Hosts retain 100% of the payment if guests cancel within 30 days of check-in, significantly reducing the risk of financial loss from last-minute cancellations.
• These properties usually only attract serious guests who are committed to their plans.
• Hosts can charge higher rates by implementing a strict policy, knowing they are protected against last-minute cancellations, which can enhance overall profitability.

Cons

• The strict terms may discourage potential guests who prefer more lenient cancellation policies, potentially leading to fewer bookings.
• This policy may send guests the message that you’re strict or unfriendly.

Super Strict (60 Days)

The Super Strict (60 Days) cancellation policy on Airbnb, an invitation-only option, offers hosts maximum financial protection against cancellations. Guests must cancel at least 60 days before check-in to receive a 50% refund for all nights booked. If guests cancel within 60 days of check-in, they forfeit the entire payment, meaning the host retains 100% of the booking fees. No unused nights are refunded if a guest cancels after check-in.

This policy is ideal for hosts in high-demand locations, experienced hosts with a strong track record, those prioritizing financial protection over booking volume, and hosts with limited availability due to personal use or other commitments.

Pros

• Hosts keep 100% of the payment if guests cancel within 60 days, reducing financial loss.
• Attracts more committed guests, deterring casual travelers.
• Allows for higher rates, increasing profitability while protecting against cancellations.

Cons

• May deter guests who prefer more flexible policies, reducing bookings.
• Less attractive in competitive markets prioritizing flexibility.
• Strict terms may discourage repeat bookings and recommendations.

Flexible Long-term

The Flexible long-term cancellation policy on Airbnb, applicable to bookings of 28 nights or more, offers key protections for guests and hosts. Guests must cancel at least 30 days before check-in for a full refund. If a guest cancels within 30 days of check-in, the host is paid for the first month of the reservation. 

For early check-outs, hosts are compensated for the nights stayed plus an additional 30 nights. If a guest cancels with less than 30 days remaining, the host receives 100% payment for all remaining nights.

Pros

• Plenty of time to rebook if guests cancel early.
• Full month’s payment if cancellation occurs within 30 days.
• Easier to rebook compared to shorter cancellation windows.

Cons

• Lower earning potential than stricter policies.
• Higher risk of property damage from long-term guests.
• More potential issues with extended stays.

Strict Long-term

The Strict Long-Term Cancellation Policy offers key benefits for hosts. Guests receive a full refund only if they cancel within 48 hours of booking and at least 28 days before check-in. Cancellations between 7 and 14 days before check-in result in hosts receiving 50% of the payment. If guests cancel within seven days of check-in or after check-in, hosts retain 100% of the payment. This policy is ideal for properties in high-demand areas for long-term stays, hosts prioritizing financial stability over attracting casual guests, and those experienced with long-term rentals seeking assured compensation.

Pros

• Hosts receive 100% payment plus 30 extra nights if a guest cancels after 28 days.
• The 28-day cancellation window allows time to find new bookings.
• Strict terms deter close-to-check-in cancellations, ensuring reliable bookings.

Cons

• Limited flexibility may deter some guests.
• Stricter policies might attract fewer long-term guests, especially in competitive markets.
• Long-term guests pose a greater risk of property damage.

How Airbnb cancellation policies work

Airbnb cancellation policies define the rules and guidelines regarding booking changes and cancellations for both guests and hosts. These policies are chosen by hosts when they list their properties and are clearly communicated to guests during the booking process. The cancellation policy in effect at the booking time applies to that reservation. Here's how Airbnb's cancellation policies work:

Airbnb cancellation policy options

The Airbnb cancellation options empower hosts to shape their booking terms. Flexible offers full refunds up to 24 hours before check-in, which is ideal for adaptable plans. Moderate strikes a balance, offering full refunds up to 5 days before, fostering timely decisions. Strict emphasises commitment with a full Airbnb refund up to 30 days prior. Super Strict policy (30/60 days) ensures commitment for longer stays. 

Long-Term caters to extended stays, allowing 48-hour cancellation for a full refund. Strict (14 days) mirrors Strict but within a shorter 14-day period. These policies align host preferences with guest expectations, creating transparent guidelines for cancellations and enhancing the Airbnb experience.

Refund amounts

The Airbnb guest refund policy determines refund amounts based on the timing of cancellations. Flexible refunds of the full accommodation fee if cancelled 24 hours before check-in. Moderate offers a full refund if cancelled five days prior. Strict refunds within 30 days before, deducting the first night's fee and 50% for remaining nights. Super Strict policy (30/60 days) offers a 50% refund if cancelled within 30/60 days. 

The Long-Term Airbnb guest refund policy provides a full refund if cancelled within 48 hours or 30 days before, deducting the first 30 days if cancelled within 30 days of check-in. Refund amounts adjust to reflect host preparation and guest commitment.

Cancellation timing

Airbnb's cancellation policies hinge on timing. Flexible allows cancellations up to 24 hours before check-in for a full refund. Moderate grants flexibility with a full Airbnb refund if cancelled within 5 days prior. Strict demands commitment, offering a full refund if cancelled within 30 days before, minus the first night's fee. Super Strict policy (30/60 days) mandates commitment for longer stays, allowing a 50% refund if cancelled within 30/60 days. 

Long-Term caters to extended stays, permitting a full refund within 48 hours or 30 days prior, deducting the first 30 days if cancelled within 30 days of check-in. Cancellation timing affects the extent of guest reimbursement.

Check-in time

Check-in time serves as a reference point in Airbnb's cancellation policies. Flexible allows cancellations up to 24 hours before the specified check-in time for a full refund. Moderate maintains flexibility, offering a full refund if cancelled within five days before check-in. Strict demands a commitment with a full refund if cancelled within 30 days before, minus the first night's fee. Super Strict (30/60 days) enforces commitment for longer stays, allowing a 50% refund if cancelled within 30/60 days before check-in. 

Long-Term provides flexibility within 48 hours or 30 days before, with the first 30 days non-refundable if cancelled within 30 days of check-in. Check-in time anchors cancellation timelines.

Communication

Airbnb's communication process ensures the execution of cancellation policies. Guests can cancel through the Airbnb platform, and hosts are promptly informed. The chosen cancellation policy dictates the automatic refund calculation. This transparent communication ensures both parties are aware of the cancellation and the associated refund amount. 

Hosts are prepared for possible changes, and guests receive refunds according to the policy's terms. Effective communication guarantees that cancellation procedures are streamlined, fair, and aligned with the chosen cancellation policy, enhancing the overall booking experience on Airbnb.

Extenuating circumstances

The Airbnb extenuating circumstances policy provides a safety net. These exceptional situations, like unexpected illness, natural disasters, or travel restrictions, may override standard policies. If guests or hosts encounter such circumstances, they can consider Airbnb. Airbnb may provide refunds or waive cancellation fees if approved, even if outside the policy's window. 

This compassionate approach acknowledges unpredictable events beyond control. The Airbnb extenuating circumstances policy demonstrates Airbnb's commitment to fairness and flexibility, ensuring that unexpected situations are handled with empathy and understanding, fostering positive guest and host relationships even in challenging times.

Host payouts

Host payouts within Airbnb's cancellation policies are directly tied to the chosen policy's terms. When a guest cancels, the cancellation policy determines how much of the booking fee the host will receive. Policies like Flexible offer full refunds to guests but might impact hosts' earnings. Stricter policies like Strict or Super Strict prioritise host stability by offering partial or no refunds for late cancellations.

Host payouts align with their preferences and the effort they invest, ensuring fair compensation even in case of cancellations while reflecting Airbnb's commitment to both guest and host satisfaction.

Choosing the right Airbnb cancellation policy

Choosing the right cancellation policy is a crucial decision that impacts both hosts and guests. To make an informed choice, consider these steps:

1. Understand Your Property and Target Guests: Analyse your property type, location, and the kind of guests you expect. For example, a vacation rental in a tourist hotspot might benefit from a more lenient policy, while a property suited for business travellers might require a stricter one.
2. Evaluate Risk Tolerance: Consider how comfortable you are with potential cancellations. Stricter policies offer more stability but might deter some guests, while flexible policies attract bookings but carry a higher risk of last-minute cancellations.
3. Factor in Booking Lead Time: If your property often receives last-minute bookings, a more flexible policy could attract these spontaneous guests.
4. Peak Seasons and Events: During high-demand periods or local events, a stricter policy might be prudent to ensure commitment during busy times.
5. Long-Term vs. Short-Term: Different policies suit different lengths of stay. Choose a policy that aligns with your willingness to commit for extended periods.
6. Competitor Analysis: Research what policies similar listings in your area offer to stay competitive.
7. Guest Experience: Consider guest satisfaction. A balanced policy maintains trust and fosters positive experiences.
8. Local Regulations: Be aware of local laws that might impact your policy decisions.
9. Adjustability: Remember that policies can be changed, but be mindful of how it might affect existing bookings.
10. Communication: Clearly communicate your chosen policy in your listing description to avoid surprises for potential guests.

Conclusion

In conclusion, Airbnb's cancellation policies play a pivotal role in shaping the booking experience for both hosts and guests. These policies offer a spectrum of options, ranging from flexible to strict, each catering to different needs and preferences. Hosts must carefully consider factors such as property type, guest expectations, and personal risk tolerance when selecting the right cancellation policy.

For hosts, these policies provide a means to manage their revenue and schedule effectively, ensuring a level of commitment from guests that aligns with their hosting goals. Stricter policies prioritise stability, while more flexible Airbnb cancellation options attract a broader range of bookings.

Guests benefit from transparent guidelines that help them make informed decisions about their reservations, taking into account potential changes to their plans and the associated refund implications.

Airbnb's acknowledgment of extenuating circumstances further demonstrates the platform's commitment to fairness and empathy in unforeseen situations.

Airbnb Cancellation Policy FAQs

How do I choose the best cancellation policy for my listing?

Choose the cancellation policy based on your hosting situation. Flexible attracts more bookings but risks last-minute cancellations, Moderate offers a balanced approach, and Strict provides the most protection but may deter some guests. When deciding, consider your location, demand, and guest preferences.

Is it possible to draw up my own cancellation policy? 

Airbnb does not permit custom cancellation policies. However, you can include specific terms in your house rules for long stays or large groups. Ensure these conditions align with Airbnb’s policies and are clearly stated in your listing description and post-booking messages.

What happens if I need to cancel a reservation?

Hosts should avoid canceling reservations to prevent negative impacts on ranking and reviews. If cancellation is necessary due to double bookings or major disruptions, use the Resolution Center to activate Airbnb's Major Disruptive Events Policy for potential refunds or rebookings. Frequent cancellations may lead to penalties, including account suspension.