Airbnb Cancellation Policy: Which is Best for You?

Guest cancellations can really mess with your plans as an Airbnb host. Protect your profits with the site's cancellation policy options. Read on to find the right one for you.

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Cancellation Policy Options

Cancellations differ in every market, so choosing the policy to fit your needs is essential. Here are Airbnb's 3 most popular cancellation policies:

• Flexible: Full refund (except fees) if cancelled 1 day prior to check-in.
  
• Moderate: Full refund (except fees) if cancelled 5 days prior to check-in.
  
• Strict: 50% refund (except fees) if cancelled up until 1 week prior to check-in.

Airbnb also offers several more restrictive policies.

• Strict (grace period): Full refund if cancelled within 48 hours of booking.
  
• Super Strict 30 Days: 50% refund if cancelled 30 days prior to check in. (Special circumstances apply, by invitation only.)
  
• Super Strict 60 Days: 50% refund if cancelled 60 days prior to check in. (Special circumstances apply, by invitation only.)
  
• Long Term: First month is not refundable and a 30-day notice is required for cancellation. Applies to reservations of 28 nights or more.

Remember these three things before choosing a policy:

• Cleaning fees are always refunded if the guest did not check in
  
• The Airbnb service fee is always non-refundable
  
• Airbnb will mediate when necessary and has the final say in all disputes

Now that you know the basics, it's time to find the right cancellation policy for your property.

Best Policy for You

The right cancellation depends on several factors, including your experience level, expectations, and even local market.

• For new hosts: As a novice Airbnb host, your goal is to get bookings. A flexible policy allows guests to cancel and only lose the Airbnb fees.

  It may cause you a few empty nights in your space, but the goal in the beginning is to earn bookings and good reviews.

  Tip: If your property is located in an area known for business (like the financial district of a major city), consider a flexible cancellation policy.

  Business travelers are a big part of Airbnb bookings, as companies find cheaper alternatives to hotels. Some employees also feel more comfortable using Airbnb during longer periods away from home.

  Develop a good reputation among these travelers with a flexible policy and reap the rewards.
  

• For seasoned hosts: Once your listing has steady bookings, you can change to a stricter cancellation policy. But only do this if you feel it'll benefit your bottom line. Here are situations where you benefit from a stricter cancellation policy:

  If your local market has a high season (as with many ski or beach areas.) Travelers typically plan these types of seasonal trips well in advance. If they cancel last second, you risk having an empty unit during your peak season.

  If your listing is near a major tourist attraction like Times Square, the Vatican, or the Eiffel Tower. The bigger the attraction, the higher the demand all year-long. You don't want to miss out on profits with a sudden cancellation.

Considering the strict policy? Read on for ways to help out guests who have to cancel their booking.

Handling Cancellations

If you opt for the strict policy and a guest still needs to cancel, you can still work out a reasonable solution. Read on to learn how.

• Option 1: Offer to re-list the property. You can refund what you receive for days that you were able to rebook. The new listings will be at a discounted rate due to the short notice. But the guest who canceled will get some of their money back.

• Option 2: Offer a reduced rate on a future stay. The cancelled guests will appreciate the offer and maybe visit again in the future. And you might be able to re-book your space for the lost days.

On rare occasions, Airbnb may cancel a reservation after a guest arrives. Keep reading to learn why.

Airbnb Cancellations After Guest Arrival

Airbnb has the authority to cancel a booking after the guest arrives for a few reasons, including:

• The property is not as advertised.
  
• Guests cannot access the unit.
  
• Property is unsafe.

If this happens with your property, contact Airbnb for next steps.

Airbnb Resolution Center

If you and your guests can't work out a cancellation issue, turn to Airbnb's resolution center. They will mediate any situation between a host and guest and come to a compromise.

• When your guest needs to cancel: In this situation, make sure to contact the Resolution Center before the guest does. This way you can provide the initial correct information to the mediators.
  TIP: Airbnb's resolution center can offer refunds beyond what your policy allows. If a cancellation is brought to the Resolution Center, make sure you offer a clear picture of what happened.

  Be ready to provide whatever documentation you can. Be reasonable, but remember: this is your business.
  

• When you need to cancel: Hosts should have a good reason for cancelling a booking, like a death in the family or a sudden plumbing issue in the property. A document or photo showing Airbnb that you cannot host during this time will suffice as proof.

  Cancelling a booking will cost you a fee. It can also negatively impact where your listing stands in search results. However, the Resolution Center has the authority to remove negative marks and fees if you provide documentation early.

Bottom Line

The right cancellation policy can make a big difference in your Airbnb listing. But it's best to be reasonable in extenuating circumstances. Remember: negative reviews can affect your business.

That being said, your Airbnb is a business and there is no downside to sticking to your cancellation policy. If you and a guest disagree on an issue, contact Airbnb's resolution center to help mediate.