What You Need To Know About Airbnb Cancellation Policy

Have you heard the term expect the best and be prepared for the worst? Well with an Airbnb cancellation policy this is true.

In Airbnb and any rental platform, the downside is cancellations. However, many hosts think guests canceling won’t happen to them. The truth is, experiencing a few cancellations is inevitable.

An Airbnb cancellation policy is how many days a guest can cancel their Airbnb reservation with a partial or full refund. This cancellation policy is set by the host who has an option for flexible, moderate, strict, super strict 30 days or super strict 60 days.

Do you know Airbnb provides you with multiple options when it comes to choosing the cancellation policy?

In this article, we will discuss why a guest could potentially cancel, what style of Airbnb cancellation policy you should choose and why. Let’s get started.

What Are The Airbnb Cancellation Policies

Flexible

In Flexible policy, the guests get a complete refund if they cancel at least 24 hours before the check-in time. If the guest cancels the booking in less than 24 hours to check-in, the 1st night will not be refundable. If the guest decides to check out early, the guest can get a refund for nights left 24 hours after the cancellation. It means that if on a four-day booking, you check out after the 1st night itself, the guest will get a refund for Day 3 and Day 4.

Thus, this policy is a bit liberal as compared to others.

Moderate

Under the moderate policy, the guests will get a full refund if they cancel at least five days before the check-in. In case, the guest cancels less than five days before the check-in, the 1st night will be non-refundable. The remaining nights will be refundable at a rate of 50%.

If the guest decides to leave early, he/she will only get a refund of 50% for the nights left, 24 hours after the check-in.

The advantage of this policy is that it is a middle ground for guests as well as hosts. That is why you should prefer this policy once you get a few reviews and gain a reputation on the Airbnb platform.

Strict

In the strict policy, the guests can get a full refund only when they cancel at least 14 days before the check-in date. If the guest cancels between 14 days to 7 days before the check-in date, the refund will be 50%. If the guest cancels after this time, including after the 1st night of stay, there will be no refund.

The strict policy is suitable only for high demand units and should not be construed as a way to make additional money from guests.

Super Strict 30 Days (Invite Only)

We bet the “Invite Only” label has made you curious.

Under this policy, if the guests cancel 30 days before the check-in date, they will get a 50% refund. If they cancel during those 30 days, there will be no refund. Similarly, if the guest checks in and decides to leave early, there will be no refund either.

The policy is suitable for hosts that have a high occupancy rate. Airbnb selects such hosts and invites them to opt for this policy.

Super Strict 60 Days (Invite Only)

The Super Strict 60 Days policy is another Invite only policy.

It entitles the guests to get a 50% refund only if they cancel at least 60 days prior. If they cancel after that deadline, there is no refund. Similarly, if the cancellation happens after the guest’s check-in, there is no refund either.

Long Term

The long-term policy only applies to bookings for 28 nights or more. In case, a booking qualifies under this policy; the guest will not be refunded the amount of the 1st month in case of cancellation. The entire amount is paid to the host. If the guest decides to check out early, they can use an alteration tool online to change the checkout date. However, the guest still has to pay for 30 days after the cancellation date. If the pending portion of the booking is less than 30 days, the guests will not get any refund.

The long-term policy keeps in mind that blocking the dates by a long-term guest can result in loss of bookings, and the host can’t fill up so many dates in a jiffy. The company takes into account the loss of your rental income of the host.

Now that you know different cancellation policies, it is time to look at just one last factor.

How To Choose An Airbnb Cancellation Policy?

The main factor you want to look at is the location of your Airbnb listing. If you live in a location that has high Airbnb traffic all year round, then set your cancellation policy to flexible since it is likely to rebook.

With locations that have a hot/cold season, set your cancellation policy to moderate/strict in the hot season and flexible in the cold season to attract more guests.

Above is the very basic factors regarding an Airbnb cancellation policy. Below are a few more factors to include:

Keep In Mind What Is Refundable:

Irrespective of the policy that you choose, if the guest cancels before the check-in, the Airbnb cleaning fee is refunded. Ontop, the Airbnb service fee is refunded up to 3 times per year if the guest cancels 14 days prior to check-in.

The one thing that varies is the total night per price reservation cost with a cancellation. Depending on the Airbnb cancellation policy and when the reservation is canceled will change how much is refunded to a guest.

Experience On The Airbnb Platform:

When you’re a new host, with no reviews, Airbnb automatically puts you lower in their search results. You haven’t proven yourself yet. For this reason, you might have to choose a lenient cancellation policy at the start.

With a very strict cancellation policy, any guest who is uncertain about plans changing won’t opt-in for your Airbnb listing. A flexible policy will attract more potential travelers.

If you’re a seasoned host and get a high occupancy rate, you can select a strict cancellation policy. It ensures that you get compensation in part for the losses that you incur on cancellations. That is why your experience on the platform matters a lot.

Tip #1 – If business travelers make the bulk of your bookings, you should go with the flexible plan irrespective of your experience or history on the platform. It will allow you to gain more bookings; so, you can earn more.

Seasonality:

You can also choose the cancellation policy according to the season. In the peak season, last-minute cancellations can cost you dearly. That is why; having a strict cancellation policy is advisable.

Similarly, if your Airbnb unit is near a major tourist attraction like Times Square, Eiffel Tower, you will experience demand all year. In that case, as well, a stricter cancellation policy is a must.

Why Would An Airbnb Guest Cancel?

The reason for guests to cancel can be plenty. These can include circumstances like:

You shouldn’t take the cancellations personally. They are part and parcel of running a short-term rentals business.

Check Out Other Articles On Airbnbuniverse.com

How Airbnb Handles Its Fees In Case Of Cancellation?

Under the flexible, moderate, and strict policies, the guest is entitled to Airbnb service fee refund only three times per year. That too, if they cancel 14 days before the check-in date. The strict policy has an additional condition, which states that these 14 days should be within 48 hours of the booking date.

Under the Super Strict 30 days and Super Strict 60 days, there will be a refund for service fees.

Final Thoughts

Thus, now you should be clear with how much a host can gain and how much the guest loses with the Airbnb cancellation policy. It will help you choose the right cancellation policy for your unit.

Are you still confused?

Just use our guide above to know the factors to consider while choosing the cancellation policy. Once you go by that guide, making the right decision will be easy and quick.