- What Airbnb Cancellation Policies Are?
- Fees and Fines for Canceling a Reservation
- Policies Available for Choosing
- How to Choose the Correct Policy?
- Refunds for Guests
Even though it is in the mutual interest of guests and hosts for their bookings to remain uninterpreted, sometimes either side of the process may not have a choice. That is why the platform has introduced some options for canceling your booking, both in case you’re a host or a guest. Today, we will go through the most important points for hosts, allowing you to make an informed choice of your cancellation policies.
What Airbnb Cancellation Policies Are?
As it is a beginner’s guide, it would be logical to start with an introduction. An Airbnb cancellation policy is a set of rules for canceling bookings. The main set of cancellation policies is focused on guests who decide to deny their reservations. The host is able to choose one of the available policies for their guests to follow them.
For hosts, cancellations are possible as well. The rules are fixed for such situations, but they are quite comprehensive, so we will review them in the following section of this article. For now, it is important to mention that you will be able to cancel a reservation if needed, but there will most likely be some penalties for it.
Fees and Fines for Canceling a Reservation
In case a vacation rental owner decides to deny a reservation they have, there will most likely be a fee charged for doing so. Airbnb is doing its best to provide a perfect experience for guests, so it is crucial for the platform to have a low percentage of host cancellations. Therefore, the penalties are quite significant.
For the cases, when you cancel a reservation more than seven days away from the check-in date, the penalty is $50. You will be obliged to pay double the amount ($100) in case you cancel it less than a week before the date. In order to prevent the hosts from abusing the platform, there is also a rule that will not allow you to get another booking for the days of the canceled reservation. Moreover, if you deny a booking before the date, your listing will receive a corresponding label, which might repel some potential guests later.
It is also worth mentioning that you won’t be able to cancel the booking within the last 24 hours before check-in through the platform’s interface as it is extremely inconvenient for the guests. In that case, you will need to contact the support team of Airbnb.
However, there are some cases, in which the above-mentioned fees do not apply. The platform won’t charge you a fee if you had ten successful bookings in a row before the cancellation. However, in that case, you will still receive all the other penalties. Nevertheless, the host cancellation can go smoothly in some circumstances. The list includes legislation updates, emergencies and natural disasters, government interventions, military activities, and unauthorized events. These circumstances are called extenuating, and you can always check up with their up-to-date list on Airbnb.
Policies Available for Choosing
As we have already mentioned, hosts can select different cancellation policies for their listings. Each policy has its own unique features, so we will review them separately, covering both the positives and negatives of each option. It is also important to know that the guests will see the option you’ve chosen for the listing, meaning it might have an impact on their decisions. The shortlist of policies available for choosing goes as follows:
- Flexible Policy
- Moderate Policy
- Strict Policy
- Long-Term Policy
- Super Strict 30 Days Policy
- Super Strict 60 Days Policy.
We will start with the option that is the most beneficial for guests and gradually move towards the most comfortable policy for hosts. Flexible policy is the perfect option for any guest, as it allows them to cancel the reservation at almost any moment without being charged any fees.
To be more specific, cancellations made at least 24 hours before check-in are subject to full refunds. In case the cancellation is made less than a day before check-in, the guest will only have to pay the Airbnb service fee and the price of the first night. What makes this policy even better for visitors is the fact that they can cancel the booking after arriving and still get a full refund for all the remaining nights.
The main advantage of this policy is that selecting it will surely increase your booking rate. The guests will favor such a comfortable option, while the platform ranks listings with Flexible Policy higher than all the others. It may also become your competitive advantage over other similar listings in your area.
Most obviously, the main drawback of the Flexible Policy is the dramatic changes in your schedule it may cause at any moment. With it, you can never be sure about getting the revenue from any of your upcoming bookings, making planning rather hard. Of course, it does not mean you will get every reservation canceled, but you should still be ready to look for new guests for suddenly opened windows in your calendar.
As we’re gradually moving on through the list of available cancellation policies, things are getting a bit harder for guests. With Moderate Policy, they will still be able to get a full refund after denying a reservation. However, the full refund time frame is significantly shorter than with Flexible Policy. To receive a full refund, the guest will need to deny the reservation at least five days before check-in.
In case the guest cancels a booking less than five days before check-in, they will be obliged to pay the full price of the first night and only receive half of the fees refunded. In case the booking is canceled after the arrival, the remaining nights will also be refunded with only 50% of the initial price.
Similar to Flexible Policy, Moderate Policy is still considered beneficial for guests. Thus, you will also be able to receive some additional attention to your listing, in case you choose it. It won’t be the same as with Flexible Policy, but it is still a good choice from the perspective of additional views and bookings you might get.
What is even better, this option grants you more time. Even though it is still extremely hard to find new guests within five days, it is a lot more than what you would have with Flexible Policy. Being able to keep half of the booking fees in the scenario of having a reservation denied by the guests is also a nice feature.
The only significant downside of this option is the small time frame you will have. To find new guests for the opened windows in your calendar, you will likely have to offer extraordinary discounts or simply have your property stand idle until the next booking.
Strict Policy may be a bit less intuitive than the previous options, as it has different rules for different outcomes. According to this policy, a full refund is possible in case the guest manages to call for it within 48 hours after the reservation is made. Another scenario that allows the guest to receive a complete refund implies that the cancellation is made at least two weeks before check-in.
Similarly, there are several situations in which the guest is eligible for a 50% refund. Firstly, the guest may get half of their money back in case they deny the reservation less than two weeks before check-in. Cancellations made less than seven days before check-in are not subject to refunds at all. In case the cancellation is made within 48 hours after the arrival, there will only be a 50% refund no matter how long the booking was.
Strict Policy is obviously more beneficial for the host in terms of flexibility and planning. The risk of any cancellation will be hedged with a 50% refund, and the absolute number of denied reservations will surely be lower. It will be easier to plan your calendar and the revenue will be more stable than with the previous options.
The main downside of Strict Policy is the attitude of guests towards it. Of course, the visitors will prefer options that we have reviewed before, as they will have more flexibility with them. However, it is not the worst option from the visitors’ perspective, so the damage to your booking rate will not be as severe as with the upcoming policies.
As its name implies, Long-Term Policy is specifically designed for long-term bookings. It covers all the bookings that have 28 or more nights in them. With such reservations, a full refund will only be possible in case the call for it is made at least 30 days before check-in. Moreover, the guest will be obliged to cover the reservation fees for the first month of stay.
In case a long-term reservation is broken, the visitors will still need to cover the month to come or all the remaining nights if it is less than a month. In case the reservation is denied within the remaining 30 days, the host also receives the payment for the first month.
Compared to the previous options, Long-Term Policy is very strict for the visitors. However, it is quite reasonable, as finding guests for long periods of time is usually more difficult, and such reservations are often made months prior to check-in. Nevertheless, it is the most flexible option for hosts we have reviewed so far.
The policy itself does not have any significant downsides. There are only the disadvantages of long-term hosting itself that may be a problem. This includes the damage to property, the necessity of providing a better experience and all the other aspects of accepting guests for long periods of time.
Super Strict 30 Days Policy
As its name implies, Super Strict 30 Days Policy is very tough with the guests during the last 30 days before check-in. Within these 30 days and after arriving, the visitor won’t be able to get refunded the accommodation fees. The only refund possible is for cancellations made more than 30 days before check-in, and it will still be only a 50% refund.
With this policy, you will either have a lot of time to find new visitors or still receive the accommodation fees for the whole period of the reservation. After choosing it, you will likely forget about cancellations at all.
The main drawback of this policy is that it’s not really attractive for guests. Visitors usually want to have some flexibility, and this policy grants them almost none of it. It is also worth mentioning that Super Strict 30 Days Policy is only available for seasonal hosts.
Super Strict 60 Days Policy
This option is essentially the same as the previous one. The only difference is that the time frame of a 50% refund is extended to 60 days. Its advantages and drawbacks are also the same. It is only important to add that this policy is exclusively available by invitation.
Extenuating Circumstances for Guests
In some cases, guests can be refunded with no regard to the policy chosen. The extenuating circumstances for guests include delays in flights, sudden health issues, some personal or business schedule changes, and natural disasters.
How to Choose the Correct Policy?
Choosing the policy for your listings should always be individual. Even though every host would love having a super strict policy that would make planning easier and guarantee them a stable workflow, the guests might not be very fond of such an idea. Thus, it is essential to find a balance between your comfort and attractiveness to guests. In most cases, the additional bookings you get for selecting a milder policy will compensate for the costs of having one of the reservations canceled.
Airbnb allows you to change the policy for your listing, which allows you to experiment. Of course, you won’t be able to update the policy for bookings you already have, but you can still try different options until you find the perfect one for your listing. Sometimes, it is even reasonable to select the mildest policies at first, allowing you to get your first reviews and earn some reputation. As soon as you will get enough bookings, you will be able to comfortably switch to a stricter policy.
Refunds for Guests
As Airbnb is seeking a perfect guest experience, the visitors are also eligible to receive refunds in some situations. All these situations are specified in the platform’s rules, but we will still cover them here.
First of all, the guests can get refunded for their reservations, in case they cannot access the premises. This includes cases when the host did not provide all the necessary details, changes some important points in the listing, making the property inaccessible, or if the host canceled the reservation within the last 24 hours before check-in.
The same applies to situations, in which the host made an incorrect description of the property. For example, if you have stated a larger size of the property than it actually is, the guests will be able to easily have their order refunded. Last but not least, the visitors are eligible for a refund in cases when the property may be risky for their health and safety.
In most of the mentioned cases, the guests will have to provide the platform with all the necessary proof before they can get a refund. Moreover, they must contact the host and try to resolve the issue before contacting Airbnb. Thus, as a host, you will get a chance to fix the problems for your guests before the refund happens.