In 10 years of hosting I thought I had seen it all but last weekend I had guests turn up on Saturday and went in. Then another car load came in and I thought they were just in separate cars. Then a text message from the first saying the other lot thought they were booked. Turned out the first lot were a week early. They apologised, as did I , and left and cancelled next weekend’s booking so no harm done. They said something like “Airbnb must have changed our booking” which I doubt but agreed was something to take up with them. The things is they both had Vietnamese names so I hadn’t really noticed when the early arrivers had messaged me a couple of days earlier saying they had expected to receive arrival instructions by then. Lesson learned - check messages against the booking. Even if it only happens once every ten years.
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Why would you cancel the booking? You will be penalized for this. And it’s not your fault. Have Airbnb deal with it and cancel. At some point they may ask to give them a refund but I would give refund based on your cancellation polity
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I read that “they” left and canceled.
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Hopefully the host did not refund the money but probably did.
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And even after doing this for so many years, things still happen to me that haven’t happened before. I love this business. 
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I didn’t cancel it, they did, which is it says in my post. It was within the 1 week so they were refunded.