The Definitive Guide to setting the Guest Airbnb Cancellation Policies/Policy Types for Hosts (with examples)

,
1

Introduction / Motivation

Airbnb allows hosts to choose the cancellation type they would like to apply to each of their listings. There’s a lot of confusion around this topic for hosts so we’ve put together a handy guide to the guest cancellation policy types and details of each with examples. Please note that as a host, you are free to change the policy type to what you are comfortable with.

These are the terms that apply to all of the cancellation policy types:

  1. If the guest does not check in, cleaning fees are refunded to the guest
  2. The Airbnb service fee is refundable (up to 3 times per year) if the guest cancels before the trip starts
  3. Full reservation costs may be refundable under certain circumstances if cancellation is less than 24 hours before check-in:
  4. If there is a complaint from either the host or the guest, notice must be given to Airbnb within 24 hours of check-in
  5. Airbnb will mediate if necessary and will have final say in all disputes
  6. If a guest clicks the cancellation button on the cancellation page, the reservation will be officially cancelled
  7. IMPORTANT: Cancellation policies can be superseded by the Guest Refund Policy, extenuating circumstances or cancellations by Airbnb for any other reason allowed under the Terms of Service (https://www.airbnb.com/terms/)
  8. Applicable taxes will be retained and remitted by Airbnb

Flexible Cancellation Policy

  1. Guest will receive a full refund on the reservation cost as long as cancellation is more than 24 hours before check-in time  (host’s local time or 3PM local time if check-in time not specified), minus booking fees

Example 1 (Cancellation 1 day before arrival with flexible cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1. Check in time is at 5PM your local time. At 12PM, your local time on December 31, John cancels the Airbnb booking because his plans have changed and he will no longer be travelling.

In this case, as John has cancelled the booking more than 24 hours before check-in (host’s local time), you, the host, will receive no payment. You get :poop: :cry:

Example 2 (Cancellation less than 1 day before arrival with flexible cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1. Check in time is at 5PM your local time. At 12PM your local time on January 1, John cancels the Airbnb booking because his plans have changed and he will no longer be travelling and he does not check-in.
Because John cancelled the booking less than 24 hours of check-in, you will receive the first night reservation cost. However, as John did not check-in, you will not receive the cleaning fee.

Example 3 (Cancellation during the reservation stay with flexible cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1 to Jan 10. John checks in and decides to cut his stay short because the weather is terrible in your city. He cancels the reservation for Thursday, January 7.
Because John checked in, you receive the full cleaning fee. You will also get the reservation cost from January 1 to January 7 (6 days).

Moderate

  1. Guest will receive a full refund on the reservation cost as long as cancellation is more than 5 days before check-in time (host’s local time or 3PM local time if check-in time not specified), minus booking fees

  2. If the guest cancels less than 5 days in advance, the first night is non-refundable but 50% of the reservation cost for the remaining nights will be refunded

  3. If the guest arrives and decides to leave early, 50% of the reservation cost for the nights not spent are refunded but only for the days 24 hours after the cancellation date

Example 1 (Cancellation 5 days before arrival with moderate cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1. Check in time is at 5PM your local time. At 12PM, your local time on December 27, John cancels the Airbnb booking because his plans have changed and he will no longer be travelling.
In this case, as John has cancelled the booking more than 5 days before check-in (host’s local time), you, the host, will receive no payment. You get :poop: :cry:

Example 2 (Cancellation less than 5 days before arrival with moderate cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for Friday, January 1. Check in time is at 5PM your local time. At 12PM your local time on December 29, John cancels the Airbnb booking because his plans have changed and he will no longer be travelling and he does not check-in.
Because John cancelled the booking less than 5 days of check-in (host local time), you will receive 100% of the first night reservation cost and 50% of the remaining nights cost. However, as John did not check-in, you will not receive the cleaning fee.

Example 3 (Cancellation during the reservation stay with moderate cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for Friday, January 1 to Sun, Jan 10. Check in time is at 5PM your local time. John checks in and decides to cut his stay short because the weather is terrible in your city. He cancels the reservation on January 6 at 4:30PM your local time.
Because John checked in, you receive the full cleaning fee. You will also get the full reservation cost from January 1 to January 7 (6 days) and 50% of the remaining days from January 7 to January 10 (3 days).
If John didn’t request the cancellation until 5:03PM on January 6, he would still have to pay for the additional day to January 8 as he requested cancellation after your check-in time of 5PM. Guests are refunded 50% of the remaining nights but only for the days 24 hours after the cancellation date. That means you, the host, get paid for 1 extra night :candy:

Please note that more often than not, guests will ask you to “change” their reservation instead of cancelling it. In this case, if you accept the change (you’re not obligated to), then you won’t be eligible for the cancellation amount, so please remember the difference!

Strict: 50% refund up until 1 week prior to arrival, except fees

  1. Guest will receive 50% refund on the reservation cost if the cancellation is more than 1 week prior to check-in time (host’s local time or 3PM local time if check-in time not specified), minus booking fees
  2. If cancellation is made less than seven days prior to the first day of the reservation (host’s local time or 3PM local time if check-in time not specified), no refund will be given
  3. If the guest arrives and decides to leave early and cancel their reservation, the remaining nights will not be refunded

####Example 1 (Cancellation 7 days before arrival with strict cancellation policy):
You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1 to January 9. Check in time is at 5PM your local time. At 12PM, your local time on December 25, John cancels the Airbnb booking because his plans have changed and he will no longer be travelling.
In this case, as John has cancelled the booking more than 7 days before check-in (host’s local time), you, the host, will receive 50% of the reservation cost (for 8 days). As John did not check-in, you will not receive the cleaning fees.

Example 2 (Cancellation less than 7 days before arrival with strict cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1 to January 9. Check in time is at 5PM your local time. At 6PM your local time on December 25, John cancels the Airbnb booking because his plans have changed and he will no longer be travelling and he does not check-in.
Because John cancelled the booking less than 7 days of check-in (host local time), you will receive 100% of the reservation cost. However, as John did not check-in, you will not receive the cleaning fees.

Example 3 (Cancellation during the reservation stay with strict cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1 to Jan 9. Check in time is at 5PM your local time. John checks in and decides to cut his stay short because the weather is terrible in your city. He cancels the reservation on January 6 at 4:30PM your local time.
Because John checked in, you receive the full cleaning fee. You will also get the full reservation cost from January 1 to January 9.

The date/time of cancellation is irrelevant in this example because no remaining nights will be refunded for a strict cancellation policy.

Please note that more often than not, guests will ask you to “change” their reservation instead of cancelling it. In this case, if you accept the change (you’re not obligated to), then you won’t be eligible for the cancellation amount, so please remember the difference!

Long Term (reservations of 28 nights or more):

  1. Guest pays first month reservation cost if cancellation is requested before check-in time (host’s local time), minus booking fees
  2. If a guest checks in and decides to cancel, the guest must request a new checkout date; regardless of the new checkout date, the guest is required to pay the host for the 30 days following the cancellation date, or up to the end date of the guest’s original reservation if the remaining portion of the original reservation is less than 30 days

Example 1 (Cancellation before arrival with long term cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1 to February 15. John cancels the Airbnb booking before checking in because his plans have changed and he will no longer be travelling.
Because this is a long term cancellation policy, John will need to pay for the first month’s reservation cost. The remaining 15 days will be refunded to John, minus booking fees. You will receive 31 days (the first month, 31 days in January) of the reservation cost. However, because John did not check-in, you will not receive the cleaning fees.

Example 2 (Cancellation during reservation stay with long term cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1 to February 15. John checks in and decides to cut his stay short because the weather is terrible in your city. He cancels on January 5 and requests a new checkout date of January 10.
You will receive the cleaning fees because John checked-in.
You will receive 30 days of the reservation cost following January 5. John will receive a refund for February 10-15 (5 days).
You will also receive the amount from Jan 1 to 5.

Example 3 (Cancellation during reservation stay with long term cancellation policy):

You, the Airbnb host, receive and accept a booking from Airbnb guest John for January 1 to February 27. John checks in and decides to cut his stay short because the weather is terrible in your city. He cancels on January 30 and requests a new checkout date of February 1.
You will receive the cleaning fees because John checked-in. You will receive 30 days of the reservation cost following February 1. Because the period remaining after the new cancellation date is less than 30 days, you will receive payment for the full reservation cost for the remainder of the reservation period (27 days) and nothing will be refunded to John.

Please note that more often than not, guests will ask you to “change” their reservation instead of cancelling it. In this case, if you accept the change (you’re not obligated to), then you won’t be eligible for the cancellation amount, so please remember the difference!

Tips

  • During high season, change the cancellation policy to Moderate / Strict.
  • During low / slow seasons, change the policy to Flexible to entice more guests to book with you.
10 Likes
3

I have twice had guests cancel who didn’t check in. Both times I kept the cleaning fee.

4

It might make sense to be a bit clearer. These are GUEST cancellation policies; not HOST cancellation which have a much higher penalty.

4 Likes
5

I have lost the cleaning fee and was bummed. Tom, your emojis cracked me up!!:poop::poop::poop::joy_cat::+1:t4::+1:t4:

2 Likes
6

That is a bummer. I assumed that I got to keep the cleaning fee because I had cleaned in anticipation of the guests’ arrival.

7

Nope. I had a guest panic day of check in because there was dengue someplace else on the island. Not here. He wanted me to refund and I told him forget it. Air called and tried to get me to refund one night and I told them no. I was paid for the two nights minus the cleaning.

2 Likes
8

Good point, I’ll change that thanks

2 Likes
9

@tom2 Very well done!

10

I had a guest ask us to cancel his booking because we had just joined and didn’t realize the instant booking was turned on, so that was our fault for screwing up. Another person had been messaging us for same dates and we had said okay, but he hadn’t confirmed yet. now the site says were at risk. the first guy is staying long term at really cheap apartment rate for bedroom, bathroom, shared kitchen and living room.

11

@EllenN you wont have to clean for the next guest so you don’t get the cleaning fee for this guest even though you did the cleaning. The logic really is that you’re cleaning up AFTER a guest not FOR a guest. It’s expected that a place be clean for a guests arrival and they shouldn’t have to pay for that. but it’s also expected you’ll have to do some cleanup after them. (I love when guests say, “can you waive the cleaning fee, I’ll clean up myself”–you’re not going to do the laundry, make the beds, scrub the toilet and do it all the way it was done for you… no way… pay the fee or stay somewhere else)

@konacoconutz Guests will ALWAYS try to get the host to cancel for them for any reason they can make up. Until proven otherwise, assume they’re lying. in this case it really is “guilty until proven innocent.”

My Instant Book listings are on strict policy. The logic is this… if You want the privilege of blocking out my calendar and having assurance you have a place to stay, then I have the assurance that I’ll get paid for those nights. If a guest cancels I may have missed out on the opportunity to rebook since my potential guests will have found another accommodation. One can’t assume there are unlimited guests wanting to travel all the time.

In some cases, if I find the guests reasons valid, I will make an offer that if they cancel the booking, I’ll refund a portion of any rebooked nights to them. In some cases the rate I get on a rebook is lower than what they paid (this is how automated pricing works) and I’ll refund 90% of what I get rebooked for the new open nights.

this has happened 3 times in 5 years and it’s a little frustrating having to keep track and remember to compute and offer the refund (this is why I don’t refund the entire amount–I call it an administrative fee, if you will). And there have been several times I simply said no.

Funny enough, sometimes people say “I had to cancel my trip can I get a refund.” “no.” "well, fine, then I’m coming and staying anyway."
ok, so then you didn’t have to cancel your trip you lying bastard!

My new usual response to “I had to cancel my trip, can I get a refund?” is this:
“Certainly, you should put a claim in with your travel insurance company-they’ll be able to pay you back for any covered loses.”

since I’ve started using that line, I’ve NEVER had anyone come back and try to negotiate a refund.

My management company is looking into a partnership with a travel insurance company in which case I’ll just include in my “thanks for booking” message a link to and suggestion that they purchase travel insurance.

Keith

9 Likes
12

This is exactly why I didn’t want to keep the whole amount, even though I was entitled to… “we are coming anyway!”
Their reason was not valid… “We didn’t read your listing and therefore you miscommunicated to use where it is located.” HELLO???

But yes, I like your policy Keith and may do this in the future!

1 Like
13

Please note that this has now been updated under the guest’s booking fees. Airbnb has recently changed their policy so that if a guest cancels, they will now be refunded the booking fees up to 3 times a year. This is a change from the previous policy where Airbnb would not refund booking fees to guests.

2 Likes
14

Good to know, thanks.

15

Good evening,

I am a new host and I was wondering about this comment. We have a very busy season in July/Aug and I am concerned about cancellations during that time. Is there a way to set a different cancellation policy for this season? I have not seen where to do that.

If you change a policy after someone has booked, I assume they still fall under the policy that was in place when they booked?

Thank you,
Elizabeth

1 Like
16

That’s the way people are - lying and cheating all the time. If you don’t make a fuss about this, and just accept people the way they are, all will be well. This does not mean you should accept it if people lie to you.

17

Hi Elizabeth,

Under your listing, on the left hand side, there’s a tab for cancellations. This is where you would change your cancellation type.

Yes if you have already accepted bookings, these will still fall under the cancellation policy which you previously had when those guests booked.

Hope that helps.

1 Like
18

Thanks for the reply! Am I correct though that you can only have one policy running at a time? So if I am in an area that is slow in April I want it at moderate but people are booking for Aug already which I want as Strict. I can’t set up both for different season that I can see.

Thank you,
Elizabeth

19

You can not base your policy on the calendar. All dates have the same cancelation policy.

2 Likes
20

You can only have 1 policy cancellation type per listing so you’ll either have to wait and change it to strict or have it as strict from now onwards.

2 Likes