Airbnb is booming these days, and this is not a surprise for those who use this online platform as hosts and as guests. With so many options and features, Airbnb has become the one-stop shop for accommodation. Hosts that have planned everything well can use their premises to the maximum. However, there are situations when hosts are simply forced to cancel a booking. So, how do Airbnb cancelation policies work? What should Airbnb hosts know about this?
Cancelation policies explained
There are many reasons why hosts might want to cancel a reservation. For instance, they might have to travel abroad during this period. No matter what the reason behind the cancelation is, an Airbnb host can cancel any reservation by visiting their reservations and selecting change or cancel to trigger this process. Even though canceling a reservation is simple, every host should know that such action can lead to some severe consequences. This is especially true if these cancelations are frequent and sudden. It’s good to know that both guests and hosts can cancel a reservation.
WHEN YOU AS A HOST CANCEL A BOOKING - CANCELATION PENALTIES
As a host, you have the right to cancel any booking, but as this will disrupt guests’ plans and impact confidence in the Airbnb community, penalties will apply in some cases.
Cancelation fee calculated every 6 months. You will get $100 less from your next payout if you cancel it less than one week before check-in and $50 if you cancel a reservation more than one week before check-in.
If you cancel a reservation just one day before the check-in, you will get an automated reviewinforming all users that you’ve canceled a reservation in this way. You can always write a public answer explaining yourself but this automate review will always tarnish your profile.
If you cancel on the day of check-in or later, guests can leave a public review on your listing’s profile. Your calendar will stay blocked for this period of time.
You won’t be eligible for Superhost status for 1 year.
And finally, your account will get suspended if you cancel at least three reservations like this in a single year.
Also remember that if your instant booking feature is on, every user can book your property without your consent. During the first month (the trial period), you will have the right to cancel any reservation made in this way without any penalty. After that, you can cancel the reservations without being penalized in case you feel uncomfortable with a reservation. Which translates into the following:
The guest has several unfavorable reviews that concern the host
The guest hasn’t responded to questions the host needs to know about their trip
The guest makes it clear they’ll likely break one of the host’s houses rules, like bringing a pet or smoking
Although these penalties, there are a few exceptions like emergencies or unavoidable circumstances. Some valid circumstances that can help hosts cancel their reservations without consequences are unexpected family deaths or serious illnesses. Injuries, major natural disasters, endemic diseases, unexpected travel restrictions – these are some other valid circumstances for penalty-free cancelations. But you will have to contact Airbnb no later than 14 from the original check-in date.
WHEN GUEST CANCEL THE BOOKING - CANCELATION POLICIES
There are actually four different situations and suitable policies for these situations – long-term (more than 40 days), strict, moderate (5 days) and flexible (1day) cancelation policy.
1. Flexible: for a full refund of accommodation fees, cancellation must be made a full 24 hours prior to listing’s local check in time (or 3:00 PM if not specified) on the day of check-in. If the guest cancels less than 24 hours before check-in, the first night is non-refundable. If the guest arrives and decides to leave early, the accommodation fees for the nights not spent 24 hours after the official cancellation are fully refunded.
2. Moderate: For a full refund of accommodation fees, cancellation must be made five full days prior to listing’s local check in time (or 3:00 PM if not specified) on the day of check-in. If the guest cancels less than 5 days in advance, the first night is non-refundable but 50% of the accommodation fees for remaining nights will be refunded. If the guest arrives and decides to leave early, 50% of the accommodation fees for the nights not spent 24 hours after the cancellation occurs are refunded.
3. Strict: For a 50% refund of accommodation fees, cancellation must be made seven full days before listing’s local check-in time (or 3:00 PM if not specified) on the day of check-in, otherwise no refund. For example, if check-in is on Friday, cancel by Friday of the previous week before check-in time. If the guest cancels less than seven days in advance, the nights not spent are not refunded. If the guest arrives and decides to leave early, the nights not spent are not refunded.
4. Long-term: If the guest books a long-term reservation and decides to cancel the reservation before the start date, the first month of the reservation is paid to the host in full and not refunded to the guest. If the guest books a reservation and decides to cancel the reservation during their stay, the guest must use the online alteration tool in order to agree to a new checkout date. Regardless of the checkout date chosen, 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.
So guests can basically cancel their stay whenever they want but depending on the cancelation policy you have established, they will get charged more or less.
What do we recommend?
If you are starting out on Airbnb, our recommendation is to start with the flexible policy. In the beginning, your main goal is to get as many bookings as possible and a strict or even moderate policy can scare potential guests.
Once your business is established, and you have reached your maximum occupancy rate, you might change from flexible to moderate as this won't make you lose any bookings. The difference between the two policies is that the moderate policy offers the guest only a 50% refund when canceled less than five days before check-in, and a full refund if canceled earlier. The flexible policy provides a full refund if canceled more than a day in advance.
According to Jasper Rivers from Get Paid For Your Pad, cancelations tend to be very low (33 out of 379 which is less than 9%) and from those 33, only 1 was made less than 5 days prior to arrival. So having the moderate policy doesn't make that much of a difference.