Document in chat that you are willing to give the guest a full refund. Then have the guest call Airbnb and point them to the chat. Airbnb may also contact you to confirm, and then cancel the booking for you.
The only thing in question is whether Airbnb will refund the guest service fee. The policies say that the service fee is not refunded, but a couple of my guests have been able to get a full refund by doing the above.