I think you are looking for some discussion about business strategy in this case, right? @Mark116 points out that you could just follow the system as it is set up, i.e., to ensure the host is compensated for a cancellation. I suggest you look a little deeper to consider options. What is the probability these guests will book another time or at least visit your area again? In that case, a gesture from you that relates to the future possibility might go a long way for good public relations. You could offer a credit for future a future stay perhaps. Your message might be you acknowledge that they must be disappointed that they had to cancel but encourage them to book at another time using the (small) credit you are givng them. It is another way to look at your business in the long term. Just a thought. Linda