@Leap1,
Based upon the details you've provided, the guest booked a couple of hours ago for 5-night stay that starts today. I'd accept his cancellation policy, because it's not like he blocked your calendar for several days. Plus, the quicker the cancellation is completed the sooner the dates re-open on your calendar. Please note, do not cancel on behalf of the guest, because you will incur a penalty. The guest must submit a cancelation request through his itinerary.