@Georgina181
I believe that in agreeing to the guest refund you have voided your cancellation policy and would not be able to legally reclaim your losses.
A Covid cancellation for 2021? Is that for real or just a “get out of jail for free” card? I think you might have been duped.
For other hosts facing this situation, what has happened is your next bookings will not be paid but instead funds will be held back from you to - as my understanding - to compensate for AirBnb income projections in order to protect their cash flow.
You should be no party to this, and should contact AirBnb and confirm in writing that they WILL be paying your next bookings into your account as normal. Otherwise, if you don’t do this now you will find yourself financing AirBnb cash flow with withheld payments. Cast your inquiries around this CC and Facebook and Internet discussion groups to find that this is a regular irregular practice. You have NO outstanding debt to anybody in your guest cancelling And you should expect payment for your upcoming bookings as they occur.
Don’t wait. Seek confirmation now.