Strict vs flexible cancellation policy

[Inna22]

Hello all,

Has anyone tried to do some research as to the any benefit to one vs the other? For example, tried one and then the other for the same period of time? Or has similar properties and tried running them with different policies? I am assuming one would miss out on some bookings with strict for advance reservations but at the same time would miss out with flexible when the reservation is cancelled at the last minute and either not rebooked or rebooked at the lower rate. I am hoping someone has some data to share.

[Chippy3]

Hey @Inna22 

Great question , the impact of cancellation policies can really vary depending on your market, guest type, and seasonality. I’ve worked with several listings (both my own and others I manage), and here’s what I’ve observed:

Strict Policy

• Pros: More secure income, less risk of last-minute cancellations.

• Cons: Tends to reduce advance bookings, especially from cautious or casual travelers.

• Best For: High-demand areas or unique stays that are harder to rebook last-minute.

Flexible Policy

• Pros: Increases visibility and booking volume, especially for short-notice guests. Airbnb even promotes flexible listings more in search results.

• Cons: Higher risk of last-minute cancellations, and you may have to lower your price to rebook.

What I’ve Seen Work:

• Some hosts use a dynamic approach,  Flexible during low season to attract bookings, and Strict during high-demand periods where rebooking is easy.

• Another option is Moderate, which is a solid middle ground (full refund 5 days before check-in).

If you want data, Airbnb shares performance insights under your Performance > Conversion tab, where you can see how your policy might be affecting bookings. I use iit to run A/B testing.

Hope that helps!

[Inna22]

@Chippy3 haha. You plugged my question into ChatGPT and posted the answer. You know that this is a discussion group where humans share their lived experience, right?

[Trude0]

I’ve been hosting for 5 years, and have always had flexible cancellation policy. I hardly have any cancellations at all. I had a few during covid - naturally. But apart from that, only one cancellation in 5 years. An American. Most of my guests are Europeans, a few Americans/Australians/ Asians - no Swedes. 

My take?:

My target group don’t book and cancel. I assume that others might have a completely different experience - but for me, flexible works very well.