@Sara363
You have Instant Booking switched on - that means guests can book without you approving them. Also the dates that the guest booked must have been available.
It is up to you as a host to ensure your calendar is up to date, and that you understand how and when people can book.
You need to cancel the booking - however, if you do this yourself then you will be penalised by AirBnB.
Contact AirBnB and explain what has happend and hope that they will find your guest alternative accommodation and not penalise you.
Finally - put your listing on snooze if you are not ready to take bookings - it is not fair to guests and you will incur penalties each time you cancel.
Good luck