@Rob28, under no circumstances - except extenuating ones - should you cancel, as the host is heavily penalised (including the days being blocked and unavailable for other bookings).
If the guest doesn't show and doesn't cancel, you'll still be paid. If he does cancel at the last minute, he'll be refunded an amount in accordance with your cancellation policy. (I note that it's set now as 'moderate'. Was it 'flexible' at the time of the booking?)
I'd suggest you opt for a 'strict' policy, and include a Security Deposit in your conditions as well. You may have had exemplary guests so far, but - unfortunately - it takes only one occasion for that to change.