@Colleen47
1. Guests are more reluctant to book with a strict cancellation policy.
2. I believe you are ranked lower in the search results.
A lot of the airdna statistics and rankings were until lately public - it did say that their top property rankings were based on cancellation policy among others. But if you fill up with a strict policy, I see no reason why not.
But it can also happen that some of those who now have booked had saved your place for later and did not notice the change in cancellation policy at the time of booking.