Strict cancellation vs. moderate cancellation

[Rishabh10]

Hi, 

I have been a host for just above a year and ever since I started hosting I have used a strict cancellation policy. It has honestly worked quite well so far with minimal cancellations due to the policy. 

However, I have been told by a handful of guests that they would ideally like to book with me but since their itinerary is not confirmed they would rather go for a second-priority listing which has a moderate cancellation policy. 

While I do really like the strict policy, I am worried that I am leaving potential income on the table if guests usually don't cancel with moderate cancellation. 

Any thoughts from hosts who have experimented with both cancellation policies?

Thanks, 

Rishabh

[Denis-Mark0]

Hi @Rishabh10 

I am not willing to be too flexible with my cancellation policies. If you keep in mind that e.g. travel agencies and airlines are not very flexible with cancellation as long as you don't pay extra fees, I don't see any reason to give my guests to much space for cancelling a reservation without having any consequences and ensure a least a part of income for me.

1) You never know if guests already have an insurance giving refunds in case of cancellation. Most better creditcards include such insurances.

2) You never can trust the reason for cancellation. Remember that you can add last-minute discounts to your listing. What if a guest had chosen your apartment prior, noticing later that there's another apartments in your neighborhood offering a better (last-minute) price. He will cancel the reservation with you and take the other one with no consequences.

[Briana1]

Hi Rishabh - 

I think whether or not you have a strict vs moderate cancellation policy depends on where your Airbnb is located. If you have high traffic and no problem getting bookings, then I'd stick with Strict. If you're noticing a slow in bookings and profits, then it's probably time to switch to moderate. One new option is to let guests choose - moderate or strict - when they book. As a host, this is great and here's how I'm using this to make more money:

- Guests who book moderate have to pay full price. I've always had a moderate policy and rarely get last minute cancellations. And when I do, I have ZERO problem rebooking it. But I'm in San Diego where demand is super high. If I were somewhere else, maybe I wouldn't risk it. 

-Guests who choose strict get a 10% discount. So what did I do? I raised all my nightly rates across all properties by 10%. I'm not loosing any money this way, it's more of a psychological thing to get the book to guest and think they are getting a discount. I've had a TON of people choose strict policy because of this. 

That's what I would recommend doing. Try it for a month or two and test it to see if it works. You can always change it if it doesn't. 

By the way, even with a strict policy, guests can still cancel and get a full refund if they make up a "valid" excuse. So in that sense, letting them choose and increasing the likelihood of booking makes more sense. 

Also, the guy above said airlines and travel agencies don't allow cancellations - that simply isn't true - and Airbnb isn't either of those - it's comparable to a hotel - which DO allow cancellations up to 24 hours before for ANY reason. Keep that in mind 😉