The guest can cancel the reservation, otherwise the reservation is still active. A flight being delayed or cancelled is not your fault. The guest has to deal with it. Wait for more communication or ask the guest what he/she wants.
@Everett9 if his flight is cancelled his travel insurance should cover the costs associated with your booking, especially if it is outside your cancellation policy. You are not an insurance company so this is not your risk to cover. Stick to your cancellation policy no matter the circumstances. If he didn't buy travel insurance then it's his problem.
Be careful not to offer a refund over and above your cancellation policy because many times a guest will get a full refund from their insurance company plus seek an additional refund from the host.... which doubles their money.