@Daniel1192 You are absolutely doing the right thing by not cancelling for your guest: if you cancel on their behalf, you will be charged penalties and not be elligable for Superhost. This is probably the most important thing you need to know about hosting: NEVER EVER EVER cancel a reservation. If you absolutely have to for some reason, do it through Airbnb to minimize penalties. If you have Instant Book turned on, you can cancel without penalty under certain circumstances, but always contact Airbnb and get them to do it.
You can let the guest know that they should go ahead and cancel, if that's what they wish to do. They will be subject to whatever cancellation policy is in place on your listing, as well as Airbnb's policy.
If they decline to cancel, contact Airbnb about the reservation and explain what's happening. They will contact the guest and get the cancellation completed.