Im a new host and today got a request from a guest to cancel. When I went to respond I see that if I click "Cancel" there will be a penelty. WHY? I didn't cancel, they did. If I don't respond, Airbnb will cancel for me but it also says "Standard penalty will apply".
Can someone clarify this police to me. If a guest cancels do we really get penalized?
Yes, it is treated as a host cancellation with all the penalties that incur. Do not do it - if the guests want to cancel, they should cancel from their end. It is them who want to cancel after all and they are trying to trick you into cancel for them to avoid their cancellation fees.