I've had this kind of request bunches of times, so I worked out a win-win solution that seems workable. I tell the guest that they can contact Airbnb with proof of illness, and Airbnb will handle their cancellation and refund. Knowing some percentage of these folks are not sick, have no proof, and are just looking for a way out of the booking, I have a back pocket offer, too. I don't want to host someone who doesn't want to be here, especially someone who shows up with a negative attitude after I've declined to cancel with a full refund. So I tell those folks that they should go ahead and cancel, and IF I can rebook those dates, I will refund 90% of the amount I'm able to rebook them for. If I'm not able to rebook those dates, I offer them the equivalent value in a future booking (based on availability, of course). Sometimes they use the credits; sometimes they don't. But they seem happier with a compromise offer than a flat "no," and if they do keep their reservation, there's less risk of having resentful people in the house.