Choosing Cancellation Policy - Any Advice?

[Huma0]

I have always had a Moderate cancellation policy, but this week I had two separate bookings cancelled right before the five day period kicked in, and I mean one of them cancelled only two hours before this, so they both got full refunds.

This is annoying for a couple of reasons. Firstly, it's high season and I could have booked those rooms several times over, but I doubt they'll get booked now at such short notice.

Secondly, if the guests had given me good reason to cancel, that would have been okay, but they didn't. One cancelled because he wanted to leave his bags here for a day after check out and I couldn't accommodate this becuse I will be at work. I had not promised to store his bags, quite the opposite. I had refused to accept the booking until he confirmed he understood that I couldn't guarantee to do so.

Now I am thinking of changing to a Strict cancellation policy, but I wonder if this is going to put guests off booking. If there was something inbetween Moderate and Strict, e.g. giving guests a full refund up to 10 days before check in, I would, but there isn't.

I'd love to hear from hosts who use the Strict policy and how it works for them. Do you think you get less bookings as a result? Is it generally problem free, or do you get a lot of guests trying to use the Resolution Centre/Extenuating Circumstances etc. to get refunds?

Many thanks!

[David126]

I have moderate but I do not think I would go strict.

Most of my stays are short, do not have that many cancellations short term and many that are seem to be extenuating circumstances, funny that.

Trouble is whatever your polcy you have no idea if it will be enforced.

[Eva790]

They could make cancellations easier.  I am not a computer person, so after many hours of searching for a way to cancel, I just gave up.   I certainly won't think of using airbnb again...

[Kate157]

Hi @Huma0 also have moderate cancellation. One of the reasons is that when I am traveling, I always make sure this is the kind of policy the place has before I book. I think it's a fair policy, so it's what I use. Having said this, I had two cancellations this month which leave a huge hole in my bookings in the middle of August. I won't change my policy, though. I still think it's the fair one.

[Huma0]

Thanks @Kate157. Yes, it seem fair to me, which is why I chose it. It's just annoying when guests wait right up until the 5 day cut off to cancel. Perhaps I'm being paranoid, but I don't think it's a coincidence that they cancelled at that exact time.

There does seem to be a huge leap between Moderate and Strict. Guests can either get a full refund even if they cancel as little as five days before a booking, or you can choose a policy where they'll never get a full refund even if they give you months of notice.

I think it would be useful to have something inbetween.

[Ange2]

@Huma0     STRICT Policy is 50% refund up until 1 week prior to arrival.  If they cancel before 7 days they will always get 50% back  even with a Strict Policy (only the 28 days plus reservation policy is non-refundable across the board).   If I have guests cancel before two or three weeks in advance or if I have a lot of inquiries for the same dates I always give them 100% back whatever their excuse.

I think it really depends on the hosts business model. Some can suck it up others can't.  Even hotels have non-refundable policies.  I read that it is becoming more common place these days or the introduction of a 25% plus cancellation fees.

[Ange2]

@Huma0   I have a strict policy  not sure if it has affected my bookings, possibly as I am seeing less requests these days.  A guest can filter on "Refund Policy" to find fully refundable listings  "Find homes that still offer a full refund if you cancel" moderate and flexible are lumped together here.   Of course mine does not show up at all.

I think for hosts who only accept short term stays it works out better,  the loss is minimal,  but for reservations of a week or more and at peak season a cancellation is a 100% loss and tough to recoup at such late notice.  While I was testing refundable policy I seemed to attract more time-wasters, trolls and spam for week or longer stays (maybe conincidence, maybe not).  After a recent cancellation,  while I was testing refundable policy,  Airbnb said if I give a 10% discount it would send email to a "select group of travellers" looking for the cancelled  dates -  no takers so far.    See screenshot below.

btw: I do give full refunds at times I just prefer not to advertise it as, in my experience,  it seems to attract more irresponsible people.

[Farah1]

@Huma0 my cancellation policy is strict since I started hosting about 4 years ago. It works well for me and I do not really feel that it affect booking, fortunately my place is always fairly busy every month (including low season). 🙂

[Huma0]

Thanks everyone for the advice so far. There seem to be very valid points both for and against switching to a strict policy.

@Ange2 I think it fair that a guest should pay at least part of the costs if they cancel quite last minute. My problem with the Strict policy is that even if a guest cancels three months in advance, they would lose 50% of their money, which could be a lot if they are staying for a few days or more and when you take into account the Airbnb fees they pay.

As a guest, that kind of cancellation policy might put me off, especially when there are lots of hosts offering more flexible ones. Personally, I would be happy to book a listing with a strict policy if it was quite last minute, but wary of booking one too far in advance.

Of course most hotels, travel agents and tour companies will keep a percentage if a guest cancels after a booking is confirmed, but at what stage does that become 50%?

[Farah1]

@Huma0 You have the option to give a full refund (issue the rest 50%) if you want to. I've done this before.

[Dora46]

Hi Farah, when a guest cancel a booking, me as a Host with strict policies, do I get any money back?

[Farah1]

@Dora46 if the guest cancels more than 7 days before check-in day, you get 50%. If the guest cancels less than 7 days, you get 100%. Please read > https://www.airbnb.com/home/cancellation_policies#strict

[Hatem-and-Jacqui0]

I have a Moderate policy as well and it used to work fine. The issue is that Airbnb changed its owner cancellation policy from the guest being charges the fees to giving guests 2 times free cancellation. This triggered the Moderate policy becoming easier to cancel.
A guest who cancels a booking should incur a charge even if it is a minimal one.
I had a booking that was done 1 year in advance for 3 days and it made several longer bookings impossible despite several private request. Than a few days before the Cancellation fee quicks in, the guest cancels which meant the date was blocked for a year only to be cancelled a week or so before.
I want to suggest to Airbnb to add another cancellation policy in between or even 2.

Changing to strict will for sure reduce the number of requests by a considerable portion.

Thank you

[Jessica-and-Henry0]

@Hatem-and-Jacqui0

You could try adjusting you min/max nights requirement so that for bookings which are more than 6 months (up to 1 year) from now, you have a min stay requirement that is higher (like 28 nights) than what you would normally have (3 nights). 

https://www.airbnb.com/help/article/149/what-is-the-airbnb-cancellation-policy

The Long Term cancellation policy automatically applies to all reservations of 28 nights or more.

Long Term: First month not refundable, 30 day notice for cancellation

This would require you to change your calender setting at least once a month, but could be worth the extra work. (once you get the hang of it, it's actually quite easy~) With a couple long term reservations 6~12 months out into the future, it would be easier to open up the weeks/days in between for shorter stays. 

I actually do something similar to this for my listing, and it has paid off 🙂 

[Huma0]

Wow @Hatem-and-Jacqui0 that's really bad luck. I totally agree that there should be another policy inbetween moderate and strict as they are miles apart!