@Susan3622 The guest wants to cancel, not you, so the guest should be the one to cancel. Then wait to see if he gets a full refund before doing anything (he may) . You may also get a message from Airbnb asking if you want to give the guest a full refund.
If you get a message saying the guest wants to cancel and asking you to approve or decline, though, make sure to decline. If you accept, that is registered as a host cancellation and your calendar will be blocked and all the other associated penalties.
In any case, it's not up to you to initiate the cancellation, it's up to the guest. Just tell him Airbnb handles cancellations and refunds and he needs to talk to them.