Yes, @Mike-And-Jane0 is(are?) correct that it would be preferable for the guest to withdraw the request, however you won’t incur a penalty by simply denying the request yourself, with an apology and an explanation, and that you will let her know tomorrow if she can go ahead and rebook.
You aren’t immediately penalized for this, although if you deny too often, it could negatively affect your acceptance rate. I have denied requests a few times, and there doesn’t seem to have been any negative repercussions. However, after you have accepted a Request to Book, there are significant penalties if you then cancel.
Your case sounds like a one-off situation and the booking has not finalized, so you should be fine. It’s important in general, though, to make sure your calendar is up-to-date, and that guests are able to book what they see available. If you aren’t sure, block the dates until you are sure.