Personally in your situation - I would not refund the guest.
Advise your guest, that they need to contact Airbnb to cancel their booking and that AIRBNB will then deal with his cancellation and refund any money due in line with your cancellation policy. Make sure you keep all discussions on Airbnb messaging, so there is a record. You guest can do this, through his booking confirmation, there is a button on it to cancel the booking.
You will get a notice from BNB saying the guest is booking and asking you whether you want to offer a voluntary refund. You can decline and say no. Or say you might consider a partial refund if you get a replacement booking.
Be careful some sneaky guests send BNB a note to say the host has asked them to cancel. When hosts receive this cancellation notice, they click yes and then find themselve liable for the cancellation. Alway decline if you get this message.
If you want to call BNB full contact details on the 1st post on this forum.