Ditto @Queenie0, who very dependably has excellent advice. We as hosts need to be responsible to our guests and not accept any reservation that we are not committed to keeping. In my view, the only reasons hosts should be cancelling a reservation are things like these: (1) in continuing communications with guest, host is having more and more concerns about that guest and realizes they dont' want that person in their home. (2) host has a family emergency -- either their own health emergency, or that of someone in their family. (3) host has a listing emergency, such as a plumbing issue or roof leak, or something that is going to make it difficult or impossible for the guest to stay there. (4) there is a disruptive weather or natural event ,or political/social unrest in hosts' immediate area, which may make it difficult or impossible for guest to come. Eg a hurricane, a fire, or a terrorist attack. I recall a story of a host who had a situation with an escaped prisoner in her area, a massive manhunt for him being underway in her region. That made her normally very safe area, now feel unsafe. She decided to offer the guest the option of cancelling with a full refund.
IN all these cases Airbnb may help the host cancel without penalty, so it is good to contact Airbnb for help.
Host deciding to go on vacation is generally not a good reason to cancel a guest's reservation -- though if the opportunity of a lifetime arises and host absolutely has to go on that special trip, or there are other unexpected circumstances, hosts can indeed cancel but must be prepared to bear the "cost" of doing so. I usually plan my vacations around guests' reservations -- taking vacation only when I don't have guests arriving.