Getting your short-term rental off the ground and running involves many steps. You likely will have to find the property, furnish it, get professional photos, and then list it on all the marketing sites. If you’re left with decision fatigue after all of these steps, you may be ready to throw in the towel and just choose the first option when you select your airbnb cancellation policy. However, as an Airbnb host, one of the most important decisions you'll make is choosing the right cancellation policy for your listing. Your cancellation policy can have a big impact on your bookings, as well as on your bottom line.
Airbnb offers a variety of types of cancellation policies:
Flexible -Full refund 1 day prior to arrival
Flexible or Non-refundable -In addition to Flexible, offer a non-refundable option—guests pay 10% less, but hosts keep your payout no matter when they cancel.
Moderate- Full refund 5 days prior to arrival
Moderate or Non-refundable - In addition to Moderate, offer a non-refundable option—guests pay 10% less, but hosts keep your payout no matter when they cancel.
Firm - Full refund for cancellations up to 30 days before check-in. If booked fewer than 30 days before check-in, full refund for cancellations made within 48 hours of booking and at least 14 days before check-in. After that, 50% refund up to 7 days before check-in. No refund after that.
Firm or Non-refundable - In addition to Firm, offer a non-refundable option—guests pay 10% less, but hosts keep your payout no matter when they cancel.
Strict - Full refund for cancellations made within 48 hours of booking, if the check-in date is at least 14 days away. 50% refund for cancellations made at least 7 days before check-in. No refunds for cancellations made within 7 days of check-in.
Strict or Non-refundable - In addition to Strict, offer a non-refundable option—guests pay 10% less, but hosts keep your payout no matter when they cancel.
The right cancellation policy for your Austin airbnb listing will likely change over time. If this is a brand new listing, one of the flexible policies is probably your best option. This airbnb cancellation policy allows guests to cancel their booking up to 24 hours before check-in for a full refund, which would suck as a host, it’s highly unlikely you’ll be able to re-book it that quickly so that means lost revenue. But, it will help you attract more prospective guests initially.
Once you have a few reviews under your belt, you’ll likely want to switch to a moderate or firm policy. These policies provide more of a balance between flexibility and protection for both the host and the guest.
If you want to protect yourself from the financial losses that come with last minute cancellations, one of the strict policies is the way to go. The strict policy allows guests to cancel within 48hrs of booking and get a full refund if the booked stay is at least two weeks out. If it’s for a booked stay at least one week out, guests get a 50% refund. If it’s for a booking within seven days, there is no refund.
Ultimately, the best cancellation policy for your Airbnb listing will depend on your individual needs and circumstances. Consider the hyper-local booking trends, type of guests you typically attract, the demand for your listing, and your own personal preferences before making a decision. In the Austin area, most guests book their stays about 30-40 days out on average. But, anecdotally, this booking lead time seems to be decreasing. Thus, a more moderate cancellation policy may not be that adverse as lots of guests are booking last minute. No matter what, be transparent and clear about your policy so you build trust with guests. This will ultimately always help your bottom line.
