As a short-term rental host or manager, cancellations can be one of the most frustrating parts of your job. Whether it's due to an emergency, a change in plans, or simply an oversight, cancellations can lead to lost revenue, unhappy guests, negative Airbnb guest reviews, and a damaged reputation.

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And now, with new policies from Vrbo and Airbnb, it's more important than ever to understand the ins and outs of host-initiated cancellations. In this blog post, we'll explore what you need to know about these new policies, how they differ from each other, and why it's crucial to use a revenue management platform to stay ahead of the game.

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Vrbo Partner Cancellation Policy

Starting on October 14 (in the U.S. only), partners will incur a tiered fee if they cancel a booking. A partner may be held responsible for a cancellation if they initiate it, double book, mislead a traveler, or attempt to have the traveler cancel.

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The cancellation fee ranges from $50 USD and is determined by factors like booking value and timing:

• Within 48 hours of check-in or after, it's 50% of the reservation for unused nights.
• More than 48 hours but within 30 days of check-in, it's 25%.
• More than 30 days prior, it's 10%.

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Partners responsible for a cancellation won't receive the reservation payout. If already paid, future payouts will be reduced.

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In certain cases beyond the Vrbo partner's control, exceptions can be made. A fee waiver may apply in cases like force majeure events, government-imposed travel restrictions, rule-breaking by the traveler, emergencies, Vrbo platform errors, payment issues, or suspected fraud.

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It's important to note that this policy only applies to cancellations initiated by the host, not those initiated by the guest. If a guest cancels a reservation, the host will not be charged a fee or penalized in any way. However, hosts can still choose to enforce their own cancellation policies in these cases. For example, they may choose to keep the guest's deposit or charge a cancellation fee.

Airbnb's New Host Cancellation Policy

Now, let's turn our attention to Airbnb's new host cancellation policy. Starting on October 9, Hosts will be responsible for new fees if they cancel a reservation. 

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If a Host cancels a reservation, they may incur a minimum fee of $50 USD. The fee is determined by when the cancellation occurs:

• Within 48 hours or after check-in, it's 50% of the reservation amount for unused nights.
• Between 48 hours and 30 days before check-in, it's 25% of the reservation amount.
• More than 30 days prior, it's 10% of the reservation amount.

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For reservations of 28 days or longer, fees are based on the non-refundable portion up to 30 days after cancellation.

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The reservation amount includes base rate, cleaning, and pet fees, excluding taxes and guest fees. If the fee is less than $50 USD, it's adjusted.

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Cancellation fees are typically taken from the next Host payout as outlined in the Payments Terms of Service. Additionally, Hosts responsible for a cancellation won't receive the payout for that reservation, or if already paid, it'll be deducted from future payouts.

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Airbnb will waive the fees set out in this Policy in appropriate situations, for example, if the Host cancels because of Extenuating Circumstances or certain valid reasons beyond the Host’s control, but other consequences might still apply.

Minimize the Need to Cancel with a Revenue Management System

With these new policies in place, it's more important than ever for short-term rental hosts and managers to stay on top of their cancellations and bookings. That's where a revenue management platform like Beyond can help. Beyond tracks market data in real-time to help hosts set the optimal prices for their properties. This means that hosts can maximize their revenue while staying competitive in their market.

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In addition, Beyond’s dynamic pricing functionality takes into account cancellations and other factors that can impact demand. When reservations are booked, Beyond adjusts surrounding days to ensure you receive booking and it incorporates real-time factors to make sure you are optimizing occupancy and making the most money out of unbooked days.

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And with Beyond's easy-to-use dashboard, hosts can stay on top of their bookings and cancellations at a glance. They can optimize pricing based on market insights and historical data to minimize the need to cancel for better booking totals and also impacts from cancellations. This helps hosts set prices that are tailored to their specific situation and that keep cancellations to a minimum. 

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Understanding the new host-initiated cancellation policies from VRBO and Airbnb is essential for short-term rental hosts and managers. By staying informed and using a revenue management platform like Beyond, hosts can maximize their revenue while minimizing cancellations and maintaining a good reputation on these platforms. So don't wait – try Beyond today and take the first step towards becoming a more successful short-term rental host. Get $5k in free bookings when you sign up today!

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