Airbnb Cancellation Policy Guide: Flexible vs. Strict vs. Moderate

Marifil Limpahan
Aug 24
3 min read

Airbnb Cancellation Policies Explained: How to Choose the Best One for Your Listing

One of the first (and most confusing) settings new Airbnb hosts face is cancellation policies. Should you go Flexible to attract more guests? Or Strict to protect your income?

The problem is, most new hosts guess. And guessing can cost you bookings, reviews, or money.

At BNB Guardians, we help busy professionals and first-time hosts make smart Airbnb strategy decisions that lead to financial freedom, not stress. Choosing the right cancellation policy is one of those foundational steps that can make or break your results.

Here’s a clear breakdown of the options and how to decide what works best for your Airbnb business.

Why Airbnb Cancellation Policies Matter

Your cancellation policy directly impacts:

Your income – How much you keep if a guest cancels.
Your Airbnb SEO – Flexible listings may appear more attractive in search.
Your guest experience – Clear, fair policies build trust and avoid conflict.

Think of this as part of your overall Airbnb optimization. It’s not just about protecting yourself, it’s also about communicating the right expectations to guests.

The Three Main Airbnb Cancellation Policies

Airbnb offers three common options (some areas may have slight variations):

1. Flexible Policy

Guests can cancel up to 24 hours before check-in for a full refund.
If they cancel less than 24 hours before, you’re paid for the first night only.
Best for: New listings trying to attract early bookings and reviews.

2. Moderate Policy

Guests can cancel up to 5 days before check-in for a full refund.
After that, you get paid for all nights booked.
Best for: Balancing protection for you and flexibility for guests.

3. Strict Policy

Guests can cancel within 48 hours of booking (if more than 14 days before check-in) for a full refund.
Otherwise, they only get 50% back if canceled at least 7 days before check-in.
Best for: High-demand markets, premium properties, or seasoned hosts who want stronger income security.

How to Choose the Right Policy

This is where Airbnb strategy comes in. There’s no one-size-fits-all answer—it depends on your goals and listing type.

If you’re brand new → Start with Flexible to get momentum. Guests are more likely to book when they know they can cancel.
If you’re in a competitive market → Try Moderate. It gives you some protection while still appearing guest-friendly.
If you’re fully booked months out → Switch to Strict. You’ll avoid last-minute cancellations that leave gaps in your calendar.

Don’t Forget Guest Communication

No matter what policy you choose, how you communicate it matters. Clear Airbnb guest communication avoids misunderstandings and keeps reviews positive.

Mention your policy in your listing description.
Remind guests in your check-in message.
Stay professional if someone asks for an exception.

A simple, consistent approach builds trust even if the guest doesn’t love the policy.

The Bottom Line

Your cancellation policy is more than a checkbox—it’s part of your Airbnb marketing and pricing strategy. The right choice depends on your stage, your market, and your goals.

The good news? You don’t have to figure it out alone. At BNB Guardians, we help hosts with Airbnb coaching, management systems, and real-world strategies to set up their listings the smart way.