Attention Airbnb hosts! Airbnb has recently made changes to its long-term stay cancellation policy, and you need to know all about it. This new policy impacts both hosts and guests differently, so let's dive into the details and understand what it means for everyone involved. Don't miss out on this crucial update!
Let’s take a look at the details of this new cancelation policy and what it means for both guests and those owning an Airbnb.
The Airbnb Update, Going Into Effect March 8
Last year Airbnb introduced a new long-term stay cancellation policy called “Firm.” The company claims that hosts who adopted this Airbnb cancelation policy saw good results. On average listings with this new policy saw a 9% increase in the number of nights booked across stays of 28 nights or more.
Airbnb is now doubling down on this policy due its apparent success. For hosts who employ the current “Strict” policy on their long-term stays, Airbnb will automatically update it to the more flexible “Firm” policy on March 8, 2023. Hosts still have the option to stay on the “Strict” long-term stay cancellation policy, but will need to opt out of the change by March 2.
How the Airbnb Firm Cancellation Policy Works
With the Firm policy, guests can receive a full refund if they cancel at least 30 days before check-in on long-term stays – as opposed to the “Strict” policy where guests can only receive a full refund if they cancel within 48 hours of booking. If a guest cancels after that, hosts will be paid 100% for all nights spent, plus 30 additional nights. If fewer than 30 nights remain on the reservation when the guest cancels, you’ll be paid 100% for all remaining nights.
You will still get paid if guests cancel mid-trip: Guests who cancel after check-in pay for all nights they stayed, plus 30 additional nights.
What can you do?
First, figure out the impact that a more lenient cancellation policy has on booking conversion for your primary booking channels. Do flexible policies still receive significantly more bookings like they did during the peak of COVID or has that need to be reduced back to 2019 levels? What percentage of travelers are actively filtering for more lenient cancellation policies in your market?
Second, take a look at the cancellation rate percentages by policy for your market. You need to be confident that a more lenient policy doesn’t open you up to the uncertainty of unreasonably high cancellations.
Assuming you want to enable a more lenient policy, it sounds like Airbnb will automate it for long stays by automatically updating your policy from “Strict” to “Firm. However, you may want to adjust it for shorter stays and across your other booking channels as well. Unless, of course, your distribution strategy involves giving a competitive edge to a particular source.
And, if your payment processor still charges you the credit card processing fees for cancellations, consider reducing the down payment percentage to lessen the prospective impact.
Beyond is Here to Help
With these changes taking place, those who are in Airbnb property management should plan ahead to prepare their business. We know that it can be challenging to keep up the constant change, so keep up with Beyond’s blog for the latest! Vacation rental property management professionals can also follow us on their favorite social channels: LinkedIn, TikTok, Instagram, Facebook, and Twitter.