In the short-term rental industry, cancellations happen. It’s just part of the business. However, there are things you can do as a host to protect yourself from lost income when bookings happen. This guide will walk you through the Vrbo cancellation policy and how you can use it to keep your calendar full and avoid losing money when a guest cancels.

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What to know about the Vrbo cancellation policies

Vrbo offers a few different cancellation policies that are great for hosts and guests alike. Below, we outline them for you to help you start thinking about the best fit for you:

No refund policy

This option is exactly as it sounds. No refunds of any kind. While it can provide protection for hosts, it may deter guests who are booking stays far in the future or long-term stays. This option is typically better suited for hosts who market toward last-minute stays or have a home in extremely popular locations.

Strict policy

• If a guest cancels 60 days before check-in, they will receive a 100% refund.
• If a guest cancels less than 60 days before check-in, then they won’t receive a refund.

This is a solid option for hosts who want a level of protection, but won’t deter as many guests.

Firm policy

• Like the Strict policy, guests will receive a 100% refunf if they cancel 60 days before booking.
• 50% refund (excluding traveler service fees) if canceled at least 30 days prior.
• No refunds will be issued for cancellations from guests less than 30 days before check-in.

The firm policy is a solid middle ground for protecting oneself as a host and appealing to a wider range of travelers.

Moderate policy

• 100% refund if canceled at least 30 days before check-in.
• 50% refund (excluding the full traveler service fees) for cancellations at least 14 days prior.
• No refund for cancellations made less than 14 days before check-in.

This option is good for marketing toward travelers who book a few weeks in advance, or seasonal rentals that have more variable demand.

Relaxed policy

• 100% refund if canceled at least 14 days before check-in.
• 50% partial refund (excluding traveler service fees) for cancellations made at least 7 days prior.
• No refund for cancellations made less than 7 days before check-in.

This option is the most attractive to guests as it offers a ton of flexibility. However, hosts should be wary of the possibility for holes in their calendar.

Customize your policy

Vrbo also allows hosts to customize their cancellation policies in two ways:

• If a guest cancels under the extenuating circumstances policy, you can override your set policy and offer a customized refund. However, the new refund amount cannot be less than what the guest would have received under the initial policy.
• It is possible to adjust your cancellation policies at different times of the year. For example, you may want to have a stricter cancellation policy during the holidays if that’s your prime money-making time. Alternatively, you may want a looser policy during the slow season to attract more guests.

Handling cancellations

Let’s explore how to handle a situation where a guest cancels. It’s pretty easy:

1. Log in to your Vrbo account.
2. Select the reservation from the Inbox menu.
3. Find the guest’s name under “All Messages”.
4. Click “Cancel Booking”.
5. Choose the cancellation reason, review the refund amount, and click “Confirm.”

Communication clearly is the key to positive reviews. Nobody likes surprises, especially financial ones, and keeping everything clear and concise from the first interaction will help minimize issues should cancellations arrive.

When to apply for a Vrbo cancellation waiver

As a host, you want to avoid cancelling. Canceling a reservation too much can cause you to lose your superhost status. However, there are some occasions where you may need to cancel, and generally, minimal penalties will apply. Here are a few of those situations:

Natural disasters and abnormal weather

• Events like tornadoes, earthquakes, floods, or abnormal weather events make travel or staying unsafe. These historically severe weather events may qualify as a covered event.

Extensive property damage

• Issues like gas leaks or burst pipes render the property uninhabitable.
• Supporting documentation, such as insurance claims, must be provided.

House rules violations

• When guests repeatedly break your property’s house rules and refuse to request a cancellation themselves.

Non-payment

• Guests who fail to complete payment deadlines are eligible for cancellation without ranking penalties.

These waivers ensure that unforeseen circumstances don’t penalize you unfairly. Apply for a waiver through Vrbo’s Help Center and provide the relevant documentation as required.

Tips to minimize cancellations

Here are a few easy tips to help minimize the number of cancellations you have. Obviously, they can’t all be avoided, but these tips should help.

1. Be clear

Clearly state the cancellation policy so there are no surprises. Include in your listing, guest communications, etc.

2. Encourage travel insurance

Encourage guests to invest in travel insurance. This can give guests peace of mind when deciding to book their stay.

3. Use a property management tool

Host Tools helps hosts when things get crazy. With calendars syncing across platforms immediately, one never has to worry about double bookings or anything like that.

Prepare for the unexpected

Try as we might, cancellations are still going to happen. However, if you prepare in advance, you’ll have less to worry about. Let’s consider the following:

• Set aside an emergency fund
• Provide a flexible rebooking option for guests who truly have an extreme situation come up
• Always be empathetic to your guests and respond quickly.

Final thoughts

As you can see, it’s important to think ahead about the different Vrbo cancellation policy options for both you and your guests. Think about where your home is located, the demand it has, and whether or not you need to worry about holes in your booking calendar.

Host Tools provides an automated, unified calendar for short-term rental hosts, allowing you to seamlessly list on all major channels. Start your free trial today!