Airbnb Quick Tip: Why Flexible Cancellation Policy7 min read

 

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Show Notes

Airbnb.com Blog Post Understanding the guests cancellation policy

Topics Covered in this Airbnb Quick Tip

  • Part I and II: Reasons why I think you should be on flexible cancellation policy
  • Part III: Why you’re not going to miss out on a whole bunch of revenue if you do flexible.
  • Part IV: Exceptions.

Transcript

What’s up Airbnb Nation this is Danny the Airbnb pro coming at you from Pereira, Colombia on my balcony in my Airbnb on a Friday night. This is how dedicated I am to you guys.

This week’s Airbnb quick tip is going to be about your Cancellation Policy.

Now the official Optimize my Airbnb recommendation is flexible.

This video will be broken down into four parts. The first two parts will be reasons why I think you should be on flexible cancellation policy. The third will be a balance why you’re not going to miss out on a whole bunch of revenue if you do flexible the fourth part is going to be exceptions.

  • Part I. Reasons why you should be on Flexible Cancellation Policy.

Why I think you should be on a flexible cancellation policy it’s gonna come as no surprise, but I believe that it increases your search rank and that is most important.

Airbnb has never come out specifically and said that this will increase your search ranking however, they have a blog post on airbnb.com titled Understanding the guests cancellation policy there’s a blurb in there that says they encourage more bookings a specially for flexible listings.

Now doesn’t say we’re gonna give a higher search rank preferenciality to listings with flexible cancellation policies but you have to read between the lines especially with a big company like this they can actually if they specifically say this is going to give you a high searching they can actually get themselves in trouble legally so they really are careful with their words.

Now if that isn’t evidence enough for you then maybe this will.
Airbnb runs experiments on their website every day, every week, all the time. I am on Airbnb’s website every day all the time so I see a lot of these experiments because I’m looking at listings in other in different parts of the world when I missed something I’m lucky enough to have an engaged following and you guys reach out to me and say: “Hey have you seen this change what do you think about it?”

Based on these observations it’s in my judgment that Airbnb with a lot of these testings favors listings with flexible cancellation policies to give an example one testing they did was you could actually flip a switch just like now you can flip a switch I just want to see super hosts back then you could flip a switch and say I just want to see listings with flexible type cancellation policies in the show listings with flexible and moderate.

So you could assume a flexible and moderate are giving preferential treatment over strict and super strict you can assume that flexible would have slightly more preferential treatment than moderate.

The third reason: The guest experiencie.

Is because it offers a better guest experience on Airbnb and they have a tendency to favor the guest experience rather than the host experience that’s because they want hosts and guests but it’s harder to get more guests it’s harder to keep up the demand up with the supply so they tend to favor the guest experience over the host experience and a flexible cancellation policy gives a better guest experience.

  • Part II. Reasons why you should be on Flexible Cancellation Policy: Matter of time

Now number two why I recommend flexible cancellation policy is simply a matter of time.
Now if you have a strict cancellation policy which on all the listings I optimize, 60% have strict maybe 30% have a moderate and 10% already have a flexible, so if you have a strict or moderate cancellation policy two things are gonna happen when a guest cancels.

Sometimes these guests are going to cancel for legitimate reasons and they’re gonna reach out and ask you for a refund.

Either you’re going to not give a refund but you’re still gonna have to engage in a back and forth message conversation with this guest in which case your wasting your time or your going to still engage in a back and forth with the guest and give them a refund.In which case you should have had flexible anyways.

I just posted a blog article titled How you can auto pilot your Airbnb and the whole goal is to automate as much as you can Airbnb is not a passive income type source but it can be damn close if you do things correctly like this, this eliminates all of these situations where the guess is going to reach out to you.

  • Part III. Why you’re not going to miss out on a whole bunch of revenue if you do flexible.

Now the third part of this video is that a lot of host to come back and say well I’m gonna miss out on a bunch of revenue if I do flexible cancellation policy and while that makes sense on one level when you actually dig into it it’s false and this is based on my experience and experiences that I’ve read about if I get canceled even the day before it’s likely that I get booked.

Most of the time a guess is not canceling twenty four hours before most of the time they’re canceling at least five six, a week before but if your canceled a day before you got it imagine it’s been my personal experience that most of the time these are booked.

Okay sometimes at the same price but if I’m Airbnb and I have this host who has a booking and then twenty four hours before gets canceled that’s a bad experience for the host very bad experience it leaves a bitter taste in the mouth actually happened before really bitter taste well Airbnb knows that and they’re going to highlight your listing that’s why if you if your guests and you search in the search results sometimes you’ll see rare find or something like this that means I believe that they’re gonna boost that listing temporarily if there’s a cancellation that close.

  • Part IV: Exceptions.

The part four is for is exceptions why you might want to choose a moderate cancellation policy there’s a few reasons:

A moderate cancellation policy is more strict all of these restrictions you add to your listing seven day minimum stay one two or three day advance notice smarter policy all these additional restrictions you’re gonna get less and less guests and some hosts want less guess they don’t want to rent out a hundred per hundred percent occupancy they want to have a higher price than they want less guests so in this case moderate would make sense.

Additionally if you happen to be in a market that had that experience is a lot of cancellations now there’s no tool out there that I’m aware of that tells you this but in my experience there’s very few markets that this happens to when when you is get you just get keep getting cancellations, cancellation, cancellations, it’s hard to to coordinate with your cleaner specifically and for that reason alone you don’t want to get the cleaner mixed up but there’s been some of the things that I’ve had where there’s cancellations it almost seems at fifty percent, forty fifty percent right there’s just so many cancellations in that case I want to add a moderate cancellation policy to limit the amount of cancellations because in reality maybe one of fifteen reservations will be canceled in my experience.

That wraps up this week’s quick tip.
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Until next week

Happy Hosting!

I'm Danny, the Airbnb expert

About Danny Rusteen:

Starting in 2012, Danny has been an Airbnb employee, Superhost, and Airbnb property manager. Danny lives in Airbnbs (1,000 nights). As a guest, Danny has traveled to 33 countries and sifted through thousands of Airbnb listings, so he knows what makes a listing stand out and how to offer a world-class experience to your guest. Follow his journey.

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