Airbnb’s New Cancellation Policies: What Hosts Must Know
Big change: Starting January 20, 2025, Airbnb is rolling out new cancellation policies in 11 countries, possibly testing before a global launch. If you’re a host elsewhere, pay attention.
Where it applies: Argentina, Canada, Chile, Colombia, Morocco, Netherlands, Philippines, Poland, South Africa, Sweden, and Turkey.
Why it matters: Airbnb is making cancellations easier for guests, which could mean more flexibility but less booking security for hosts.
What’s changing:
- 24-hour free cancellation: Guests can cancel within 24 hours of booking for a full refund, if booked at least 7 days before check-in.
- Before: Not all policies allowed free cancellations, especially stricter ones like the Strict and Firm policies.
- After: Every booking in the selected countries will now have a 24-hour free cancellation window.
- Note: This 24-hour free cancellation policy may remind you of California’s 2024 law. The difference? In California, it applies if the booking is made at least 72 hours before check-in. In the 11 affected countries, it applies if booked at least 7 days before check-in.
- New “Limited” policy: Guests can cancel up to 14 days before check-in for a full refund.
- Before: Guests had to cancel much earlier for a refund under the existing Moderate or Firm policies.
- After: The new policy provides a middle ground, giving guests more time to cancel but offering some protection to hosts if they cancel later.
- Strict policy removed: Existing hosts must opt-out before Jan 20, or they will be switched to the “Firm” policy.
- Before: The Strict policy allowed hosts to retain 50% of the booking value if a guest canceled 7 days before check-in.
- After: The Firm policy offers less host protection, allowing full refunds up to 30 days before check-in and partial refunds afterward.
Key takeaway: Hosts in these countries must review their settings now. Others should watch closely for a global rollout.
What it means for hosts:
- More cancellations: Expect higher turnover and potential revenue loss due to increased guest flexibility.
- Less control: More flexible cancellation policies could lead to an increase in speculative bookings—reservations made by guests who are unsure of their plans and may cancel later. This can disrupt hosts’ planning, reduce occupancy rates, and create revenue uncertainty as last-minute cancellations become more common.
- Competitive shift: Airbnb is aligning with Booking.com’s guest-friendly policies, where most cancellations occur within 24 hours of booking.
- Revenue impact: Fewer last-minute commitments might lead to revenue uncertainty, requiring price adjustments.
Before vs After: A Quick Comparison
| Policy | Before | After (Effective Jan 20, 2025) |
|---|---|---|
| Flexible | Full refund up to 1 day before check-in | Same + 24-hour free cancellation |
| Moderate | Full refund up to 5 days before check-in | Same + 24-hour free cancellation |
| Limited | N/A | Full refund up to 14 days before check-in, 50% refund 7-14 days before |
| Firm | Full refund up to 30 days before check-in | Same + 24-hour free cancellation |
| Strict | 50% refund if canceled at least 7 days before | Not available for new listings |
What you can do now:
For hosts in affected countries:
- Adjust pricing: Consider higher rates or offering non-refundable discounts to counter cancellations.
- Communicate changes: Inform guests about your cancellation policy to set clear expectations.
- Monitor trends: Watch booking patterns to identify any new risks or opportunities.
For hosts in other countries:
- Stay alert: Track how the new policies affect occupancy and revenue in the affected regions.
- Prepare pricing strategies: Be ready to adjust your pricing if Airbnb rolls out these changes globally.
- Retain the Strict policy: If you currently use the Strict policy, consider keeping it and avoiding changes to your settings to get grandfathered in if the policy is removed in your country.
- Test flexibility: Consider offering refundable options to see how guests respond.
- Engage with the community: Learn from affected hosts and industry experts to stay ahead.
Bottom line: This could be a test before a global rollout. Stay prepared and adjust your strategy now.
Regulatory Pressures in the 11 Countries: Possible Driving Force Behind Airbnb’s Policy Shift
Airbnb’s decision to roll out its new cancellation policies in 11 countries—Argentina, Canada, Chile, Colombia, Morocco, Netherlands, Philippines, Poland, South Africa, Sweden, and Turkey—isn’t just about improving the guest experience. It’s also a strategic response to growing regulatory pressures in these regions. Governments and local authorities have been tightening regulations on short-term rentals to address concerns such as housing affordability, urban overcrowding, and tax compliance. For example:
- In Canada, cities like Montreal and Vancouver have introduced strict rules, including limits on rental durations and requirements that properties be the host’s primary residence.
- In the Netherlands, Amsterdam has capped unhosted rentals at 30 nights per year and mandated host registration, while increasing tourist taxes on short-term stays.
- In Turkey, hosts must now obtain licenses and comply with safety and tax regulations, particularly in tourist-heavy areas like Istanbul.
- In South Africa, cities like Cape Town are debating measures to limit the impact of short-term rentals on long-term housing availability.
These regulatory changes reflect a broader trend: governments are increasingly scrutinizing the short-term rental industry to balance its economic benefits with the need to protect local housing markets. By introducing more flexible cancellation policies, Airbnb is likely positioning itself as a platform that prioritizes guest satisfaction while addressing regulatory concerns.
For instance, the 24-hour free cancellation window aligns with consumer protection laws in some regions, such as California’s 2024 legislation, and may help Airbnb avoid stricter regulations in the future.
