Airbnb to Introduce More Guest-Friendly Cancellation Policies

Airbnb is introducing a series of new cancellation policies October 1 that are more guest-friendly than in the past and may get pushback from some hosts.

Among the new policies:

Transition to Firm Cancellation Policy

Airbnb is migrating hosts that have so-called Strict cancellation policies to Firm policies, which are more flexible for guests.

The Strict policy gave guests the ability to cancel within 48 hours after a booking to receive a full refund. After that grace period guests got partial or no refunds.

The new Firm policies enable guests to cancel and get full refunds until 30 days before check-in. They get 50% refunds if they cancel between seven and 30 days before check-in.

Hosts were no longer able to select Strict cancellation policies for new listings after July 1, 2025. They can opt-out of the change for existing listings. Hosts were informed of all the changes several weeks ago.

Limited Cancellation Policy

A new Limited cancellation policy allows guests to cancel their reservations up to 14 days before check-in and they are eligible for full refunds.

24-Hour Cancellation Grace Period

For stays of fewer than 28 nights, guests will be able to cancel up to 24 hours after a reservation is confirmed and get a full refund as long as that confirmation took place at least seven days before check-in.

Why Airbnb Made the Change

“We are updating our cancellation policies to be more flexible because over 40 percent of guests say free cancellation is one of their top needs when choosing to book a stay, and globally, hosts who have moved from a Strict to Firm cancellation policy earn 10 percent more money, on average,” Airbnb said in a statement. “The majority of global hosts have the option to opt out of the migration.”

In another move, Airbnb is testing a new feature, Reserve Now, Pay Later, which enables some guests in the U.S. and Canada to make a reservation without paying anything at the time of booking. 

If it’s an eligible booking, guests will see the option during checkout.

Reaction

Amber Carpenter, vice president of product and growth strategy at Wheelhouse, an enterprise revenue management platform, thinks the new policy will pay off for hosts in the long term.

“Airbnb’s latest policy updates reflect a broader industry shift toward guest-first experiences, starting at booking and rooted in trust and flexibility,” Carpenter said. “Rather than resisting this trend, individual hosts and property managers have an opportunity to elevate the guest journey through diverse marketing efforts — including strong direct booking channels — and thoughtful revenue strategies. When trust leads, financial performance follows.”

Hospitality executive William Graf posted on LinkedIn about the demise of the Strict policies (although hosts will be able to keep them for existing listings.)

“No point in confirming a $50k Christmas to New Years booking on Airbnb if the guest can cancel without penalty 30 days out,” Graf wrote. “Why take this lever away? Why not let guests vote with the wallets?”