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Increase bookings with flexible cancellation policies

Understand your options and key considerations for setting up a flexible cancellation policy for your vacation rental property.

February 9, 2024

Traveler experience Vacation rentals

One of the top considerations for guests when booking travel is the ability to get a refund if they need to cancel. In fact, many travelers avoid listings with strict cancellation policies when searching for properties. Nearly half (47%) say they would never book non-refundable lodging when traveling domestically, and when it comes to international travel, the demand for flexible cancellation is particularly significant, with 57% expressing a preference for refundable lodging.* Updating your listing to include a more flexible cancellation policy will appeal to guests and give them the confidence to book your property.

 

To help you evaluate cancellation policy benefits for your property, we’ve outlined the different options available, as well as important factors to consider before you update your policies.

Different types of cancellation policies

There are different types of cancellation policies available on our platform, so you can choose which one best meets your needs and those of your potential guests.

Relaxed
  • Cancellation at least 14 days before check-in will get back 100%
  • Cancellation 7-14 days before check-in will get back 50%
  • Otherwise, no refund
Moderate
  • Cancellation at least 30 days before check-in will get back 100%
  • Cancellation 14-30 days before check-in will get back 50%
  • Otherwise, no refund
A product graphic showing some of the cancellation policies the host can choose from.
Consider traveler preferences when creating cancellation policies.
A product graphic showing the option for hosts to set a seasonal cancellation policy with date range.
Use more than one policy with seasonal cancellation policies.
Firm
  • Cancellation at least 60 days before check-in will get back 100%
  • Cancellation 30-60 days before check-in will get back 50%
  • Otherwise, no refund
Strict
  • Cancellation at least 60 days before check-in will get back 100%
  • Cancellation after that point, no refund
Seasonal
  • Date-based policy to adjust for seasonal demand
None
  • No refund if cancelled after booking was accepted

Cancellation policy benefits

A clear cancellation policy sets guest expectations from the beginning, helping protect you from last-minute cancellations. Our partners that move to a flexible cancellation rate see positive results — from higher visibility and engagement from travelers in search to higher conversion and booking values.

On average, properties that move to a more flexible cancellation (i.e. relaxed and moderate policies) see**
+30%

increase in net booking value per year

10%

higher booking conversion rate

3x

as many listing views

For example, vacation rental hospitality company Evolve recognized that by offering more restrictive policies, they were not meeting their guests’ needs, making it harder for them to cancel or adjust when travel plans changed. By shifting to a more flexible cancellation policy, Evolve grew bookings and revenue by over 50%,*** while still providing the best guest experience possible.

“Flexible cancellation policies had a significant positive impact on our business — providing more revenue and a better guest experience.”

Jay Whiteley

Senior Director Distribution Partnerships & Performance, Evolve

Read the case study

Considerations when updating your policy

As you’re setting your cancellation policy, remember to keep these factors in mind:

Timing of refunds
  • The refund percentage applies to the amount the guest paid at the time of cancellation, not the total amount of the reservation. Because of this, you may want to line up your cancellation policy with your payment schedule. For example, if a guest cancels a booking that costs $500, but they’ve only paid $200, and your cancellation policy allows for a 50% refund, the traveler will get $100 back.
Timing of cancellations
  • Cancellations must be made by 11:59 p.m. in the property’s time zone on the 
chosen day.
Impact on our booking fee
  • You can override the cancellation policy and refund a custom amount. If you have a pay-per-booking listing and you keep a part of the payment after cancellation, you’ll be charged a booking fee on the amount you kept.
Other agreements
  • The cancellation policy you choose on our platform overrides your rental agreement. If needed, you can choose a stricter cancellation policy than the one in your rental agreement.

Guidance for property managers

If you’re a property manager, we recommend that you set these policies along with the owners and communicate often — weekly calls or email updates are helpful and can offer peace of mind to the owners. If you use software to manage your listings, you have the option to set custom cancellation policies that perfectly match your and the owners’ needs. You can also sign up to get traveler-initiated cancellation requests via email for an easier and faster way to resolve traveler requests.

 

To help attract more guests and increase bookings with flexible policies, update your cancellation policy today and be sure it’s reflected in your property listing details. If you have questions related to cancellation policies, check out the frequently asked questions below.

Frequently asked questions

By setting a cancellation policy, you may choose to keep a percentage of the booking if a guest cancels outside of your cancellation window.

If possible, offer to reschedule dates that work for both you and your guest.

There are several ways to make sure your listing availability is accurate to avoid declines and cancellations that could negatively impact your search ranking. 

  • Make sure you've blocked your calendar when your listing will be unavailable.

  • Utilize iCal sync, a file format you can use to import and sync calendars across multiple platforms like Google Calendar, Apple Calendar, and other booking site calendars. 

Learn how to keep your calendars in sync.

Guests can contact you directly with cancellation or booking change requests by email, allowing you and your guest to connect more quickly for a faster resolution.

 

There’s an API available for cancellation requests only (Cancellation Service - REST API) that’s a great option for partners with high volumes of requests. Please contact your software provider to learn about this API and whether you currently have access.

The details you share about your property — types of amenities, policies, proximity to popular destinations — are used when travelers narrow a search to find a vacation rental that meets their specific needs. The visibility of your property is improved when you provide more detailed information. Great photos and information about the area help guests imagine their stay and prompt them to book. Keeping yiour listing up to date with photos and amenities will help you stay competitive.

Your cancellations policies are displayed in the Policies section of your listing.

It’s simple to set or change your cancellation policies — from your dashboard, go to Rules and policies > Cancellation policy. From there you'll be able to choose from our different policy options.

Log in to Vrbo dashboard

Update your cancellation policy to provide guests with more flexibility and increase bookings.
Update your policy

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