Cancellation rules shape how much money you make from your short-term rental. A booking that falls through at the last minute can leave nights empty, interrupt your cleaning schedule and reduce monthly earnings. Since COVID, guest behaviour has shifted, and many now expect flexibility when they book a home.
Choosing the right policy matters. A flexible setting often attracts more bookings, but it also exposes you to late cancellations, partial refunds that barely cover your hosting fees, or full refunds that lead you scrambling to chase last-minute bookings. A stricter policy protects revenue, though it can reduce conversion. The right approach depends on the location, season and the type of stay.
Below, we compare the Airbnb, Vrbo/Stayz and Booking.com cancellation policy, so hosts can weigh the trade-offs and choose a platform that supports stable occupancy.
Airbnb cancellation policies
Airbnb cancellation refunds depend on the timing of the cancellation, the length of the stay, and whether the booking falls under short-stay (27 nights or less) or long-stay terms.
Note that as of October 2025, Airbnb is removing Strict for new listings and converting them to Firm. This will unify the rules across more homes and could change how hosts approach higher-value bookings.
For shorter stays (27 consecutive nights or less)
From 1 October 2025, all standard cancellation policies for short stays less than 28 nights include a 24-hour free cancellation period for bookings made at least seven days before check-in, so guests can obtain a full refund. For shorter stays, you can choose from one of the following policies:
- Flexible:
- Cancellation period: Up to 24 hours before check-in, with full refunds.
- After that: Guests receive prorated taxes back, while you’re paid for all nights they stay plus one extra night.
- Moderate:
- Cancellation period: Up to 5 days before check-in, with full refunds.
- After that: Guests receive prorated taxes back, while you’re paid for all nights they stay plus one extra night and 50% of unspent nights.
- Firm:
- Cancellation period: Up to 30 days before check-in, or within 48 hours of booking when the stay is at least 14 days before check-in, with full refunds.
- After that: Guests receive a 50% refund if they cancel 7 to 30 days before check-in. Less than seven days out, the stay becomes non-refundable, and you’re paid in full.
- Non-refundable discount: This sits outside your standard cancellation policy. If a guest chooses this option and cancels, they won’t receive a refund.
The following cancellation policies are available only to specific hosts:
- Strict:
- Cancellation period: 50% refund if guests cancel up to 7 days before check-in, but after the 24-hour cancellation period. You'll be paid 50% for all nights.
- After that: Guests receive prorated taxes back, while you're paid for all nights
- For most hosts, this cancellation policy has been removed and replaced by Firm after 1 October 2025.
- Super strict 30 days: 50% refund if guests cancel 30+ days before check-in; non-refundable after that.
- Super strict 60 days: 50% refund if guests cancel 60+ days before; non-refundable after that.
For longer term or monthly stays
- Firm:
- Cancellation period: Up to 30 days before check-in, with full refunds.
- After that: Guests receive a full refund of taxes only and you’re paid for all nights spent + 30 additional nights.
- If fewer than 30 nights remain on the reservation when the guest cancels, they’ll receive a pro-rated refund of taxes while you’ll be paid 100% for the remaining nights.
- Strict:
- Cancellation period: Up to 28 days before check-in, or within 48 hours from booking, with full refunds
- After that: Guests receive a full refund of taxes only and you’re paid for all nights spent + 30 additional nights.
- If fewer than 30 nights remain on the reservation when the guest cancels, they’ll receive a pro-rated refund of taxes while you’ll be paid 100% for the remaining nights.
What's the best Airbnb cancellation policy?
Hometime reviews these policies for each property and adjusts settings in line with lead-time data to protect occupancy. Our standard settings use Moderate for short stays. This gives guests confidence to book, but protects you as the stay approaches. For long stays, our standard setting mirrors Airbnb’s long-stay rules with a short free-cancellation window, then a non-refundable period.
Airbnb allows hosts to change their policy at any time. Testing different settings across low, shoulder and peak periods can give you useful insight into how price and policy influence occupancy. If you see a spike in short-notice cancellations, you can tighten the rules. If bookings slow, you can switch to Moderate.
Impact on visibility and guest confidence: According to Airbnb, listings with free cancellation periods longer than 48 hours now stand out in search. Globally, hosts who switch from the Strict policy to the Firm policy also earn 10% more on average.
Vrbo/Stayz cancellation policies
Vrbo and Stayz use more traditional cancellation tiers, each with a clear refund window. Hosts can choose from the following:
- Relaxed: Relaxed allows a 100% refund seven to 14 days before check-in.
- Moderate: Moderate offers a 100% refund up to 30 days before check-in and a 50% refund 14 to 30 days before check-in.
- Firm: Guests get a full refund if they cancel 60 or more days before check-in. Cancellations between 30 and 60 days receive a 50% refund.
- Strict: Guests receive a full refund when cancelling 60+ days before check-in. After 60 days, the booking becomes non-refundable.
- No refund: All bookings are non-refundable at any time.
What's the best cancellation policy for Vrbo and Stayz?
The key difference on Vrbo/Stayz is the focus on longer refund windows. Many hosts set a 60-day cut-off, which suits holiday homes and regional stays planned well in advance. Admin fees can apply to some policies, usually taken from the guest's refund.
Hometime applies a standard 60-day non-refundable window for Vrbo bookings. This is simple, predictable and protects high-value stays in family-sized homes.
Impact on visibility and guest confidence: Stricter policies can reduce visibility on Vrbo if your rules are outside what guests expect in your category. A long window can improve search performance in family and group-travel markets because guests feel more secure when plans may change.
Booking.com cancellation policies
Booking.com works differently. You pay commission on every completed stay, and the platform often favours the guest when cancellations occur. Some bookings also allow guests to cancel without penalty, even if your policy is strict, depending on the rate plan they select.
Booking.com gives hosts two main approaches: a fully flexible policy or a customised one. You can also apply different rules to different room types.
- Fully flexible: Guests can cancel free of charge within a window you set. They only pay when they stay, which often improves conversion for short stays and city bookings.
- Customised policy: You control how far in advance guests can cancel for free, and what they’ll be charged if they cancel after that point. You can also add prepayment rules, choose when to receive payment and apply different policies to each room type.
- Pre-authorisation and deposits: You can set pre-authorisation rules to show guests if their card will be held before arrival, and for how much. You can also take a deposit to protect revenue if a guest cancels. Deposits are often paid by bank transfer and can be refunded or applied to the reservation if the guest stays.
Travel credits and rebooking behaviour: Booking.com sometimes issues rewards through travel credits to guests. That way, guests can pay less for their booking, along with Genius discounts and other deals on the website, to delight the guests.
What's the best cancellation policy for Booking.com?
Hometime sets a 30-day refund window for smaller homes and a 60-day window for larger ones. This aligns with how guests book family stays on Booking.com and protects longer lead-time bookings.
Which STR platform gives hosts the most control?
Airbnb gives the widest choice and the easiest way to switch between tiers. The Firm policy strikes a balance for most stays. For stricter needs, Vrbo/Stayz is consistent and predictable. Booking.com gives the least control because its model leans towards guest flexibility.
If you're currently listing your property on multiple STR platforms, then use different settings for each one. A Flexible policy on Airbnb can increase occupancy, while a firmer policy on Vrbo/Stayz protects longer stays.
Legal and guest service considerations in Australia
The ACCC expects businesses to honour the refund rights they advertise. If a stay becomes impossible due to an external event, you may need to offer a remedy even under a strict policy.
Consumer rules vary by state, and clear communication helps avoid disputes. Explain your cancellation terms in simple language and repeat them in pre-arrival messages. This reduces confusion and protects your review score.
Simplify hosting with the help of Hometime
Choosing the right cancellation policy is only one part of running a successful short-term rental. If you want support with revenue optimisation, guest communication, housekeeping, professional photography and property styling and listing optimisation, Hometime can help.
We manage homes across Australia with local hosts on the ground and a central team watching performance every day. We use real booking data to set the right cancellation rules, reduce late changes and keep occupancy stable, maximising your earnings across Airbnb, Booking.com and Stayz.
If you’d like to earn more while doing less, you can join Hometime today. It takes just a minute to get started, and we’ll walk you through every step.
