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What to include in your short-term rental cancellation policy

On Behalf of | Apr 15, 2024 | Airbnb

When you use your property as a short-term rental in Pennsylvania, you will occasionally have a reason to cancel a reservation. You may also find that a guest will need to cancel a reservation for various reasons. Having a sound cancellation policy available to your guests will prevent misunderstandings if either party needs to cancel. By being aware of Airbnb’s recommended cancellation procedures, you can craft a policy that meets your needs as a host and helps your guests feel comfortable with reserving your property.

Types of cancellation policies

A flexible cancellation policy will attract more guests, but it adds risk to your income-generating potential. Flexible schedules may allow guests to cancel up to 24 hours before the reservation with a full refund. A moderate policy allows guests to cancel up to five days before their reservation. With a firm cancellation policy, guests can only get a refund if they cancel their reservation 30 days before their check-in date.

You may wish to change your cancellation policy based on the season. If you live in an area where competition is always high among those looking for rentals, a flexible cancellation policy may work well because you won’t have to worry about finding another renter. If you don’t want to deal with last-minute changes, choose a stricter policy to prevent the hassle of trying to re-rent your property after a cancellation.

When to allow cancellations

Last-minute cancellations can mean loss of revenue as you may struggle to re-rent your property when your guest cancels. Some hosts choose to only offer refunds for cancellations if they can re-rent the property for the previously reserved dates. If you wish to add a non-refundable option to your bookings, you can offer guests a small discount if they choose that option. This helps you attract guests who are certain of their travel plans.

Don’t forget to include information about cancellation on your part. You may run into an issue with your property that prevents you from hosting guests. This could include a power outage, water problem or other issue. Include details on whether you plan to help your guest find another accommodation and how and when you plan to refund any deposits or payments they have made toward their stay.

Creating your rental contract

Renting vacation properties can be financially rewarding if you’re prepared for potential issues. A sound rental contract benefits you as a host and helps your guests know what to expect when making a reservation for your property. If you have questions or concerns about creating a sound contract, you may wish to consult with a professional who is familiar with Pennsylvania’s short-term rental laws.