How Your Cancellation Policy Can Affect Bookings
Unlocking more visibility and trust with a few small changes to your cancellation policy can make a bigger difference than most hosts realize. Whether you're aiming for maximum flexibility or want to set firm boundaries, your cancellation policy directly affects where you appear in the search rankings, how often guests click your listing, and how likely they are to book. Let’s walk through how some of the major platforms handle cancellation policies and why even minor deviations can have a measurable impact on your bookings.
How the OTAs Interpret Your Policy
Both Vrbo and Airbnb prioritize listings that follow their preferred cancellation policies. On Vrbo, this means selecting one of their standardized options:
Relaxed Policy: 100% refund 14 days before check-in; 50% refund 7-14 days before check-in.
Moderate Policy: 100% refund 30 days before check-in; 50% refund 14-30 days before check-in.
Even a slight tweak like changing the Moderate Policy cancellation window to 32 days or adding an additional cancellation fee can flag your listing as "custom," which lowers its priority in search results. In addition, listings that don’t meet the "free cancellation" requirement are often filtered out when guests search using filters, especially for last-minute trips. This means that your cancellation settings don’t just define your rules; they could determine your success on the platform.
What the Data Says
If you’re wondering whether these small changes matter, don't just take our word for it. Here are the numbers:
From Vrbo:
Listings with standard cancellation policies earn:
- 30%+ increase in annual net booking value
- 10%+ higher booking conversion rate
- 3x more listing views
- 2x more property page clicks
Vrbo has also reported that 77% of travelers prefer rentals with a flexible cancellation policy and that "Free Cancellation” is one of the top-used filters on Vrbo.
From Airbnb:
- Guests are more likely to book listings with flexible or moderate policies
- Listings with "free cancellation" are prioritized in search results
- Rigid policies lead to more booking hesitation and abandoned carts
Common Mistakes That Hurt Your Listing
It’s easy to get nervous about last-minute cancellations hurting your bottom line and to select a "stricter" policy. While every property and property manager's needs are different, it's important to consider all of the data when making this decision. Surprisingly, Vrbo reported that the traveler cancellation rate only fluctuates -7% across all of their policies. Here are some things to consider when making your decision:
- Custom windows (for example, 31 or 32 day policies) disqualify listings from standard policy benefits
- Partial refunds do not meet the full refund requirement
- Cancellation fees automatically remove you from "free cancellation" filters
- Strict or no refund policies limit your exposure and reduce guest confidence
These are not bad choices for everyone, but they do come at a cost. If you are having trouble standing out in a crowded market, this is an easy opportunity to improve your performance.
What We Recommend
If your calendar is open but not filling, try this checklist:
- Match Vrbo’s Moderate or Relaxed policy exactly
- Use Airbnb’s Flexible or Moderate options
- Double check your policy wording and selections on OwnerRez to confirm everything lines up
Even adjusting a single setting by a day or two can flip your listing from "custom" to "preferred." That means more visibility, more clicks, and more bookings.
Final Thoughts
Your cancellation policy isn’t just a safeguard, it’s part of your sales strategy. With most guests filtering for flexibility and platforms giving priority to listings that match their standards, sticking with strict or nonstandard terms can silently hold you back. Review your policy settings across all channels and platforms on OwnerRez. A small shift today could be the booking boost you’ve been looking for.
How OwnerRez Can Help
Fine tuning your cancellation policy across multiple platforms can be tedious, but it doesn’t have to be. With OwnerRez, you can manage and standardize your cancellation policies in one place, ensuring consistency across all your listings. Whether you’re listing on Airbnb, Vrbo, Booking.com, or taking direct bookings, OwnerRez gives you full control over your cancellation settings. You can match platform preferred policies with a few clicks or set custom terms for direct bookings if flexibility matters most to you. And because OwnerRez integrates with all the major OTAs, your policy changes automatically sync across all calendars and listings without needing to log in to each platform individually.Ready to dive deeper? Explore more OwnerRez tools that help you optimize your listings, automate operations, and boost performance starting with our full guides on blackout dates and dynamic pricing strategies.
Cancellation Policy FAQs for Vacation Rentals
Your cancellation policy is more than just a rule for refunds. It affects your place in the search rankings, guest confidence, and how likely someone is to book your property. Below are answers to the most common questions vacation rental owners ask when setting or revisiting their cancellation policies.
Q: Does my cancellation policy impact where my listing shows up in search?
A: Yes. Both Airbnb and Vrbo give priority to listings that follow their more lenient cancellation options. Even small adjustments to your cancellation policy like changing the number of days a guest is eligible for a full refund or adding additional fees can reduce your visibility and remove you from popular search filters like “free cancellation.”
Q: What are the standard policies that platforms prefer?
A: Vrbo highlights listings with these policies:
- Relaxed Policy: 100% refund 14 days before check-in; 50% refund 7-14 days before check-in.
- Moderate Policy: 100% refund 30 days before check-in; 50% refund 14-30 days before check-in.
Airbnb favors listings using their Flexible or Moderate policies.
Q: What happens if I use a custom cancellation policy?
A: Changing the timing to something like 31 or 32 days removes your listing from Vrbo’s preferred category. This makes your property less visible in search results and can limit your booking potential.
Q: How much of a difference do cancellation settings really make?
A: The numbers speak for themselves. Vrbo reports that listings with moderate or relaxed policies earn more than thirty percent higher annual revenue and see over ten percent higher conversion rates. They also get up to three times more views and twice as many clicks.
Q: Are strict or no refund policies ever a good idea?
A: They may work in specific situations but can hurt you in competitive markets. Stricter policies reduce your chances of ranking among the top rentals and put you at risk of being filtered out by a guest search. If bookings are slow, this is one of the fastest settings to adjust for better performance.
Q: How can I make sure my policy is correctly set across platforms?
A: Match the platform options exactly. Double check that your policy wording and refund timing are aligned on OwnerRez. Even being off by a day can move your listing into the “custom” category.
Q: What’s the easiest way to manage cancellation policies across platforms?
A: OwnerRez makes it simple to set and manage cancellation policies in one place. You can apply the exact terms supported by Airbnb and Vrbo with just a few clicks and sync those settings across all your listings.
Q: Can changing my cancellation terms by a day or two really help?
A: Yes. Switching from a custom policy to a preferred one can immediately boost your visibility. That small change can result in more impressions, more clicks, and more bookings.