Cancellations are an unavoidable part of running a Vrbo property. Guests get sick at the last minute, serious weather events cause power outages, and plumbing emergencies happen at the worst possible moment.
While you can’t prevent all Vrbo cancellations, you can limit how often they happen and minimize the impact on your bottom line. You can also take the opportunity to demonstrate that your business treats guests fairly and honestly and build a strong reputation as a host.
Managing Vrbo cancellations effectively starts with a thorough understanding of the platform’s policies and best practices. Our guide unpacks these rules and offers best practices for applying them across a range of business contexts.
Experienced Vrbo hosts and Hostfully users — Liam Westby and Jun Zhou — also weigh in with their perspectives and insights on successfully managing cancellations.
Understanding Vrbo’s cancellation policies
Vrbo allows both guests and hosts to cancel bookings, but the rules are different from Airbnb. Guests have less flexibility, and hosts must meet specific criteria to avoid cancellation fees.
Here’s an overview of Vrbo rules:
Vrbo guest cancellation policy
Vrbo gives you a choice of vacation rental policies, ranging from fully refundable to non-refundable, based on how far in advance guests cancel. How strict you want to be is completely up to you.
Some tiers allow cancellations weeks before arrival, while stricter ones offer no refunds within two months. Each Vrbo listing clearly shows the policy at booking, so guests know what to expect.
Unlike some listing platforms, Vrbo doesn’t offer a 24-hour grace period in which guests can cancel mistaken bookings. Guests can only cancel according to your chosen policy. This gives you greater control over refunds and encourages travellers to commit to your property.
Vrbo host cancellation policy
Vrbo hosts don’t have a choice over cancellation policies and must follow the same rules. Namely, if you cancel a reservation with a valid reason, you must pay up to 50% of the booking total and receive a temporary suspension.
There’s no need to pay the penalty immediately — Vrbo automatically deducts the outstanding amount from future bookings until your balance is zero.
Vrbo understands that cancellations are sometimes beyond the host’s control and offers a waiver in the following circumstances:
- Natural disasters
- Government-imposed travel restrictions
- Maintenance emergencies
- An error in the Vrbo system
- Signs guests intended to break local laws or Vrbo policies
- Suspected or high risk of fraud
One or two cancellations a year are understandable. Repeated, unjustified cancellations can lead to serious consequences, such as reduced search visibility, calendar blocks, and permanent platform bans.
Vrbo also has zero tolerance for hosts attempting to circumvent the rules. If they see you’ve asked the guest to cancel or lied about your reasons to get a Vrbo cancellation waiver, the platform will be more likely to terminate your account.
Types of Vrbo guest cancellation policies
Vrbo has several tiers of cancellation policies. You must choose one for each property before the listing goes live.
- No refund: Guests are not eligible for any kind of refund
- Strict policy: You offer guests a 50% refund (minus the service fee) if they cancel at least 60 days in advance
- Firm policy: Guests get a full refund if they cancel at least 60 days before the check-in date and a 50% refund if they cancel 30 days before
- Moderate policy: Guests receive a full refund if they cancel 30 days in advance and 50% if they cancel 14 days before
- Relaxed policy: You refund the full amount for any cancellations up to 14 days before check-in, and a 50% discount for anything 7 days before
Hosts can also work with Vrbo to set custom cancellation policies. You can create rules for the whole year or just specific date ranges. These cancellation policies are particularly useful when there’s a concert or sports match in your local area and travelers book properties months in advance, as you’ll be less likely to fill a last-minute cancellation.
How to choose the right Vrbo guest cancellation policy for your rental
Vrbo recommends its Relaxed Policy, but the right choice for you depends on a mix of factors. For example, Jun Zhou, Founder of AirROI, says he considers three factors: seasonality, average lead time, and guest profiles.
“My mountain property books months in advance with more extended stays,” he says, “So I stick to a strict policy. However, for my urban units that receive last-minute bookings, I opt for moderation. Flexibility doesn’t just reduce friction; it also enhances ranking visibility.”
Here are the main factors to consider when deciding on Vrbo cancellation policies:
- Average demand: High demand may allow you to choose stricter policies without losing bookings, while low-demand areas might benefit from more flexible terms to attract guests.
- Seasonality: If demand fluctuates, you may wish to alternate between stricter and more flexible policies.
- Guest demographics: Generational and cultural attitudes and life circumstances can impact how guests react to cancellations, for example, parents of young children will favor flexible policies.
- How far in advance guests typically book: If most bookings are made well in advance, policies that require advanced notice reduce the risk of losing money without putting off potential guests.
- Local weather risks: In areas with unpredictable weather, guests are more likely to appreciate the ability to cancel with a week or so’s notice. They won’t book if you have a strict policy in a location with frequent thunderstorms, for instance.
- Length of stay: Longer stays are harder to rebook last-minute, so a stricter policy offers more protection in these cases.
- Channel mix: When you operate across different channels, such as Airbnb and booking.com, you may wish to keep pricing strategies and cancellation policies consistent.
While you can change your Vrbo cancellation policies, it’s important to get it right the first time. Guests may be more reluctant to take a chance on your business when there are few reviews and an overbearing cancellation policy.
How to cancel a reservation on Vrbo as an owner
Cancellations happen for a variety of reasons. Understanding the nuances of each situation and incorporating this into your policies and processes can help you protect your income while keeping guests satisfied.
Cancelling a guest reservation
You can handle host-initiated Vrbo cancellations via the dashboard. Simply navigate to the booking and click on the big red ‘Cancel Reservation’ button.
If you believe the situation qualifies for a Vrbo cancellation waiver, provide a reason and submit evidence within 10 days. Whatever you provide depends on your reason. For example, you might supply bank statements to demonstrate a guest failed to pay or a doctor’s letter for a serious medical emergency.
Pro-tip: Have a nuanced situation and feel unsure whether you have a valid reason to cancel a Vrbo booking? Join communities like r/Vrbo or r/Vrbohosts on Reddit to read similar stories and ask questions to understand what the platform has approved in the past.
Approving a guest cancellation request
Guests usually cancel on Vrbo via their account. Sometimes, they may be unable to do this and send a cancellation request for you to approve.
All you have to do is find the cancellation request in your inbox and click to confirm. You won’t be penalized for this as it was guest-initiated.
Handling a guest no-show
If guests never arrive and fail to contact you, never cancel the reservation. This can count as a host-initiated cancellation and incur penalties and suspension.
Instead, make a reasonable amount of effort to contact the guest. After 24 hours have passed since check-in, you can contact Vrbo support and report the no-show. It’s a good idea to have a record of all your attempts to reach out.
Receiving a guest message
Sometimes, guests may message you directly and ask you to cancel the reservation to avoid paying. Never agree to do this.
Instead, decide whether the situation calls for a waiver or discount. Liam Westby, owner of Vacation Rentals Galveston, says he tries to respond with empathy. “Life throws curveballs — we’ve all been there. My rule of thumb is: if they’re respectful and honest, and if I can rebook the dates, I’ll offer a partial or full refund. I’d rather have a happy almost-guest than a one-star grudge review. But I make it clear: it’s a one-time goodwill gesture, not a standing policy.”
Vrbo lets you decide whether or not to offer a full refund or discount for last-minute cancellations. But note that you don’t have the right to waive the platform’s service fee.
Tips for minimizing the impact of Vrbo cancellations
While cancellations are inevitable, smart strategies can help you limit their negative impact on your revenue and the guest experience. Here are some tried and tested ideas:
Set clear expectations before arrival
Misunderstandings at the booking stage might cause guests to cancel when they realize later. For that reason, Westby says to keep communication crystal clear: “I set expectations with a welcome guide and FAQs so guests aren’t blindsided by things like parking rules or quiet hours.”
A digital guidebook can give upcoming guests all the information they need about house rules, check-in procedures, and local restrictions before they arrive. Property management software (PMS) like Hostfully lets you create a custom version and send it via text message so there’s no need for anyone to download an app.
Communicate early to prevent last-minute cancellations
Sending a message a few days before check-in can prompt indecisive guests to act earlier. While this situation isn’t ideal, it still gives you longer to find a replacement booking.
Zhou says Hostfully’s automation features save him time by enabling him to create templates and schedule emails. “I use auto-messaging to confirm guest intent a few days in advance,” he says, “If they flake, I can quickly fill the gap.” Hostfully lets you set triggers for these emails so they arrive within a certain number of days after a booking or before the check-in date.
Eliminate double bookings with a channel manager
Vrbo holds you responsible if you double-book your property. The biggest risk of this happening comes from listing across multiple other platforms and failing to block off your Vrbo calendar in time.
Westby says he uses Hostfully’s channel manager to sync listings and bookings across every platform. This tool automatically blocks off your calendar everywhere when someone reserves a property for the exact dates and times, leaving no risk of double bookings. He says, “It’s like having a personal assistant that doesn’t sleep.”
A central calendar also helps you maintain visibility at all times. For example, Hostfully’s built-in multi-channel OTA calendar lets you see bookings across listing sites, properties, and different guests.
Create a procedure for different emergencies
Developing a plan for various scenarios can help you avoid host cancellations. Some common examples include:
- A network of local contractors to handle maintenance emergencies
- Back-up staff in case of illness or injury
- Outside cameras to catch damage or theft
- Protocols for contacting guests and authorities
- Guest screening tools to spot red flags, so you know which bookings not to accept
When you have cancellations, try to understand where you can improve processes to avoid them. For example, Zhou says, “I had to cancel once due to emergency plumbing issues. Vrbo penalized my account and removed visibility for a week, and that hurt. Since then, I added a backup plumber, extra hot water sensors, and instant alert systems through my property automation tools.”
Use smart pricing to fill gaps quickly
Instead of relying on strict cancellation policies to force guests to commit, use dynamic pricing tools to fill your calendar. These adjust your rates across all listings based on market data like current demand, competitor prices, and nearby events.
As Westby notes, dynamic pricing tools also make a great fallback plan. “I integrate with PriceLabs, which helps adjust pricing dynamically — this helps backfill canceled dates faster when they do happen.”
How Hostfully helps you manage Vrbo cancellations with confidence
While cancellations are a part of Vrbo management, nothing says you have to passively accept them. You can develop strategies to encourage guests to commit and keep your business running during emergencies and disasters.
And when cancellations are truly inevitable, you can minimize the impact on your revenue and reputation.
Hostfully PMS supports you with all these strategies:
- A digital guidebook so guests understand what they’re committing to long before the refund window ends
- A channel manager to avoid dreaded double-bookings
- Message templates and automation so you can confirm guests are still coming in advance
- Integrations with dynamic pricing tools to fill last-minute slots in your calendar
- Integrations with guest screening tools so you don’t confirm bookings with unruly visitors that you need to cancel later
Cancellations may be a reality of working in the hospitality industry, but they don’t have to mean stress, negative reviews, or lost revenue anymore.
FAQs
What happens if a Vrbo host cancels a reservation?
If a Vrbo host cancels a reservation, they face up to 50% fees on the total booking amount and a temporary suspension. They must have a valid reason and provide evidence to waive these penalties.
How can I update or change my Vrbo cancellation policy?
You can change or update your Vrbo cancellation policy anytime via the dashboard. Log in to your Vrbo account, select the listing you want to change, and select the policy under the “Rules & policies” section.
Does Vrbo penalize hosts for frequent cancellations?
Yes, Vrbo penalizes hosts for frequent cancellations with higher penalties, loss of Premier Host status, and permanent termination. It wants to discourage them from doing anything that affects users’ experience of the platform.
What type of Vrbo cancellation policy offers the best protection for owners?
Vrbo’s No Refund policy offers the best protection by ensuring you receive payments no matter when guests cancel. But it may not be the most suitable option for your business as guests may prefer alternatives with more flexibility.
