A guest asks for a free cancellation or to waive the cancellation fee: what should your B&B do?

The message usually arrives at an awkward moment. "Hello, unfortunately we can no longer come due to circumstances. Would you be willing to waive the cancellation fee?" On Booking.com it sometimes shows up as a formal request for free cancellation, with a button to accept or decline. On Airbnb you get a refund request.

You deliberately set up a non-refundable rate or strict cancellation terms. But there is a person on the other side, sometimes with a very understandable story. So what do you do? This article gives you a level-headed decision framework, three alternatives to a full refund, and how to process it cleanly afterwards.

First: what does your own policy say?

Before you react emotionally, look at the booking itself:

• Which rate did the guest book? A non-refundable rate is usually cheaper because the guest carries the cancellation risk. That is the deal you both made.
• When is the arrival? A request three months ahead is very different from a request the evening before.
• Which channel did the booking come from? Booking.com, Airbnb and your own website each work differently, and that determines what you can actually do.

If your terms are not sharp yet, first read setting cancellation terms for your B&B and when a non-refundable rate pays off.

The decision framework: three questions

1. Can you still sell the nights?

This is the key question. A cancellation in low season, six weeks ahead, for a midweek night? There is a good chance those nights stay empty, or that you have to sell them at a discount. A cancellation for a busy weekend in June? Then someone else booking is a real possibility.

The better your chances of reselling, the easier it is to be flexible. How to resell freed-up nights quickly is covered in reselling nights after a cancellation.

2. How serious is the reason?

A hospital admission or a death in the family is different from "we found something else". You do not need to ask for proof, but you can let the difference count. Many hosts follow an unwritten rule: with genuine force majeure they look for a solution, with a mere change of plans they stick to the terms.

3. What is your relationship with this guest?

A returning guest who has stayed with you three times deserves different treatment from a first-time booker via an OTA. Goodwill towards regulars often pays for itself in the next booking.

Three alternatives to a full refund

Waiving or declining are not the only options. In practice these middle grounds often work better for both sides.

Alternative 1: move the stay to other dates

Offer to move the booking to a date within, say, twelve months, with a price adjustment if the new season is more expensive. The guest loses nothing and you keep the revenue. Note: through an OTA you usually cannot simply change the dates yourself. Often it means the original booking is cancelled free of charge and the guest rebooks, ideally directly with you. More in changing or moving a booking.

Alternative 2: credit instead of a refund

Offer the amount as credit towards a future stay, with a clear expiry date. For the guest it feels like a solution; for you the money stays in the business. If you already sell gift vouchers, this is easy to set up.

Alternative 3: partial waiver

For example, drop the charge for the second and later nights but keep the first night. Or promise a full waiver if you manage to resell the nights. That last arrangement is fair and feels reasonable to the guest too.

How it works per channel

Booking.com

For non-refundable bookings, a guest can submit a request for free cancellation through Booking.com. You see the request in the Extranet or the Pulse app and decide yourself: accept or decline. If you accept, the booking is cancelled at no cost and you pay no commission on it. If you decline, your normal terms apply. Do respond in time: a request left unanswered often leads to a second message or a call to Booking.com customer service.

Airbnb

On Airbnb you can issue a (partial) refund from within the message thread. Be aware that Airbnb has its own policy for major, unforeseen events, under which the platform can in exceptional cases override your cancellation terms. So always keep your communication friendly and in writing in the Airbnb chat.

Direct bookings

Here you have the most freedom, and the most responsibility. If you have already received a deposit, you decide whether to refund, offer credit or rebook. Make sure your decision is also correct in your books: a refund belongs with a credit note, not a silent bank transfer. See processing a refund and credit note.

How to reply without damaging the relationship

A few principles that work well in practice:

• Reply quickly, even if you still need time to think. "Thank you for your message, I am looking into what is possible and will get back to you tomorrow" takes the pressure off.
• Show understanding, but stick to the facts. Refer kindly to the rate that was booked.
• Always offer something. Even if you do not waive the fee, a rebooking or credit is an outstretched hand.
• Put everything in writing in the chat of the channel the booking came from.

How BedFlow PMS helps

In BedFlow PMS a cancellation from Booking.com, Airbnb or Expedia comes in automatically via the channel manager. The room is freed immediately in your calendar and on every other channel, so you can resell the nights right away. You answer guest messages from all channels in one screen, with the booking alongside, so you instantly see which rate the guest chose and how much has already been paid. Refunds are processed as credit notes, so your books stay correct.

Curious how that works in practice? Check the pricing or try BedFlow PMS free for 30 days, no card details needed.