Skip to content

Understanding Vrbo's cancellation policy options

As a vacation rental owner or property manager, choosing the right cancellation policy can significantly impact your bookings, revenue, and guest satisfaction. This comprehensive guide will walk you through Vrbo's cancellation policy options, helping you make informed decisions to protect your business while meeting guest expectations.

In this article, we'll cover:

The five standard cancellation policies

Vrbo offers five standard cancellation policies for hosts to choose from. Each policy balances the interests of property owners and guests differently. Let's explore these options:

1. No Refund policy

This is the strictest policy available on Vrbo. Under this policy, guests receive no refund regardless of when they cancel their booking.

  • Best for: high-demand properties and peak seasons
  • Advantages: maximises revenue certainty
  • Drawbacks: may deter potential guests

2. Strict policy

The Strict policy offers limited flexibility to guests while providing strong protection for hosts.

  • Refund: 100% refund if cancelled at least 60 days before check-in
  • Best for: properties with consistent bookings but some seasonal fluctuation
  • Advantages: balances security and slight guest flexibility
  • Drawbacks: less appealing to guests during uncertain times

3. Firm policy

This policy strikes a balance between host protection and guest flexibility.

  • Refund: 100% refund if cancelled at least 60 days before check-in; 50% refund between 60 and 30 days before check-in
  • Best for: mid-level demand properties
  • Advantages: encourages bookings while offering some protection
  • Drawbacks: potential revenue loss from cancellations

4. Moderate policy

The Moderate policy offers more flexibility to guests, potentially attracting more bookings.

  • Refund: 100% refund if cancelled at least 30 days before check-in; 50% refund between 30 and 14 days before check-in
  • Best for: attracting cautious or last-minute travellers
  • Advantages: increases booking volume
  • Drawbacks: higher risk of cancellations impacting revenue

5. Relaxed policy

This is the most flexible standard policy offered by Vrbo.

  • Refund: 100% refund if cancelled at least 14 days before check-in; 50% refund between 14 and 7 days before check-in
  • Best for: New listings needing reviews, properties in competitive markets
  • Advantages: Maximises booking potential
  • Drawbacks: Least protection against cancellations

Custom policies

For hosts who need more flexibility, Vrbo allows the creation of custom cancellation policies. This option enables you to tailor your policy to your specific needs and market conditions. However, it's essential to ensure that your custom policy complies with Vrbo's guidelines and local regulations.

Choosing the right policy for your property

Selecting the appropriate cancellation policy requires careful consideration of various factors. Let's dive deeper into each standard policy and when it might be the best choice for your property.

No Refund policy

This policy is ideal for properties in high-demand areas or during peak seasons. While it offers the most protection for hosts, it may deter some potential guests. To implement this policy effectively:

  • Clearly communicate the policy in your listing description
  • Highlight the unique features of your property that justify the strict policy
  • Consider offering this policy only during peak periods

Strict policy

The Strict policy can work well for properties with consistent bookings but some seasonal fluctuation. It offers a good balance between host protection and guest flexibility. To make the most of this policy:

  • Use it during your busier seasons when demand is higher
  • Emphasise the 100% refund option for early cancellations in your communication with guests
  • Consider pairing it with competitive pricing to offset the strictness

Firm policy

This middle-ground option can be suitable for properties with moderate demand. It provides some flexibility for guests while still offering protection for hosts. Strategies for using the Firm policy include:

  • Implement it during shoulder seasons when bookings are less certain
  • Use it to differentiate your property from competitors with stricter policies
  • Highlight the partial refund option in your listing to attract more bookings

Moderate policy

The Moderate policy can help attract more bookings, especially from cautious travellers or those booking closer to their travel dates. To leverage this policy effectively:

  • Use it during off-peak seasons to encourage more bookings
  • Pair it with slightly higher nightly rates to offset the increased cancellation risk
  • Emphasise the flexibility in your listing to appeal to uncertain travellers

Relaxed policy

While offering the least protection for hosts, the Relaxed policy can be beneficial in certain situations:

  • Use it for new listings to encourage bookings and gather initial reviews
  • Implement it in highly competitive markets to stand out from other properties
  • Consider it for last-minute bookings to fill vacant nights

Factors to consider when selecting a cancellation policy

When choosing a cancellation policy for your Vrbo listing, consider the following factors:

  1. Understanding your target market: consider the demographics of your typical guests (families, business travellers, etc.) and their booking patterns.
  1. Property location and seasonality: adjust your policy based on high and low seasons, as well as local events that might affect demand.

  2. Competitive analysis: research the policies of similar properties in your area to align with or differentiate from market standards.

  3. Financial implications: analyse how different cancellation rates might affect your revenue forecasts.

  4. Legal and regulatory compliance: ensure your chosen policy complies with local laws and consumer rights regulations.

Implementing and managing your cancellation policy on Vrbo

Once you've selected a policy, it's crucial to implement and manage it effectively:

  1. Setting up or changing your policy: navigate Vrbo's platform to set up or update your policy. Be sure to communicate any changes to guests with existing reservations.

  2. Communicating policies to guests: clearly state your policy in your listing description, pre-booking messages, and house rules documentation.

  3. Handling cancellations and refunds: familiarise yourself with Vrbo's automated processes and be prepared to handle manual refunds when necessary.

  4. Dealing with exceptional circumstances: understand Vrbo's extenuating circumstances policy for events like natural disasters.

Strategies to minimise cancellations and protect revenue

To reduce the impact of cancellations on your business:

  1. Offer flexible booking options: allow date changes or partial refunds to retain bookings.

  2. Implement pricing strategies: consider offering discounts for non-refundable bookings or tiered pricing based on cancellation flexibility.

  3. Use security deposits and fees: clearly outline non-refundable fees and consider implementing damage deposits.

  4. Encourage longer stays: offer discounts for weekly or monthly bookings to reduce turnover.

Check out our blog to learn everything you need to know about how to prevent vacation rental chargebacks.

Enhancing guest confidence and satisfaction

Building trust with your guests can help reduce cancellations:

  1. Transparency and clarity: provide detailed, accurate information about your property. This is where Touch Stay digital guidebooks can be invaluable, offering comprehensive information to guests before and during their stay.

Touchstay

 

  1. Exceptional customer service: respond promptly to enquiries and add personal touches to create memorable experiences.

  2. Collect and showcase reviews: encourage feedback and respond professionally to all reviews.

Utilising travel insurance

Promoting travel insurance can benefit both hosts and guests:

  1. Protection against losses: insurance can safeguard your income in case of guest cancellations.

  2. Reduced disputes: guests with insurance are more likely to claim insurance than request refunds directly from you.

  3. Educating guests: use your Touch Stay digital guidebook to provide information about travel insurance options and benefits.

Navigating Vrbo's policies and support resources

Stay informed about Vrbo's policies and utilise available resources:

  1. Understand Vrbo's terms and conditions: familiarise yourself with the host agreement and policy enforcement guidelines.

  2. Utilise support channels: know how to contact Vrbo for assistance and engage with other hosts in community forums.

  3. Stay updated: keep abreast of policy changes and industry trends through Vrbo communications and relevant publications.

Advanced tips for property managers

For those managing multiple properties:

  1. Policy consistency: consider standardising policies across similar properties for easier management.

  2. Portfolio diversification: vary policies based on property profiles and target markets.

  3. Integrate property management software: use technology to streamline cancellation management and analyse data to inform policy decisions.

Future trends in cancellation policies

Stay ahead of the curve by considering:

  1. Impact of global events: learn from experiences like the COVID-19 pandemic to prepare for future disruptions.

  2. Technology advancements: explore how AI and 3D virtual tours can help reduce cancellations.

  3. Evolving guest preferences: adapt to changing traveller needs, including increased demand for flexibility and sustainability considerations.

Conclusion

Choosing and managing the right Vrbo cancellation policy is crucial for the success of your vacation rental business. By understanding the available options, considering various factors, and implementing effective strategies, you can protect your revenue while meeting guest expectations. Remember to stay flexible and adapt your policies as market conditions change.

Utilising tools like Touch Stay digital guidebooks can significantly enhance your guest communication, helping to reduce cancellations by providing clear, comprehensive information about your property and policies. By staying informed and leveraging available resources, you can navigate Vrbo's cancellation policies successfully and build a thriving vacation rental business.

Take your Vrbo property rentals to the next level with a Touch Stay digital guidebook. 

 

Frequently asked questions (FAQs)

 

 

 
Back to blog