Airbnb is introducing significant changes to its cancellation policies starting October 1, 2025, with the aim of offering greater flexibility to guests. The new policies, which are considered more traveler-friendly, may cause some backlash from hosts who are concerned about the impact on their revenue and scheduling.
More Relaxed Cancellations – The End of the “Strict” Policy
The most significant change is the transition from the strict cancellation policy (“Strict”) to the new “Firm” policy. Until recently, the “Strict” policy allowed guests to cancel without charge only within 48 hours of booking. After that time, cancellations resulted in a partial or no refund.
With the new “Firm” policy, guests can cancel without any charge up to 30 days before their arrival, while if they cancel between seven and 30 days before arrival, they are entitled to a 50% refund of the amount.
Starting July 1, 2025, hosts will no longer have the option to choose the old “Strict” policy for new listings, while for existing listings they can choose whether or not to keep the older policy.
New cancellation options
In parallel, Airbnb is introducing other policies:
Limited Cancellation Policy: Possibility of cancellation with a full refund up to 14 days before check-in.
24-Hour Grace Period: For stays of less than 28 days, guests will be able to cancel within 24 hours of booking and receive a full refund, as long as the reservation was made at least seven days before arrival.
Why the changes?
Airbnb says the changes are in line with traveler preferences: more than 40% of users said free cancellation was a key factor in choosing a place to stay. The company also notes that, globally, hosts who have adopted the “Firm” policy earn an average of 10% more revenue.
“We’re updating our cancellation policies to offer more flexibility because guests are asking for it and data shows hosts are benefiting,” Airbnb said in a statement.
The majority of hosts worldwide have the option to opt out of the transition.
New “Reserve Now, Pay Later” Feature
In addition, Airbnb is testing a new “Reserve Now, Pay Later” feature in the U.S. and Canada, which allows some guests to book without paying immediately. If the reservation qualifies, the option will appear during the booking process.
Positive and negative comments
The policy update has already caused a backlash in the short-term rental industry.
Amber Carpenter, vice president of product and strategy development at Wheelhouse, said the change is in line with a broader trend in tourism that is focusing more on the guest experience: “When trust comes first, financial performance follows,” she emphasized, urging hosts to use the change to their advantage with marketing strategies and direct bookings.
However, not everyone shares this optimism. William Graf, a hospitality executive, wrote on LinkedIn that the removal of the “Strict” policy deprives hosts of an important protection tool. “There’s no point in confirming a $50,000 reservation for Christmas and New Year’s if the guest can cancel 30 days in advance without penalty,” he wrote.
The challenges for hosts
The new policies are expected to make Airbnb more attractive to travelers, especially during times of uncertainty, but for hosts, they could mean increased risk of cancellations during peak periods and a loss of guaranteed revenue.
As the platform evolves its business model, hosts are being asked to adapt and rethink their strategies, balancing the need to attract guests and ensuring the financial viability of their accommodations.
