Cancellations are never fun, and the vacation-rental industry has long leaned on strict, host-friendly policies that give guests little flexibility — keeping cancellation rates low for a decade. A strict policy reduces the chance of needing a riskier, less profitable replacement booking near check-in, but it can also deter guests, lowering your click-through and conversion rates and hurting your ranking.
Be flexible, increase RevPAR
Obsessed with what-if forecasting, Quibble studied and A/B tested cancellation policies across 9 major US destinations before the pandemic. Listings with a flexible policy — 100% reimbursement up to 7 days or fewer before check-in — drove 22% higher RevPAR than restrictive ones, with an average cancellation rate of just 6%, well below the 10% average for alternative accommodations.
Listings with a flexible cancellation policy drove 22% higher RevPAR versus a restrictive cancellation policy.
Policy as a revenue stream
Looser policies bring operational headaches, but they can also be a revenue stream: offer guests several price points with different restrictions. Travel research shows 2–4 options help maximize total revenue, and offering several policy options adds a revenue stream of its own. Check that your direct-booking policy matches what you offer on Airbnb and Vrbo.