Setting a Cancellation Policy for Direct Bookings

The policy you inherited without choosing it

If you take bookings through a channel, you have a cancellation policy. You probably picked it from a dropdown once, years ago, and have not thought about it since.

The moment you start taking direct bookings, that changes. Nobody hands you a policy. You have to decide what happens when a guest cancels six months out, six days out, and the morning of arrival — and then you have to make that decision stick when a real person is asking you, personally, for their money back.

This guide covers the three decisions that make a policy, what to put in writing, and the safeguard that matters more than any of it.

Decision one: where your cut-off sits

Every policy is really one number — the point before which a guest gets their money back and after which they don’t.

The honest way to choose it is to ask how long it takes you to re-let the dates. Not how long you’d like; how long it actually takes, looking at your own booking lead times.

A city apartment that books three weeks out can afford a short window. Fourteen days is often plenty, because if someone cancels at fourteen days you’ll probably re-let it.
A remote lodge or a villa that books six months out cannot. If someone cancels at thirty days, that week is very likely gone. Sixty or ninety days is not greedy there, it’s arithmetic.
Peak weeks deserve their own, longer window. The dates you’d most struggle to re-let are exactly the dates people most want to cancel when plans wobble.

Two cut-offs is usually the sweet spot: full refund before the first, partial between, nothing after. Three tiers is the most anyone will read.

Decision two: what “non-refundable” actually means

A policy that says full price is due inside thirty days is worth exactly as much as your ability to collect it. That’s not a legal point, it’s a practical one, and it’s where most policies quietly fail.

Here’s a real example. A property’s channel policy read: free cancellation until 30 days before arrival, full price charged if cancelled inside 30 days, no prepayment, and no credit card details required.

Read that again. The “full price will be charged” clause was unenforceable, because nobody was holding a card to charge. A guest could hold peak dates for months at zero cost and walk away owing nothing collectible.

So the rule is simple and unglamorous: the enforceable part of your policy is the part you already hold. If you want a cancellation charge to be real, you need either a deposit already taken or card details on file. Otherwise you have a strongly worded paragraph.

For direct bookings this is straightforwardly in your hands — take a deposit at booking. How Airflow handles deposit-now, balance-later covers the mechanics, and the deposit doubles as the thing that makes your policy mean something.

Decision three: what happens to the money you already took

Three sub-questions people forget until the first cancellation:

Is the deposit refundable, partially refundable, or not at all? Say it explicitly. “Deposit non-refundable, balance refunded in full if cancelled more than 60 days out” is a complete, comprehensible sentence.

What about the cleaning fee? It hasn’t been incurred, so most hosts refund it even inside the window. If that’s your position, put it in writing — it makes a hard conversation easier.

What happens to your books? This one bites later, not sooner. A cancelled booking can leave a live invoice sitting in your accounts, overstating your revenue and your debtors. The answer depends on the invoice’s status — delete a draft, void an approved one, credit-note a paid one — and we’ve written the whole thing up in What Happens to Your Invoice When a Guest Cancels.

Write it once, in plain words

Your policy needs to exist in three places, saying the same thing: on the booking page before they pay, in the confirmation email, and in your own head when someone asks.

A serviceable template:

Cancellation policy. Cancel more than 60 days before arrival for a full refund of everything paid. Between 60 and 14 days, your deposit is retained and any balance paid is refunded. Within 14 days of arrival, no refund is due, though we will refund the cleaning fee. If we are able to re-let the dates, we will refund what we recover.

That last sentence is worth including. It costs you nothing when you can’t re-let, it makes you look reasonable, and it turns a confrontation into a shared interest.

The safeguard that matters more than the policy

Here’s the part that isn’t about policy at all, and it’s the one we’d most want you to take away.

Cancellation emails get recognised by their wording. “Has been cancelled” in a channel’s notification. The word “cancel” in a message. Now consider a guest who writes:

“Hi — just a heads up, I may have to cancel if my flights change. Will let you know next week.”

If anything in your setup treats that as a cancellation, you have just reopened the dates, released the booking, and possibly voided its invoice — for a guest who is still coming.

Our rule, since 22 September: only a cancellation email sent by the platform itself, for a channel booking, actually cancels anything. Every other case — a guest’s own email, anything about a direct booking, a WhatsApp message — becomes a cancellation request. It shows on the booking as a banner reading “Cancellation request received — nothing has been cancelled yet”, with Confirm and Dismiss.

That’s deliberately asymmetric. Confirming a real cancellation takes five seconds. Recovering from a wrongly-cancelled booking means re-taking the reservation, un-voiding an invoice, and explaining yourself to a guest who did nothing wrong. When the cost of the two mistakes is that lopsided, you bias hard toward the cheap one.

Direct bookings always take the request path, by design. There’s no platform in the middle to vouch for the message, so a human confirms.

What we don’t do, and won’t pretend to

Airflow does not run refunds for you. There is no engine that decides what a guest is owed under your policy and sends the money back. That’s deliberate for now — a refund is a judgement call about a relationship, and the failure mode of getting it wrong automatically is worse than the inconvenience of doing it by hand.

What it does do is make sure the cancellation is real before anything acts on it, reopen the dates, and put the invoice into the right state so your books stay true.

A ten-minute job

Write down how long it really takes you to re-let a week, honestly.
Set one or two cut-offs from that number, with a longer one for peak.
Take a deposit, so the policy has teeth.
Write the paragraph. Put it on the booking page, in the confirmation, and somewhere you can find it.
Check that nothing in your setup can cancel a booking on the strength of a guest’s email alone.

Step five is the one nobody does, and the only one that can cost you a stay that was never cancelled.