The past five years has brought a tremendous rise in awareness of short-term rentals, driving demand for what used to be a relatively niche industry. But growth doesn’t always go smoothly, and one side effect of this larger and more diverse marketplace is the number of guest cancellations.


Cancelled bookings are an inevitable part of being a short-term rental property manager, but they’re a frustrating reality that are tied directly to your bottom line. Not just in the form of lost income, wasted acquisition costs and overhead expenses but also the opportunity cost of missed inquiries, reviews and referrals.

The solution isn’t to shrink back to yesterday’s status quo. Instead, analyze the factors that impact your vacation rental listings. Here are three actions you can take to help minimize your guest cancellations and find a better balance between risk and stability for your vacation rental business.

1. Understand guest behavior

Listing sites have always been an essential part of vacation rental promotions, but multi-channel marketing has been driven to a new level: as brands like Airbnb have become household names, OTAs (online travel agencies), such as TripAdvisor and Expedia, have expanded to embrace vacation rentals.

The result? Short-term rental properties are being introduced to travelers who may:

  • Prefer to make plans at the last minute and adjust their itinerary as needed
  • Be more familiar with the last-minute flexibility of hotels and expect the same from other accommodations
  • Book multiple accommodations ahead of time with the intent to confirm their actual plans closer to their travel dates

Add these behaviors to typical reasons for cancellations, such as personal illness or family emergencies, and reservations can start to feel a little unpredictable.

Guest cancellations are a concern for every property manager but can be difficult to benchmark: The factors that impact your business can vary by target audience, property type, booking channel, local market conditions, your cancellation policy, and even the level of customer service you provide.

To help gather information so you can figure out where to focus, consider the following questions:

  • What’s the average lead-in time between booking and scheduled arrival for canceled reservations?
  • What reasons do guests provide for cancelling bookings or not showing up?
  • Do they cancel and stay with your competitors instead?
  • Is there a common point in the booking process when cancellations are most likely to occur?
  • How do cancellation rates vary from one booking channel to another?

The information you gather will help you set expectations and identify areas where you can be more proactive to help prevent guest cancellations in the first place.

Pro tip:’s built-in reporting tools use their data to help you benchmark your property against your peers.

2. Adjust your cancellation policy

One common line of thinking is to counter last-minute cancellations with a strict cancellation policy. But tighter policies may not be the right move for every business.

More flexible policies may be a better fit for properties in urban markets where they’re in more direct competition with hotels, and newer rentals may fare better with more flexible policies until they’ve established a reputation through reviews and stronger demand.

Depending on your target market, a move to a strict cancellation policy can hurt more than it helps: Most travelers don’t like to feel locked in, and many will filter out properties with restrictive policies, so they won’t see your listings in the first place.

When deciding on the best option, consider the cost of a cancellation to your business:

  • Do you have a strategy in place to get last-minute bookings that can cover lost reservations?
  • What are the overhead costs associated with each cancellation, and how can you cover them?

You can also adjust your cancellation policy to fit each booking channel you list on, depending on their requirements or your results. Some OTAs bill travelers non-refundable fees or, as with Airbnb, set cancellation policies of their own.

3. Go broad to become more selective

The goal of minimizing guest cancellations is to nurture a steady stream of travelers who show up and keep your business going strong. While a stricter cancellation policy may seem the logical next step, a better approach might seem counterintuitive: to expand your marketing to multiple listing sites and amp up the visibility of your properties.

When you restrict your listings to one or two channels, you limit your exposure to a smaller group of people looking for vacation rentals exactly like yours. If their search requirements slightly differ from your listings, such as looking for a more flexible cancellation policy, they’ll miss your units completely.

When you drive up demand for your properties, even when you’re already operating near capacity, you actually get the best of both worlds: you can be more selective with who books your properties because popularity gives you options. For example, you can add filters to your property that guarantee you are reserving the most revenue-rich booking for that time period:

  • Add a higher minimum night total
  • Increase your rates
  • Narrow your target audience
  • Add a minimum guest rating to ensure you are only allowing respectful guests in your units
  • Set a cancellation policy that minimizes your risk of losing business

And there’s more to be gained from adding new channels! MyVR found that for every new channel that a MyVR customer adopts, they approximately double their average revenue per property per month. MyVR was built by industry experts to drive property manager growth and performance.

Adding channels to gain a wider reach will allow you to not only minimize cancellations but also earn the best possible reservations available and ultimately, increase your revenue.