The High Cost of Cancelling and Rejecting Short-Term Rental Bookings

The Hidden Consequences of Rejecting or Cancelling Short-Term Rental Bookings: What Owners, Hosts, and Investors Need to Know

When an owner or host cancels or rejects a short-term rental booking, there’s far more happening behind the scenes than you might expect, and unfortunately, it’s not good news. In fact, the repercussions can be severe, with impacts on both your property’s listing and your agency’s reputation. It’s crucial to understand the risks involved before pressing that ‘reject’ button.

Many investors may not realise that cancelling a booking isn’t just an inconvenience or a potential culture killer, but also poses a significant threat to both your property listing and your agency’s standing. As the middleman between hosts and guests, agencies are in a delicate position, juggling expectations from both sides. A rejection or cancellation can send ripples through both relationships, affecting everything from search rankings to Superhost status.

Short on time? Our short video covers the key points from this blog, giving you a quick and clear overview of the consequences of rejecting or cancelling short-term rental bookings. Watch now!

1. Drop in Search Rankings (Across Your Portfolio)

Cancel a booking, and the visibility of your entire portfolio could take a hit. OTA platforms like Airbnb and Booking.com favour hosts who are reliable and convert well – after all, that’s how they generate revenue.

When a cancellation or rejection occurs, the specific listing may suffer a steep drop in search rankings, but that’s just the beginning. The platform might also penalise your agency’s entire account, meaning all properties under your management could see reduced visibility. This can lead to fewer bookings and, in turn, lower overall occupancy and performance across your listings.

2. Temporary Suspension or Delisting of Listings

Repeated cancellations or rejections can lead to the temporary suspension of the affected listing, or worse, permanent delisting. It’s not uncommon for platforms to delist properties after multiple cancellations without any warning.

OTA platforms are laser-focused on guest experience, and they prioritise reliability. If cancellations or rejections signal unreliability, they won’t hesitate to remove your property – and that could jeopardise the agency’s broader relationship with the platform. This, in turn, can make it more difficult to get new listings to perform well in the future. Agencies may even need to reconsider their representation of certain properties or owners.

3. Automatic Blocking of Dates 

On many platforms, when you cancel or reject a booking, the system automatically blocks out those dates on your listing. This means that even if you have a new booking request, those dates remain unavailable, negatively affecting both occupancy and revenue.

Additionally, listings with blocked dates miss out on opportunities to improve search ranking since they aren’t available to generate reviews or conversions. OTAs rely on conversions for their revenue, and listings that aren’t actively booking won’t get prioritised in search results.  

4. Damage to Your Property’s Reputation 

Cancelling or rejecting a booking often triggers negative guest reviews, which can have long-term effects on your property’s performance. Guest ratings and reviews are crucial in attracting future bookings, and any negative commentary – even if the cancellation was outside of your control – will harm your property’s standing.

Most OTAs automatically post a review for guests when a booking is cancelled or rejected. This review is visible to future guests and often leaves a negative impression, regardless of whether the cancellation was the owner’s decision or due to platform issues. Unfortunately, guests tend to associate the negative experience with your agency’s brand, rather than just the property.  

5. Loss of Superhost or Preferred Partner Status 

Maintaining Superhost or Preferred Partner status is a challenge in today’s competitive market. A single cancellation or rejection can put these hard-earned statuses at risk. Losing these badges affects your placement in search results, guest trust, and overall booking performance.

For agencies managing multiple properties, the loss of Superhost or Preferred Partner status can have a significant impact, as these statuses contribute to higher booking rates and better guest trust

6. Financial Penalties and Guest Compensation 

Many platforms impose financial penalties for cancellations. Your agency could face fees based on how close the cancellation is to the guest’s check-in date, or the platform may offer compensation to the guest, such as vouchers or alternative accommodation, which could be charged to your agency.

Here’s a breakdown of typical cancellation fees:

• Airbnb: Hosts are charged fees for cancellations, especially when they occur close to the check-in date.
• Booking.com: Charges a percentage of the booking total and may also charge for alternative accommodations.
• Vrbo: Deducts fees from future payouts, especially for cancellations during high-demand periods.

7. Time and Resources Required to Source Alternative Accommodation 

When a booking is cancelled, your agency is often responsible for finding alternative accommodation for the guest, which is a time-consuming and resource-intensive process. This includes:

• Researching alternatives: Finding replacement properties that match the guest’s needs.
• Communicating with the guest: Handling their frustrations and ensuring a positive experience despite the setback.
• Coordination with other hosts: Arranging for rebooking while maintaining a professional relationship with the guest and platform.

This process can take hours or even days, especially during peak periods, and comes with a significant financial cost.

The Bigger Picture 

Cancelling or rejecting a booking doesn’t just affect one property—it can jeopardise your agency’s overall position and its broader relationship with platforms. Owners must think about the bigger picture, beyond individual bookings. The ripple effects of lost Superhost status, search ranking penalties, strained relationships, and time-consuming guest management can be devastating for an agency.

Key Takeaway: We aim to set clear expectations with our owner partners, educating them about the full range of consequences associated with cancellations and rejections. By helping owners understand both the direct and indirect costs, we hope to foster stronger relationships and ensure a more reliable guest experience.

In Summary: Before rejecting or cancelling a booking, always consider alternative solutions—such as adjusting booking dates, offering upgrades, or helping owners understand the value of honouring reservations. Remember, it’s not as simple as saying, “No, I don’t want this one,” or, “I need to cancel.”

At Property Providers, our core purpose is “Helping People Live Better”.  As Sydney’s most flexible residential rental agency, we are focused on Property Management and renting “Your Property, Your Way”. We have designed 6 different rental services covering all facets of Long-Term Leasing and Short-Term Stays. Unlike franchise real estate agencies, we see the value in pragmatism and flexibility. Whether you want to rent your property furnished or unfurnished, for 6 months or 5 years, we will manage your property, your way. Our bespoke marketing strategies deliver discerning international tenants who understand quality and are prepared to pay for it.  If you would like to learn more please visit our website or call us on +61 2 9969 7599

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