How to prepare and react to cancellations from holiday rental guests

Cancellation. Just thinking about the word gives us the heebie-jeebies. It’s the last message you want to receive from your guests. Those four little words, “we have to cancel”. 
So, what do you do if a guest cancels? It’s a question we've been asked several times in the last couple of months, and one we decided it was time to answer.
Holiday rental guest cancellations

Be prepared!

Some situations make cancelling unavoidable. And it’s reasonable to expect that at some stage you are going to be the unlucky owner who receives a guest cancellation..
The important question is, “are you prepared?” Do you have a policy in place that protects you from last-minute guest cancellations?
To avoid cancellations, at least of the last-minute kind, you’ll need to write a clear cancellation policy into your holiday rental agreement. One that will deter guests from cancelling for anything, but the unavoidable.
A cancellation policy incorporates penalty payments based on the time frame between the cancellation and arrival date. You should set the terms that suit your situation; a standard policy might include:
  1. Cancellations made 90 days or more before the arrival date - no penalty 
  2. Cancellations made within 60 days of the arrival date - will incur a fine of part, or all, of the deposit paid. Increasing the fine as the arrival date approaches
Of course this is subject to you requesting a deposit on booking, which leads us on to…

Don’t book dates out without a deposit

Until you have a deposit in hand, keep the dates available on your booking calendar. You must communicate this fact to the client. Make sure they understand that a booking is not confirmed until you have received some form of deposit and signed a booking agreement. At the same time, you can highlight your cancellation policy, so they are fully aware of their booking commitment.

Guest travel insurance

Travel insurance to cover cancellation penaltyEncourage your guests to take out a travel insurance policy. For a modest cost the traveller can cover all or some of the costs incurred due to cancellation. It’s a good idea to get them to check the ‘valid’ reason conditions that the policy includes. “We changed our minds” or “Found a better property” probably won’t be included as ‘valid reasons’.  

Payment protection

If you want to avoid time wasters and false bookings, we recommend you set up a credit card and/ or Paypal payment system to take deposits. This allows you to take payment immediately, rather than waiting for that ‘cheque in the post’ or waiting for 100% payment just before or, on arrival. We recommend you do not accept cheques.

Keep your cool

Reasons to cancel your holiday rental

When the inescapable happens and a client cancels for a genuine reason, it’s important not to lose your cool. Remember, they’re also probably feeling distressed about the situation, so there’s no point rubbing salt into the wound. Remain professional and sympathetic and you may still get the client booked for another date in the future. 
If you are prepared for the possibility of cancellation; having added a cancellation policy in your holiday rental agreement and highlighted the conditions in your booking communication, any penalty incurred shouldn’t come as a nasty surprise to the client. 
Use your discretion: If you feel there is a genuine issue for the cancellation and you are confident you can refill the time, then use your better judgement to decide what penalty, if any, you apply. 


Make sure you ask the client why they have cancelled, get their feedback. If they have cancelled due to finding better suited accommodation, review your property advertising, have you misrepresented the accommodation in any way? Look at what you can improve and clarify in the property details to avoid disappointment in the future. 

Refilling cancelled weeks

If a cancellation leaves you with a last-minute hole in your calendar, we recommend the following steps to endeavour to get the dates booked up:
  • Add the dates to the ‘Last Minute’ section on Here you can feature your property with a special discount and highlight the fact that the offer is due to a cancellation. Focus on a message that this is a special ‘one-off’ deal to grab attention
  • If you have spare days available around the cancelled booking, you may want to offer extra days for free, rather than a discount i.e. 14 nights for the price of 10. It’s a fact that customers prefer to get added value, over a discount
  • Get in touch with our support team and let them know you have had an unfortunate last-minute cancellation and ask us to share a last minute offer on our social media platforms. We are happy to help!
  • Share the offer on your own social media channels and post the offer to ‘Spain-focused’ groups on Facebook
  • If you have a database of guests and contacts, you might consider sending a Last Minute email promotion. As loyal customers, you might also want to add in an extra incentive, such as ‘Free Meal for Two’ or ‘Free Guided Tour’
  • You might consider using your cancelled weeks for the benefit of others. Charity websites like Geronimo allow you to post your holiday rental weeks at subsidised rates, which then get auctioned off at charity events. This way you still get to earn some rent money, but you are also helping to fund raise for a good cause

When you get into this situation, just remember three golden rules: 

  1. Be Prepared
  2. Stay Professional
  3. Have a Marketing Plan B!