(Updated) VRBO Cancellation Policies | The Ultimate Guide

OTA cancellation policies evolve over time and Vrbo’s is no exception. Its new Extenuating Circumstances Policy, which went into effect in June 2024, for example, forces hosts to refund guests whenever it is activated, leaving them at a loss and unable to make up for it either.

As a host, staying up to date and understanding the intricacies of Vrbo's cancellation policies is crucial for managing your rental property effectively and ensuring a positive experience for both you and your guests. In this guide we delve into what a cancellation policy is, how it works, the different types of cancellation policies available on Vrbo, what each policy means for hosts, the Extenuating Circumstances Policy and other important nuances.

What is Vrbo’s Cancellation Policy and How Does it Work?

A cancellation policy is a set of rules that outlines the conditions under which guests can cancel their reservation and receive a refund. These policies are designed to protect both hosts and guests, providing clarity on what happens in the event of a cancellation.

When a guest books a stay at your Vrbo property, they agree to abide by your chosen cancellation policy. This policy determines the amount of refund a guest is entitled to if they cancel their reservation within a specified timeframe. As a host, you can choose from several cancellation policy options that range from flexible to strict, each with varying implications for both you and your guests.

Your chosen Vrbo cancellation policy always supersedes your short-term rental agreement.

Vrbo Cancellation Policies: An Overview

1. Relaxed

Vrbo’s recommended cancellation policy, Relaxed allows guests to cancel their booking for up to 14 days before check-in and receive a full refund. They receive a 50% refund if they cancel between 14 and 7 days before check-in.

This policy is very guest-friendly and may attract more bookings. It also increases the likelihood of last-minute cancellations, potentially leaving your property unbooked.

2. Moderate

With this policy, guests receive a 100% refund if they cancel at least 30 days before check-in. If they cancel between 14 and 30 days before check-in, they get a 50% refund.

The policy offers more flexibility for guests while still providing a reasonable window for hosts to rebook the property with a last-minute booking if a cancellation occurs.

3. Firm

When you choose the Firm policy, guests can get a full refund for cancellation up to 60 days before check-in. Cancellations made between 30 and 60 days of check-in receive a 50% refund.

The Firm policy offers a balance, providing protection against last-minute cancellations while offering some flexibility to guests.

4. Strict

With the Strict policy guests only receive a 100% refund if they cancel at least 60 days before check-in. They don’t get a refund for cancellations less than 60 days before check-in.

This policy provides substantial protection against cancellations, ensuring hosts are compensated for their bookings and providing ample time to rebook. It can also deter guests looking for more flexible options.

5. No Refund

When a host chooses the No Refund policy, guests don’t receive any  refund if they cancel a booking. The policy offers the highest level of protection for hosts, ensuring that you retain the full payment regardless of cancellation. It is also likely to deter many guests, especially if they don’t opt for travel insurance.

6. Custom

Vrbo allows some hosting partners to create custom cancellation policies.

Integrated property managers can refund the amount payable. For example, 50% of the total rent plus fees. Platform partners can refund the amount paid. For example, 50% of the first payment made at the time of booking.

7. Seasonal

In contrast to Airbnb, Vrbo allows its hosts to create seasonal cancellation policies.

A seasonal cancellation policy allows you to make your current cancellation policy more or less strict for a specific set of check-in date ranges. The policy expires once the date range ends.

The policy is applied based on the check-in date of the traveler rather than their booking window.

Does Vrbo Allow Custom Refunds? How Does it Work?

Vrbo allows its hosts to refund their guests a custom amount.

Vrbo hosts can choose to refund their guests any amount of their choosing, as long as the custom amount is equal to or greater than the refund the guest would have been paid based on their chosen cancellation policy.

How to Choose the Right Vrbo Cancellation Policy for Your Vacation Rental

Choosing the right cancellation policy involves balancing flexibility for guests with financial security for yourself. Consider your property type, typical booking patterns, the traveler segments attracted and the level of risk you’re willing to accept. Make good use of seasonal policies to increase revenue and drive bookings during high and low seasons, respectively.

How to Communicate Your Vrbo Cancellation Policy

Cancellations are inevitable. And clear communication of your cancellation policy is essential if you want to avoid angry guests whose expectations have not been met.

Make sure your guests understand the terms before they book. Highlight your policy in your listing description and during the booking process to help manage expectations and reduce the likelihood of disputes.

How to Change Your Vrbo Cancellation Policy

Once you edit your policy, the change will only apply to new bookings. The previous cancellation policy will apply to your old reservations.

• Log in to your Vrbo account

• Select the listing you want to edit

• Select Property

• Select Rules & policies

• Select the Cancellation Policy tab

• Choose your new cancellation policy

• Click Save

What is Vrbo’s New Extenuating Circumstances Policy? How Does it Work?

Following Airbnb’s new Major Disruptive Events Policy which went into effect on June 6, 2024, Vrbo followed suit with its new Extenuating Circumstances Policy. This applies to all Vrbo reservations from June 15, 2024.

Vrbo’s Extenuating Circumstances Policy covers a range of events that it considers to be broad-scale travel disruptions that can prevent or legally prohibit its guests from completing their reservations.

When Vrbo activates its Extenuating Circumstance Policy to a certain area or situation, affected guests receive a full refund, regardless of the host’s cancellation policy. While this policy aims to provide fairness and flexibility in unexpected situations, it leaves hosts at a loss as they lose both the booking and the payment. Vrbo hosts are also on the hook for the credit card processing fees.

What Events are Covered by Vrbo’s Extenuating Circumstances Policy?

Natural disasters and abnormal weather events

These can be earthquakes, tsunamis, volcanic eruptions, landslides, tornadoes, floods, wildfires, etc as long as they are not foreseeable weather disasters. For example, a hurricane during hurricane season would not be covered.

However, if a foreseeable weather disaster causes or coincides with another covered event, then the policy could apply. For example, if a hurricane affects public utilities causing prolonged power outages to a majority of homes in a major city or region.

Declared health emergencies

This covers epidemics and other public health emergencies that are declared by national or local governments or regulatory bodies like the WHO.

Wars, terrorist attacks and other hostilities

Hostilities such as war, terrorist attacks, riots, civil unrest on a large scale, etc  that make it impossible or illegal for guests to travel to their accommodation location or for a Vrbo host to accommodate their guest.

Government travel restrictions

This applies when a national or local government imposes travel restrictions that make it impossible or illegal for a guest to travel to their accommodation location or for a Vrbo host to accommodate their guest.

Infrastructure travel restrictions

This covers extended outages of essential public utilities that affect most homes in an area. It also includes disruptions to critical travel infrastructure like flights canceled due to a volcano eruption that prevent guests from traveling to their booking location.

Changes to passport or visa requirements

This is when a government unexpectedly changes passport or visa requirements that did not exist and was not expected at the time of booking. If the guest cannot meet the new changes before their date of travel or if the changes make it illegal for them to travel to the host location, the policy applies.

What Events are Not Covered by Vrbo’s Extenuating Circumstances Policy?

• Individual seasonal weather events that do no cause or coincide with another covered event

• Endemic or common diseases in a region

• Local demonstrations or localized civil unrest

• Non-binding travel advisories

• Transport disruptions not caused by a covered event

• Changes to passport or visa requirements that were published at the time of booking

• A personal event or circumstance

Mastering Vrbo Cancellation Policies: A Key to Successful Hosting

As a Vrbo host, make sure you are knowledgeable of the cancellation policies available to you and how they work. By selecting the right policy for your needs, clearly communicating it to your guests and staying informed about platform changes, you can create a positive experience for both you and your guests. Remember, the right cancellation policy can protect your income, enhance guest satisfaction and ultimately contribute to the success of your vacation rental business.