How cancellation policies on VRBO affect your conversions

Recently, I’ve been diving into discussions with property managers about how cancellation policies along with length of stay can be a game-changer for listing optimization—especially in saturated markets.

In my view, cancellation policies should be tailored to 3 key factors:

1️⃣ Market Dynamics:
Align policies with guest expectations and competitor offerings in your area.

2️⃣ Inventory Segmentation:
🏠 Larger homes: Stricter policies work well for advance planners.
🛏️ Smaller units: Relaxed policies minimize risk, as they’re easier to rebook quickly.

3️⃣ Distribution Channels:
🌐 Direct bookings: Custom flexible policies can differentiate and build guest loyalty.
📱 Short window OTAs like Airbnb: Slightly stricter policies reduce last-minute cancellations (avoiding the temptation to rebook at a discount with your competitor).

📊 Little Data Insight:

VRBO data from Hilton Head Island shows Moderate policies have the same cancellation rate as Strict (14%) but drive 5x higher conversions. Flexibility boosts bookings without increasing risk.

How are you tailoring cancellation policies across your portfolio?
Have you seen measurable impacts on conversions or guest satisfaction since after COVID times?
What tools or strategies are you using to get data insights, balance flexibility and revenue protection?

Let's connect! Book a free discovery call to see how we can help you with OTA levers outside of changing hero-shot and title.