Airbnb has retired its Strict cancellation policy and is rolling out a new Limited option as part of a broader shift toward guest-flexibility. Hosts can no longer choose the Strict policy for new listings. Instead, they must select from one of Airbnb’s four standard options: Flexible, Moderate, Firm, or the newly introduced Limited policy.
Airbnb says the change is backed by data: hosts who switched from Strict to Firm earned 10% more on average. And nearly half of guests (44%) now say free cancellation is a top priority when choosing where to stay.
Here’s what hosts need to know:
1. Action is Required to Keep a Strict Policy
Hosts with existing listings set to Strict will automatically be converted to Firm unless they manually opt out and choose to retain Strict by October 1st, 2025. After that date, Strict will no longer be available except by special invitation.
2. 24-Hour Free Cancellation Is Now Universal
All cancellation policies will include a 24-hour grace period starting Oct 1, 2025. For example, If a guest books a short-term stay (less than 28 nights) more than 7 days before check-in, they can cancel within 24 hours for a full refund. This applies globally, standardizing the experience across listings.
3. Listings That Keep a Strict Cancellation Policy Lose Visibility
Airbnb now highlights listings with free cancellation beyond 48 hours in search results. That means potentially lower quality listings with more flexible policies can get better placement than higher quality listings with strict policies.
4. The New “Limited” Policy
The Limited policy offers a full refund if the guest cancels at least 14 days before check-in. If they cancel between 7 and 14 days out, hosts receive 50% of the payout. Inside 7 days, hosts are paid in full.
Our Take
While Airbnb is positioning this as a guest-friendly move, the implications for hosts vary.
For high-value or seasonal listings booked months in advance, the risk of late cancellations is massive. If a guest cancels 30 days out on a $10K booking made six months ago, there is a good chance that the listing will not be able to rebook at the same full price on short notice.
Still, others see this as aligning Airbnb more closely with hotel standards, where more flexible cancellation policies have been the norm for years.
The bottom line: Airbnb’s competition with hotels is bringing a deliberate push toward guest-centric flexibility, often at the expense of hosts. Hosts may need to adapt to the shifting expectations or risk losing search traffic and bookings.
