Understanding Cancellation Policies: What Every Host Should Know

A cancellation policy is one of the most important decisions you make as a property operator. Set it too strict and guests hesitate to book. Set it too loose and you eat the cost of last-minute cancellations. The right balance depends on your property, your market, and the season.

Why Cancellation Policies Matter

Every cancelled booking is potential revenue lost. If a guest cancels the day before check-in, you probably cannot fill that room in time. A good cancellation policy compensates you for that risk while still making guests feel safe enough to commit.

Without a clear policy, disputes happen. A guest expects a full refund. You expected them to honor the booking. Nobody wins. Having a written policy. visible to the guest before they book. prevents these conversations entirely.

The Three Presets

Tuluyan offers three built-in cancellation policies. Each one is a starting point designed for a common scenario.

Flexible. Full refund if the guest cancels at least 1 day before check-in. Use this when you are in a competitive market and want to remove friction from the booking process. If guests are comparing your property against others and might be on the fence, a flexible policy tips the scale in your favor.

Moderate. Full refund at 5+ days before, 50% at 1+ day before. This is the most popular choice for a reason. It gives guests a reasonable window to change plans while protecting you from cancellations in the final days when rebooking is unlikely.

Strict. 50% refund at 7+ days before, nothing after that. Use this during peak season (Holy Week, Christmas, long weekends), for high-demand dates, or for events where you are turning away other guests to hold a reservation. The strict policy signals that this booking matters and the guest should be sure before committing.

Customizing Your Policy

If the presets do not fit, you can create custom rules. Want to offer a 75% refund at 14 days and 25% at 3 days? You can. Custom policies are defined as a set of rules. each one specifying a number of days before check-in and the corresponding refund percentage.

A common approach is to start with a preset and adjust based on experience. If you are seeing too many last-minute cancellations, tighten the policy. If your booking rate is lower than expected, consider loosening it.

What Your Guests See

Guests do not see policy names like "Moderate" or raw rules like "days_before: 5, refund_percent: 100." Instead, Tuluyan translates your rules into plain language on the booking page:

• "Free cancellation up to 1 day before check-in"
• "Cancel 5 or more days before for a full refund, or 1 day before for a 50% refund"

This keeps the experience clear and professional. Guests understand what they are agreeing to without needing to decode a policy table.

The Bottom Line

Pick a cancellation policy that matches your situation. Use Flexible to attract bookings in competitive markets. Use Strict when demand is high and cancellations cost you real money. And remember. you set this per product, not per property, so you can use different policies for different room types or seasons.