Non-refundable Policies for Holiday Rentals
June 2026
Have you considered implementing non-refundable policies as part of your holiday rental business? These may seem controversial, but they can, in fact, have major benefits for both property owners and guests. Let’s take a look at how they work and how you can use them responsibly for your business.
What are non-refundable holiday rental policies?
Every holiday rental owner has to consider their rental policies. Generally, different holiday rental portals will have guidelines or rules about what kind of policy they permit. For example, a flexible refund policy may allow guests to get a full refund if they cancel with a 24-hour notice, while a moderate policy lets guests cancel up to five days in advance for a refund. On some holiday rental websites, hosts can also request a non-refundable deposit, meaning the guests will just lose a portion of the total booking cost if they cancel.
A non-refundable holiday rental policy is exactly what it sounds like: guests cannot get a refund, no matter how far in advance they cancel. They pay 100% of the booking fee when they first make the reservation and may not get that money back, even if they cancel just a few hours later.
Advantages of non-refundable holiday rental policies
Non-refundable holiday rental policies can be extremely appealing to hosts – but what about guests? You might worry that guests will look elsewhere for their accommodation since they are seeking greater flexibility. However, before you set your holiday rental refund policies, consider these advantages:
Lower cancellation rates
Cancellations are a problem for many holiday rental landlords. A cancellation is actually a double whammy of an issue. Not only do you lose money from the cancelled booking, but you also have a property left vacant, so you miss opportunities.
A non-refundable policy means that you’ll get fewer time-wasters looking to rent your holiday apartment. Even if the occasional cancellation still happens, you won’t lose income from it.
Reliable income
In the world of holiday rentals, financial security is always welcome. When you know that your booking money is coming in, regardless of cancellations, you’ll feel more confident. It will also allow you to plan the future of your business more effectively.
Increased bookings
This may come as a surprise – but many hosts report seeing bookings increase when they implement a non-refundable policy. The reason why is simple: on several holiday rental websites, you can set a slightly lower nightly rate for guests who agree to book on a non-refundable basis. This means guests will have to decide what’s more important to them, flexibility or price. In the majority of cases, price wins — this leads to more bookings.
Fewer disputes
This is a benefit for both hosts and guests. A flexible policy will inevitably lead to cheeky guests arguing with you. This means you’ll spend more time trying to manage holiday rental refunds, answering emails, and getting dragged into back-and-forth disputes. You can eliminate this problem altogether with a strict policy.
How to set non-refundable holiday rental policies
First of all, check the policies in place for the different platforms you use. Depending on where you advertise your holiday home, you may find it easier or more difficult to set a non-refundable policy. Some portals, such as Airbnb, prioritise listings with more flexible holiday rental refund policies.
Take a look at your competition. If flexible policies are the norm in your area, you’ll need something to stand out. In this case, it makes sense to set a lower price so you can still attract guests.
Make sure your policy is outlined clearly in your listing. Holiday rental portals will usually provide specific fields for you to fill in. However, wise hosts will mention the non-refundable policy in their property description, too. Remember, some guests may try to argue that they didn’t understand your policy when they made their booking. If it’s clearly explained twice, then they’ll have a harder time arguing their corner.
The legal implications of your holiday rental refund policy
Before you set any kind of refund policy, check the relevant laws in your area. Of course, legal issues vary depending on your country and region. Be aware that some of your guests are likely to have a good knowledge of local laws, so it’s worth checking things over with a lawyer before you set anything in stone.
Most countries allow holiday rental owners to set non-refundable policies, but sometimes there may be conditions attached. In 2019, a hotel in Milan fell foul of the Italian courts during a dispute with a customer over a cancellation. The judge ruled that, as the hotel had made no attempt to rebook the cancelled room to another customer, it was not acting fairly. As such, the hotel was forced to return the customer’s money.
You may also want to consider the case of force majeure. If a booking is cancelled due to a natural disaster, pandemic or war, will you offer a refund? Many holiday rental portals will force you to offer a refund in this situation. You’ll still want to clearly outline what constitutes force majeure, though. During the 2020–2021 period, many holiday rental landlords who usually maintained non-refundable policies started to offer refunds to guests who could prove they had tested positive for COVID-19.
In fact, you may want to adapt your refund policy during times of great uncertainty. When a pandemic leads governments to set ever-changing lockdown rules, guests who normally value price over flexibility are likely to change their priorities and opt for refundable properties instead.
Communicating and explaining a strict holiday rental refund policy
Again, make sure your policy is mentioned clearly in your property description. Don’t hide it away in small print at the bottom of the page — this is a deceptive practice that will only cause ill feelings from guests.
When someone makes a booking to rent your house for holidays and then cancels, be polite but firm in your communications. Maintain a professional tone at all times, even if your guests do not.
Keep in mind that, at times, this may be a difficult and unpleasant task. For example, a guest may want to cancel their booking due to a family bereavement. In this case, you can be understanding and offer condolences, but your policy remains in place.
Keep a copy of all communications with guests. This is important for two reasons: firstly, guests may try to start a dispute with you over the cancellation. Secondly, they might leave a negative review about your business. You can reply to this in a polite, professional manner, citing your policies and communications.