What is Cancellation Protection?

Table of content

• How It Works
• Benefits for You as a Property Manager
  • Guaranteed Revenue
  • More Bookings
  • Additional Revenue Stream
  • Competitive Advantage
  • Limited Extra Work
• Why Travelers Value It
• Peace of Mind for Everyone

Cancellation Protection is a feature exclusive to Smily that helps you offer flexible booking options to travelers while protecting your rental income from last-minute cancellations, for bookings cancelled between 30 days and 24h before check-in.

How It Works

With Cancellation Protection, you can offer travelers two booking options:

Flexible Rate (with Protection) - Travelers pay a small supplement (typically around 13-15% of the booking value) in exchange for the ability to cancel and receive a full refund up to 1 day before check-in.

Non-Refundable Rate - Travelers get a lower rate but cannot cancel for a refund.

Example: 

1️⃣ Non-refundable rate (without Cancellation Protection)

• The guest pays around €120
• Booking.com takes its commission

👉 You receive ~€100

This is how it works today.

2️⃣ Flexible rate (with Cancellation Protection)

• The guest pays around €143
• This price includes:

- Booking.com commission

- Cancellation Protection

👉 You still receive ~€100

The cost of flexibility is paid by the guest, not by you.

What happens in case of cancellation?

If the guest cancels between 30 days and 24 hours before arrival:

• You receive 96% of the rental amount
• The guest is refunded
• No one loses money

📌 Key takeaway

Whether the guest chooses Flexible or Non-refundable:

• Your target revenue is preserved
• Cancellation Protection does not reduce your margin
• The extra cost is covered by guests who want flexibility

Benefits for You as a Property Manager

Guaranteed Revenue

Even when a traveler cancels a flexible booking within the coverage window, you still receive 96% of your rental revenue, which should be distributed as following:

• Owner: Receives 100% of their expected share.
• Property manager: Receives 80% of their commission.

More Bookings

By offering flexible cancellation options, you attract travelers who value peace of mind. Studies show that properties with flexible policies convert more bookings and achieve higher occupancy rates.

• Vrbo: "Properties with flexible cancellation policies have 3x more bookings than those with strict policies."
• Airbnb: "Hosts who replaced their strict or moderate cancellation policies with flexible ones saw their bookings for the following month increase by 10% or more."
• Booking.com: "73% of travelers said that free cancellation was one of the main reasons they chose to book with a specific property."

Additional Revenue Stream

You can include your own markup in the Cancellation Protection price increase, turning flexibility into a profit center. Every time a traveler chooses the flexible option, you earn extra commission.

Competitive Advantage

Major OTAs like Airbnb and Booking.com already promote flexible cancellation options. By offering Cancellation Protection, you meet traveler expectations and compete more effectively.

Limited Extra Work

The entire process is partially automated. Travelers get their refunds automatically, and you receive your guaranteed payour. You only need to fill a claim form post cancellations.

Why Travelers Value It

Travelers want the security of knowing they won't lose money if unexpected circumstances arise. By offering Cancellation Protection:

• Travelers book with confidence, even for trips planned far in advance
• You build trust and improve guest satisfaction
• Positive experiences lead to better reviews and repeat bookings

Peace of Mind for Everyone

Cancellation Protection creates a win-win situation: travelers get flexibility and peace of mind, while you get protected revenue and more bookings. It's insurance for both parties—backed by a licensed insurance partner, so you don't have to worry about compliance or legal issues.