Being an innkeeper who both has an extremely guest friendly cancellation policy and is still stinging from the hurt of a very recent last minute 11 night booking turned 11 night cancellation with little to show for it, I've got some views on this.
They are completely biased and riddled with anger and inner contradiction over my caving in on my policy with this guest.
I got a total Dr. Jekyl and Mr. Hyde pulled on me as soon as the application of the policy and often do as soon as it is going to cost somebody something.
This guest's wife had made the reservation because he was told by his contractor "Leave immediately and get to Los Alamos, ASAP, we need you there for two weeks"
He is a sub-contractor so I couldn't go after the contractor because he is required to make his own travel plans and then get reimbursed.
Whether the reservation is made 2 days or 2 months from arrival, I always ask "Would you like me to read you the cancellation policy?" It is also available on the booking page of our website, included in the email and hard copy mailed confirmation all guests receive.
Our language also includes this:
"By requesting a reservation at our B&B, you automatically agree to inform yourself of and abide by all of our cancellation policies as they are stated on the availability calendar page of our website, this email and in the guest information card you will receive with your confirmation packet."
While firmly in the "education" camp of innkeepers in order to save fellow innkeepers from experiencing the same behaviors on other fronts, the application of cancellation policies is so individual its hard to paint all circumstances with the same broad brush.
About the only satisfaction I got out of the deal is that I showed great restraint, diplomacy and patience with someone who didn't deserve it, lied repeatedly and hurt my good relationship with a hotel up the road, because she also cancelled all the nights there I had helped get for her husband that we couldn't offer. Not that a big hotel like that probably cares much, but its important ot me that I not be associated with anybody getting jerked around.
We've already rebooked five of the eleven nights, got 20% of the deposit from her and made it clear that this person would never be welcome in our home, so my pain with subside. By accepting this and not pushing too hard for her to accept the voucher, we free ourselves of never having to deal with her again and cover some of our fixed costs. The new replacement bookings will cover the rest.
We offer a "deposit voucher" for cancellations under 7 days from arrival. It is 50% of the stay regardless of if the room is rebooked or not. This is a huge courtesy and consideration we are extending and they can take it or leave it. Most never use it, often the room is rebooked and we preserve our good name and goodwill by offering it in a time of need.
Stick to the letter of the policy and damn the torpedoes on the guest's
"unhappiness" about being held to the agreed upon policy. The type of guests who reveal they don't respect you as soon as it will cost them money to cancel including in the case of a family tragedy or illness, aren't worth negotiating with, fretting over their next "try" to come, etc.
Also, don't worry about bad reviews when deciding on how to handle a cancellation. Remember that 99% of our guests, respect our policies, honor their reservations and when they must cancle they accept that some kind of charges are due. If its an obvious case of somebody not honoring your policies, other travelers with any kind of brains will look upon you getting slammed in a review with resentment towards the lout, not you.
Kind of like how real sports and subsistence hunters look upon "slob" hunters who trash a place, hunt out of season, poach, etc.
When I sit back and look at all the cancellations we've ever gotten where a stink was made by the guest about charges, in most cases they revealed themselves as people that just wouldn't be a good fit to begin with, so we just move on.
While we can't choose all of our guests, here we really cross our fingers that the vast majority are those that really want to be here, already possess some basic respect for others and have done a little homework to make sure we're the right place for them..