Refunds for Direct bookings depend on two things:

Your cancellation policy
The amount already collected from the guest

This article explains how refunds are calculated and what happens when a refund is issued.

How Refunds Are Calculated

When a booking is canceled:

Only payments that have already been collected are considered for a refund
Future scheduled payments are not charged
The refund amount is calculated based on your cancellation policy

Refunds are based only on collected payments. Any future scheduled payments are automatically canceled and never charged.

What Affects the Refund Amount

Refunds depend on:

Your cancellation policy rules (for example, refundable vs non-refundable periods)
When the booking is canceled
The total amount already paid by the guest

What Is Included in a Refund

For partial refunds, different parts of the booking may be treated differently:

Accommodation cost → Refunded based on your cancellation policy
Cleaning fee → Refunded proportionally
Taxes → Refunded proportionally
Service fee → Not refunded for partial cancellations

If the booking is fully refunded:

The guest receives the full amount paid, including the service fee

Legacy plans with Direct Basic do not charge a guest service fee on the booking because the host pays a monthly Direct add-on instead.

On Direct Basic, Stripe processing fees from the original payment are not returned by Stripe, even on full refunds.

Refunds for Pending vs Accepted Bookings

Pending Bookings

If a booking is pending:

No payment is collected
No refund is needed

This includes:

Booking requests
Custom quotes sent to guests

Accepted Bookings

If a booking is accepted:

Refunds are calculated based on:
- Your cancellation policy
- Payments already collected

Any future scheduled payments:

Are not charged
Are automatically canceled

Host vs Guest Cancellation

Who cancels the booking affects the refund outcome:

Guest cancellation → Refund follows your cancellation policy
Host cancellation → The guest is refunded in full

If you cancel a booking as the host, the guest always receives a full refund, regardless of your cancellation policy.

Issuing a Refund on a Non-Refundable Booking

Even if a booking is fully non-refundable under your cancellation policy, you can still manually return money to the guest.

Hosts can issue a partial or full refund:

Before canceling the booking
Or up to 14 days after the booking has been canceled

This is done using the Send or Request Money feature in the Inbox.

You may choose to:

Offer a goodwill refund
Return part of the payment after a guest cancellation
Resolve a guest concern or dispute
Refund cleaning fees or taxes only

For Direct Premium:

Refund adjustments are recovered from future Hospitable payouts if needed

For Direct Basic:

Refunds are deducted directly from your connected Stripe account
Refunds are not offset against future Hospitable payouts
Your Stripe balance must have sufficient available funds

If your Stripe balance is too low:

The refund may fail
Your Stripe balance may become negative

Any amount manually refunded is deducted from your payout or connected Stripe balance, depending on your Direct plan.

If the booking uses scheduled payments:

Future unpaid installments are canceled automatically after cancellation
Only collected payments can be refunded

Hospitable Inbox showing the Send or Request Money option for a Direct booking reservation

Example: Refunds With Scheduled Payments

Here’s how refunds work with partial payments:

Booking total: $1,000
Payment schedule:
- $500 at booking
- $500 later

If the booking is canceled after the first payment:

Only the $500 collected is considered
The second payment is not charged
The refund depends on your cancellation policy

Example:

If your policy retains 50%, the guest receives $250
The remaining unpaid $500 is never charged

Premium vs Basic Refund Handling

The refund amount the guest receives is based on the cancellation policy. The difference is how the refund is processed.

Direct Premium

Refunds are handled through Hospitable payouts.

If a refund is issued after payout:

A payout adjustment is created automatically
Future payouts may be reduced until the refund amount is recovered

Manual refunds issued through Send or Request Money are also recovered through Hospitable payouts.

Direct Basic

Refunds are processed through your connected Stripe account.

If a refund is issued:

The refund is deducted directly from your Stripe balance
The refund is not offset against future Hospitable payouts
Your Stripe account must have sufficient available funds

If your Stripe balance is too low:

The refund may fail
Your Stripe balance may become negative

Manual refunds issued through Send or Request Money are also deducted directly from your Stripe account balance.

What Happens After a Refund

What happens after a refund depends on why the refund was issued.

If the booking was canceled:

The reservation is no longer active
The dates become available on your calendar
No further payments are collected

If the refund was issued without canceling the booking:

The reservation remains active
The refund is recorded in the booking’s payment history
Future scheduled payments (if any) continue as planned

Refund Receipts for Guests

Every refund processed on a Direct booking generates a downloadable PDF refund receipt in the Guest Portal Payments page.

This applies to:

Automatic refunds issued through your cancellation policy
Manual refunds issued through Send or Request Money in the Inbox
Full refunds
Partial refunds

Guests can also download a reservation summary PDF from the top of the same Payments page. These documents can be used as proof of refund for personal records, expense reporting, or card issuer disputes.

You do not need to email a separate receipt to the guest. Refund receipts become available automatically in the Guest Portal as soon as the refund is processed.