Airbnb will up its maximum penalty for hosts who cancel last-minute from $100 to $1,000

• Airbnb is changing its cancellation fee policy for hosts from August 22.
• Hosts who cancel reservations last-minute could face a fee of up to $1,000.

Airbnb is changing its cancellation policy so hosts who suddenly cancel guests' reservations could pay a penalty ten times higher than what they pay now.

Currently the maximum penalty for hosts that cancel reservations less than seven days before check-in is $100. From August 22, the maximum fee will be $1,000, Airbnb said in blog post Wednesday. Fees are deducted from hosts' future payouts.

Airbnb said it is changing its policy to crack down on hosts cancelling on guests unfairly.

"When Hosts cancel on guests for preventable reasons — such as accidentally double-booking or wanting to host friends and family instead — guests lose the confidence to book on Airbnb, and this affects all Hosts and hurts our entire community," the company said.

"We found that this fee structure doesn't adequately reflect the costs of moving guests into a similar or better place, often at the last minute, after a Host cancels for an avoidable reason," it added.

Airbnb did not immediately respond when contacted by Insider to ask why it is waiting until near the end of the summer holiday season to enact the new policy.

Hosts will still be able to apply for exemptions to the fees if they have to cancel for a valid reason such as emergency repairs to the property or personal illness.

Hosts are also allowed to cancel reservations if they can prove a guest intends to throw a party at their property.

Airbnb permanently banned house parties in June, solidifying a temporary ban it introduced in August 2020 in response to the COVID pandemic.

"Over time, the party ban became much more than a public health measure," the company said in June.

"It developed into a bedrock community policy to support our Hosts and their neighbors," it added.

This summer has seen a strong rebound in international travel, leading to widespread travel chaos as airlines struggle to cope with the renewed demand.