Airbnb and Bachcare cancellation terms risk breaching Fair Trading Act

Hosts are able to choose a cancellation policy for their listing based on a set of options. (See below)
These are clearly displayed and known when someone books the property. i.e. You have a choice NOT to stay somewhere with a strict no cancellation listing when you make your booking.

For example when I went to the Edinburgh Festival last year I found the majority of places had a strict cancellation policy - i.e. no refund under any circumstances. Needless to say I looked harder and found a place with a more flexible policy - just in case, specially when booking months ahead! Airbnb has since softened this option as noted below - it used to be no refund under any circumstances or advance notice.

From my own experience I know that Airbnb penalises a host for cancelling a guest's booking (even when the host has never done it before and when giving the guest several weeks' notice to find somewhere else), and strips the host of their superhost status.
So Airbnb can be hard on the host too.

Cancellation policy
For stays under 28 nights, you can choose which cancellation options to offer guests.
Flexible - Full refund 1 day prior to arrival
Flexible or Non-refundable - In addition to Flexible, offer a non-refundable option—guests pay 10% less, but you keep your payout no matter when they cancel.

Moderate - Full refund 5 days prior to arrival
Moderate or Non-refundable - In addition to Moderate, offer a non-refundable option—guests pay 10% less, but you keep your payout no matter when they cancel.

Strict - Full refund for cancellations made within 48 hours of booking, if the check-in date is at least 14 days away. 50% refund for cancellations made at least 7 days before check-in. No refunds for cancellations made within 7 days of check-in.
Strict or Non-refundable - In addition to Strict, offer a non-refundable option—guests pay 10% less, but you keep your payout no matter when they cancel.

I've had to cancel AirBNBs and other accommodation for a number of reasons from a death in the family to Covid. I've always found the hosts to be reasonable no matter which 'cancellation policy they were using but would have accepted if they applied the rules I signed up for.
I think the law should not allow a host to effectively get paid twice but it should also not allow users to cancel last minute for no reason or cost. I know some people who book several places and only cancel quite late when they choose one or even change their mind based on the long range weather forecast! If the host can not re-sell the nights they lose income. Is it any more fair to have them lose than the user who was told before they bought what the policy is?
People need to accept some responsibility for their own actions.

I believe refunds policies should be reviewed. I was an Airbnb Host and Hosts can choose to refund even though Airbnb says No. I went to strict cancellation policy because guests were booking multiple accommodations then cancelling close to the time after they had chosen which one to go with and they received full refunds and the Hosts could be left with no earning and it being too late to book another guest which is also unfair. After moving to strict cancellation policy I invariably still refunded guests in full who needed to cancel for whatever reasons trying to be fair even though some of the reasons were dubious. If it was a few days out from the booking I tended to still charge approx $25-$50 depending on how close to the booked nights it was so I didn't miss out on earning something. Hosts do have costs in preparing rooms eg cleaning. If it was more than 7 days out then I tended to ask Airbnb to give a full refund and hope I could rebook. Airbnb sometimes also waived their fee and sometimes they didn't but I didn't have control over what they did. But Hosts have full control over how they manage their Business and whether they refund or don't. Most do I think. I had a booking for Dec this year then because of Covid they cancelled. I asked Airbnb to give a full refund because of the circumstances which they did and they also agreed to refund their fee as well. I have since closed my Airbnb. So the Hosts themselves have the power to over-ride the policy and grant a refund. It is not just the Airbnb organisation who makes these decisions. Please look fairly at all sides of the argument. On the flip side I have had bookings myself with Hotels in the past and had to cancel and did not receive refunds so I hope you are including these in your investigations as well.

What the *** Seems these air B&B owners perceive themselves they are above everyone else , i have booked many a room on- booking dot com - expedia etc with motels , lodges etc and almost always got a full refund even the last one i just had to cancel one week out !! if you are in the business of suppling very short term rental accommodation of course you cannot expect 100% of your bookings to be fulfilled, you should refund even moraly as good will ! and get happy return customers plus everyone they know

There are two sides to a cancellation. If you are a property owner, accept a booking which takes the property off the market, and then have it cancelled for whatever reason, you may not be able to re-let the property. If you were to refund the payment for the let then you are losing income - is that fair? If you were to subsequently re-let the property for some or all of the period with no loss of income then ‘fairness’ could dictate that a refund is due and reasonable - ie. double dipping would be avoided. People who let property should not be expected to pick up the costs of other peoples situations!

full refunds from airbnb are at the discretion of the host. When a guest cancels airbnb will message the host giving an option for the host to provide a full refund. If the host does not, that is the hosts choice.