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Go to your guests booking, on the right should be a click button saying 'request to cancel'. I have been told by booking.com this is also for the host. They will get in touch with the customer first as if the customer has rung you directly to cancel their booking. They will then call you & you can explain. booking.com's terms and conditions say if you have let a room and not taken the room offline (closed it on your calendar) you are obligated to find the customer alternative accommodation of the same or greater value, the difference being paid by yourself.
Hope this helps
I've had the same problem, I've taken to logging on to a guests booking as soon as the review comes through to make a personal response via the messaging service. If you leave it more than a day though the message will not be sent.
It's so nice to hear your experience with this Gentleman - a true Gentleman! We once had a guest so infatuated with the Mike Myers character Austin Powers he wore the outfit & even the false front teeth (except when eating!). He was the nicest chap & had a lot of very funny stories too.
Guests like these are why we do what we do!