This should be avoided at all costs whenever possible as it can be detrimental to a guests plans. If the need does arise, you should reach out to the guest as soon as possible and let them know what is going to occur. As far as the Dock Skipper platform goes, you can cancel a booking from your Booking Requests page within your account. The full amount will be refunded back onto the guests card and you will no longer be eligible to receive your payout.
Furthermore, your listing account will be penalized with a strike and a review will be placed on your listing indicating you cancelled a reservation. Too many strikes and your listing account can be permanently disabled.
As best practice, please be 100% sure you can accommodate a reservation prior to accepting the booking request.