First time I did the GAP, I booked B&B's along the way. We rode Homestead to Connellsville and stayed at the Connellsville B&B, just off the trail. I just looked at their website - cancellation notice is 3 days. We rode to Rockwood and stayed at the Rockwood Trailhouse. Their current cancellation is 50% charge, unless notified two weeks ahead (that's pretty tough).
Bottom-line - having the reservations made sure we had a place to stay. Both places were full the nights we were there (mid-week, mid-July). Having the reservations also forced us to ride in the rain because of the cancellation policy. I guess it cuts both ways.
Side note - the Connellsville B&B has laundry facilities. We took advantage of that and it lightened our packing for the trip by one day's clothes.