How to Avoid Booking Cancellations
Strategies and tips to avoid holiday rental cancellations and their consequences
- Communicate your cancellation policies and accommodation details clearly to reduce cancellations.
- Offer guests the option to reschedule their booking instead of cancelling.
- Implement non-refundable rates with incentives like discounts or additional services.
- Use data and analysis to identify cancellation patterns and adjust your offer and communication strategies accordingly.
September 2024
As holiday rental hosts, one of the most common setbacks is a booking cancellation. A cancellation can feel like wasted effort, which can be quite frustrating. However, it’s not entirely wasted as it provides valuable information that can be used to improve your business model for the future. Keep reading to find out how to manage holiday rental cancellations effectively.
The first thing to understand is that holiday rental cancellations happen. Don’t beat yourself up about it. Cancellations don’t make you a better or worse host; people face unexpected events, change their plans, or reconsider their decisions. Accepting this naturally is crucial, but it doesn’t mean you should be inactive. On the contrary, it opens the door to explore why someone cancels and develop strategies to keep them in check. Here are some common initiatives among property owners to avoid holiday rental cancellations.
Holiday Rental Cancellation Policies: Determine Yours
Clear communication between host and guest is key to avoiding cancellations. Always fill in your property details thoroughly, specifying the exact location, available amenities, and any limitations. Explain if your holiday home has a good internet connection, appliances, and nearby supermarkets or restaurants. Accurate and detailed information reduces cancellations, while vague information creates doubts and misunderstandings.
During the booking process, provide professional and friendly communication to build trust and security, reducing the likelihood of cancellations. Clearly state your cancellation policies in writing and ensure the information is easy to understand. While an online presence helps clarify booking conditions and policies, reinforce this information through emails or calls. The rule: make all information crystal clear.
Suggest a Booking Date Change
When a holiday rental cancellation arises, the first piece of advice is to try not to lose the customer. Propose changing their booking date. Suggest an alternative date that suits them and agree on a change without costs if circumstances allow. This way, you can shift the guest to another spot in the calendar without the effort of attracting a new booking.
To facilitate this, offer some incentives for the change. For example, maximise calendar flexibility or add extra services like a parking space, free breakfast, partnerships with companies offering complementary activities (massages, kayaking, tours), or flexible check-in and check-out times. Link the change to added benefits.
Develop a Non-Refundable Strategy
While this policy might deter some guests, offering some advantages (like breakfast included or an extra free day) along with a “non-refundable” option ensures bookings and secures revenue. Alternatively, request a non-refundable advance and refund the rest if the cancellation happens within the specified period.
For a successful non-refundable strategy, transparency and clarity are crucial. Clearly state the non-refundable condition at booking and ensure the guest accepts it when validating the reservation.
Offer a Gift Voucher Instead
Transform a cancellation into a gift by allowing the booking to be transferred to another person as a gift voucher. Create a code that a third party can use on flexible dates, promoting the concept of “gift, don’t cancel.”
Additionally, encourage this change by offering a discount. This approach helps build loyalty among guests.
Leverage Data to Avoid Cancellations
Studying the core of cancellations can help you prepare to avoid them. This involves data analysis, using technology to enhance human intelligence, and improving decision-making for smoother bookings.
If you have enough data, analyse it to extract value. Identify peak cancellation periods, common reasons, the guest profile prone to cancellations, or the platform with the highest cancellation rate. Data is crucial in business strategy as it allows you to tailor offers to meet your target audience’s expectations more closely.
Nowadays, most holiday rental platforms and reservation management software can generate reports with relevant data. Use these statistical reports to improve your offerings.
Conclusion
As a host with a proactive approach, structure your offers well, with precise, transparent, and easy-to-understand information. Understand what your guests want, identify secure profiles, and design offers that meet their expectations. Once a booking is made, be creative with your cancellation policy and propose alternatives to avoid cancellations. Guests will appreciate your effort and good intentions, as no one likes to cancel a plan that initially seemed perfect.
Now that you know the most common holiday rental cancellation policies among hosts and companies, try implementing them if you haven’t already. You’ll see your cancellation rate decrease rapidly. You won’t regret it!