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Our top 5 tips on managing cancellation policies

By July 23, 2019 No Comments
We have many discussions with our clients seeking advice regarding their cancellation policies. Some are unsure what kind of policy they should have in place or what the industry ‘norm’ is, and many  feel guilty for charging cancellation fees so don’t stick to their own policy. How do you know when to charge and when to show empathy to a guests situation and let it slide?!

Don’t stress! Our Operations Team Leader, Mikaela Old has put together her advice on how to have a solid plan…

Mikaela’s top 5 tips on managing your policies;

  1. Create a clear policy that works for your business outcomes. Consider the average lead time of your bookings, and the likelihood you would be able to resell the room if the guest was to cancel during that particular time period. Determine how much flexibility you have in advance and try to stand by your terms when you need to.
  2. Reduce last-minute group cancellations that come via your online travel agents. In the past, properties could add a note to the OTAs to show that different terms apply for group bookings of 3+ rooms. However, both Booking.com and Expedia are both now restricting any customised content on their sites – making it extremely difficult for properties to communicate this kind of policy to the guest before they make a booking. What this means is that it’s now up to you to try and minimise the risk of a last-minute group wash. How? You can pay attention to bookings made in quick succession for the same date or under the same name, and contact the guest early to better understand their intentions.
  3. Identify situations where a cancellation should definitely be charged in advance; create a list of common excuses that you should always stand firm on, and if you do need to charge try not to feel guilty about doing so – remember this is your business and the guest confirmed their booking under those terms
  4. Have some “Plan B” alternatives to waiving a cancellation to offer guests wanting to cancel a booking as a means to compromise. For example, you can offer a non-refundable date change, or fee reduction instead?
  5. Talk to Rooms Online regarding the features the OTAs have implemented to reduce cancellations; For example, Booking.com in particular have researched heavily into this area, so it’s likely we’ll see more features in the coming months (see Booking.com article here)

About Mikaela Old, Operations Team Leader at Rooms Online

Before joining Rooms Online, Mikaela worked with a Wellington hotel for several years. She gained experience in every department of the hotel to get a broad knowledge of how each worked. Originally from Taranaki, Mikaela had moved to Wellington to finish her university degree and loved the city so much that she never left! In her spare time Mikaela loves to run, and is always on the lookout for the next half-marathon or running event. She also loves travelling around New Zealand to explore new areas.