In our fast-moving world of instant online bookings, it's all too easy for guests to get carried away organising romantic mini-breaks and fun weekends away with friends. There's minimal risk for guests, cancellations are often free up until 48 hours before arrival, but for hoteliers, late cancellations or no-shows can be both stressful and costly.
Last year, two of the world's biggest hotel brands, Hilton and Marriott, introduced stricter cancellation policies after reviewing their hotels' booking and cancellation patterns. From June 2017, Marriott increased their fee-free cancellation period from 24 hours to 48 hours. A month later, Hilton followed suit, and for some properties, 72 hours.
“Recovering from a no-show can be difficult. You have an empty room and trying to fill it at the last minute can be a real challenge,” says Debrah Dhugga, the Managing Director of Dukes Hotel in London and Dubai. “Given that the majority of the bookings we receive are online, ensuring that the cancellation policy is visible is critical,” explains Dhugga.
“Because often you don't actually speak to the customer until they check into the hotel, it's important that once the booking is confirmed, the terms and conditions are sent out and the cancellation policy is clearly highlighted,” she adds.
Feeling the frustration
If guests are aware of where they stand when cancelling a booking or failing to turn up, they will be far less likely to. And even if they do, they will have been duly advised of the cancellation and no-show procedure and forewarned about being charged for the unused room.
“We’re a very small property with only six rooms, so no-shows can be particularly frustrating,” says Moya Connell, who runs The Barn at Roundhurst, near Haslemere in the UK. “We do give our guests the benefit of the doubt and assume there has been a problem. We try to contact them and if there is a genuine problem we'll rebook for another date at no extra cost. But if we hear nothing, then we will charge the full amount and speak to them the following day.”
Making sure you cancellation and no-show policy is crystal clear is key
But large or small, all of the hoteliers we spoke to agreed that it pays to use a level of discretion when dealing with a no-show or last-minute cancellation.
“I think the best way is to have a fair policy in place which is realistic on both sides,” explains Dhugga. “On the occasions when guests need to cancel a room, honesty is the best policy. Call the hotel and the hotel will explain their cancellation policy, so that the guests can understand where the hotel is coming from. Explain that we will try and resell the room, but be fair and don't be greedy about the situation, you might need that customer.”
Being crystal clear
To avoid problems and conflict between the hotel and the customers, make sure your no-show and cancellation procedures are crystal clear. “But the terms should be fair for both the hotel and the guest,” says Dhugga. “It shouldn't be a one-way system. For instance, if the full payment is taken upfront and then cancelled last-minute and the hotel can fill the room, it would be unfair not to refund the money.”
It's even more important to plan for and minimise no-shows when you're a small property. "We stopped taking deposit-based bookings around two years ago," says Dominic Worrall, owner of The Bull in Ditchling, East Sussex. "All of our rooms are now 100% prepaid, which means we minimise the stress of no-shows. Our guests are now offered a slightly more expensive ‘flexible’ rate or a cheaper ‘non-flexible’ rate. After introducing this policy, we now have a no-show rate of less than 2%.”
But has the rise in online booking agents fuelled more no-shows and cancellations? “Our policy is to take 50% deposit at reservation,” explains Laura Miquel, Director of Luxury Hotel, Alchimy in Albi, southwest France. “In our experience, taking the money upfront minimises the chances of a guest not turning up. I'd also like to propose that we have more non-refundable reservations at cheaper rates.”
While it's impossible to eradicate no-shows for good, by preparing guests in advance and instilling ongoing communication will help reduce the impact. In short, honesty is always the best policy.
Check out these short tips on reducing cancellations on Partner Help
- Communication is key. Make sure your no-show and cancellation policy is crystal clear and visible from the start
- No-show and late cancellation terms should be fair for both the hotel and the guest. It's not a one-way system
- Taking a deposit or payment upfront can reduce the impact of no-shows
- Offer reduced rates for full payment upfront. It's been proven that offering flexible and non-flexible rates can reduce no-shows
- Protect your relationship with guests and use discretion when dealing with a no-show or a last-minute cancellation