How to balance the demand for flexibility with your revenue goals
The ability to change travel plans remains vital to today’s travellers, with 90% of our customers booking flexible rates for this year’s summer months. Offering a mix of rate plans and taking advantage of our flexibility features can help you meet this traveller need while reducing the risk of cancellations.
Using rate plans to your advantage
We know that winning occupancy during this key season is crucial. In a bid to secure revenue, it can be tempting to opt for a strict cancellation policy. However, this could create a false economy as we see customers are significantly more likely to book a property with fully flexible rates.
Reassuringly, in May we disclosed that we’re observing a lower rate of cancellations compared to the end of 2020. So while travellers are proactively seeking out flexible rates, that doesn’t necessarily translate to an increase in cancellations. We see that travellers are willing to pay more for the peace of mind flexibility provides, which can make flexible rates the more lucrative option in the long run.
That said, when combined with flexible rates, offering non-refundable rates plays an important role in ensuring you attract a variety of customers. Helping to secure more guaranteed bookings, non-refundable rates are especially attractive to travellers on a budget. This is important when you consider that 62% of travellers say they will be more price-conscious when it comes to searching and planning a trip following Coronavirus.
An easier way to modify dates
To further reduce the likelihood of cancellations, we’ve recently rolled out flexible date changes, enabling you to either change dates or request date changes depending on the reservation. The feature comes at a critical time given the current volatility of travel. For example, if a guest is unable to travel to your destination due to Coronavirus restrictions, you can now easily initiate a date modification yourself – which can help discourage cancellations.
“When the pandemic hit, we rapidly started developing a tool that would allow partners to handle guest date modification requests before check in,” says Teodora Colic, Senior Product Manager at Booking.com. “There was always a guest and partner desire to be able to resolve date changes by themselves, but the pandemic increased this demand and accelerated the urgency to find a solution.”
“From the partner perspective, this tool enables them to resolve guest requests faster,” she continues. “It also allows them to maintain revenue by offering a date modification instead of a cancellation to guests who are forced to change their plans. In addition, we have continued to add flexibility to the process. For example, partners can now also change the length of stay for reservations with any cancellation policy.”
While the pandemic amplified the need for flexible options, plans can always unexpectedly change for a variety of reasons. “We see the feature has value beyond the pandemic, too,” says Colic. “We have the opportunity to work on developing even more flexibility around what can be modified, so this is what we will be focusing on in the coming period.”
In addition, our one date change tool allows guests to modify reservations with a non-refundable cancellation policy. If you would like to offer this free date change to guests, you can set this up in the extranet. Designed to help you strike a balance between getting bookings and securing revenue, offering one date change to travellers can give them more peace of mind to book a stay with you.
- Flexibility remains imperative, with 90% of travellers booking flexible rates for this summer
- Reassuringly, we’re also seeing improved cancellation rates compared to the levels we saw at the end of 2020
- When combined with flexible rates, offering non-refundable rates can help you attract a variety of customers
- To further reduce the likelihood of cancellations, partners can now offer flexible date changes to guests