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Show and Tell: Cancellation policies. What’s yours?

Imagine that you’re brand new to Booking.com. As you’re setting up your property, what should you take into account for your cancellation policy?

Do you offer free cancellation? Set your policies according to the season? Make exceptions outside of your policy?

Share your cancellation policy with the community in the comments below.


187 Replies

6
michael beeston

I understand what you are saying BUt you can cancel a credit card transaction/charge back when just about buying anything with today's technology.....It has not happened to me BUT has it happened to anyone else ???? with Booking.com ????

7 months ago
7
pibomarco

I didn't quite understand, but happened to me twice when I charged guest credit card for a cancelation fee or no-show using my terminal. Transaction went through succesfully and after a while I received a notification from my terminal provider, that the deducted money will be refunded to the guest. The guest made a claim via their card provider VISA or MASTERCARD that he didn't authorize the transaction. In this case the money will automaticly be refunded and you can't do nothing about it.
I think this can not happen when you receive payments via Payments by BDC or Online payments.

7 months ago
9
M Adamopoulou

pibomarco you are right. Payments through booking.com are more safe. Although you get paid after a month guests checkout and banks charge you for commission.

7 months ago
3
Lu_Madrid

HI Reservations ,

I believe that it is possible in some cases, as pibomarco says when a customer goes to their credit card provider and claims not to be happy and/or stating that the transaction was not allowed by the guest. In that case, some banks do the refund to the guest manually. I have only heard about this type of situations. I haven't experienced it myself (and I hope I won't - touch wood-). I am not sure what can be done after that.

Has anyone been able to claim that back after charging a customer?

7 months ago
3
Lu_Madrid

Hi M Adamopoulou ,

I am not using the non-refundable rate because I know some guests do not understand what it means and they may want to change the dates and/or cancel the booking.

Do you think there's a higher possibility for guests to do what Reservations say when it comes to non-refundable bookings?

Reservations , did that happen to you in many occasions?

7 months ago
9
M Adamopoulou

Lu Madrid I have only some days in low season with non-refundable policy. So far have no problems but its my first year so my experience is very little, maybe some other partner can answer your question. With so many problems with credit cards I am stuck to payments by BDC even though it costs me more.

7 months ago
7
pibomarco

I was pissed, I've tried to claim it back with providing the "proof", confirmed booking on BDC etc...I was told, that the guest can say that he didn't make the booking on BDC ect... basicly there is no solid proof if you charged the card "on the distance" and not physically. Also it is possible that guest wasn't aware what he was charged for, so after you charge them, send them also a notification about the charge.

I have a non-refundable rate the first year now. If the guest wants to modify or cancel for free I told them to contact BDC and when BDC contacts me I either confirm or decline the request.

Payments by BDC costs you more? I didn't notice any additional costs because using this service.

7 months ago
6
michael beeston

Wow..that is unbelievable.....No proof ???..because it was a distance and not physically.............I agree pibmarco..I also would be dissed !!!.When I take a booking and charge 30% deposit and I ALWAYS send a confirmation saying the 30% has been debited against their card BUT it seems Booking have their own Rules.....not good.

7 months ago
3
Lu_Madrid

Hi pibomarco,

Thanks for your info! Well, I guess we'll have to send the guest as much info as possible as to make sure they are aware of what they are being charged for. If a guests breaks something and it is something we cannot fix, we usually send an invoice with the amount of money they will be charged.

I do not know whether BCD charges more for charging in advance or not, M Adamopoulou . I thought they only sent the money to you a month later and that should be it... We haven't used that service yet because our property is not that big anyway and we're just starting. We might try it in the future.

7 months ago
6
michael beeston

Hi Lu..............as I said before we only use Booking for the guest confirmation/booking and receive the 30% deposit on our Efpos ( Australian Credit card machine) before they arrive ( even 3/4 months in advance) and then charge the guest on the day of arrival, when I do the meet and greet, so it works well.we have had no problems so far, except when we did not take a deposit in the beginning and therefore had cancellations !!! and could do nothing about it..It happened a few times and I rang booking and their answer ---"what do you want us to do about it..you didn't take a deposit and have no credit card number. !!!! THAT HAS STOPPED and all is very good now...hope this is of some help. The machine costs approx $10 a week and the money is transferred immediately.

7 months ago
9
M Adamopoulou

Thank you all for the valuable information. So much to learn from everybody.

A nice day to all...

7 months ago
1
Jezwhitaker

I have just emailed a report of our cancellations to Booking.com from 1st December after another 2 bookings cancelled last night. One is inside our no refund policy and the other is 6 days outside so there will be no charge. These are bookings during high season and were booked Nov 2 and Nov 5 so have stopped other guests that actually want to stay from seeing our availability for over a month. No message from either guest as to why they are cancelling and our policy will be enforced.

For general info, we are a 4 room guest-house and every room is different so cancellations hurt us. Booking.com is also the worst channel for this. Between Dec 1 and the furthest cancellation out (about mid Feb at this stage) Booking.com has 33 cancellations. Agoda (also Priceline) 6, Expedia 2 and CTrip 1. Incidentally Expedia last month overtook Booking.com as the most room nights sold... so it suggests maybe we should just go non-refundable on Booking.com and save ourselves all the grief! Might be interesting for others to share their booking cancellations.

7 months ago
2
Enquiries

I also find more cancellations, invalid credit cards, fake credit cards, nonsense phone numbers are most prevalent with Booking.Com customers than any other OTA. I wish Booking.Com took all the pre payments for bookings. They do not do that here in Australia. They do offer the guest prepaid or pay on arrival. most choose pay on arrival. We have a 48 hour cancellation policy charging the full booking amount in default. The offending false information often results in no shows followed by loss of revenue. If Booking.com was responsible for all payments we would not have to deal with the awful guests who provide invalid information.

7 months ago
6
michael beeston

Hi enquiries..I would have to agree..with booking in the past before we had the 30% deposit, they were the worst for cancellations BUT they have also turned out the best for our accommodation bookings so we go with the flow..BUT as I have said many times we use the 30% deposit and it works extremely well.??

7 months ago
1
Mazen

Hi Laura,

We, usually, set the Cancellation Policy based on seasons. However, and in order to drive more MPI, we give more flexibility on the Cancellation Policy during low and medium demand periods

We usually set the cancellation by 24hours prior to day of arrival, till the pick up becomes healthy, and after that it might be changed to either 72hours or Non Refundable based on the seasons. Makkah City is a different case esp. during Hajj (Pilgrimage Season) and Ramadan Period, where the Hotels there are totally Closed for Hajj season. And set as Non refundable for the last 10 days of Holy Month of Ramadan

Best Regards,

Mazen kh

7 months ago
7
pibomarco

I'm selling 20 units at my property. 3/4 of all bookings I receive from BDC, the rest are from AirBnB, Expedia and direct bookings.
More bookings from particular OTA could ofcourse lead to more cancelations comparing to other chanels. Specially if you are very flexible with your policies those chances are higher.
Setting strict policies was my best decision so far. Less anger and hatred, less (almost 0) cancelations, 0 no-shows, less work, maybe very little less bookings (in low season).. Anyway It's worth it (in my case).

7 months ago
3
Lu_Madrid

Hi everyone!

I'd also like to set up a non-refundable, more strict cancellation policy or a x% deposit for the bookings. However, I have seen that it might discourage some guests to book?
I guess it might be because of all the lodgings available in the center of Madrid. People will look for the best option for them: price, quality, ratings, flexibility... Since our property is small and due to the high expenses, we are forced to set our prices a little higher than other properties, meaning that, somehow, we would have to play our cards differently.

May I ask what type of accommodations you have and what kind of customers you usually host? pibomarco and michael beeston .That might be helpful to some of the newbies like me to decide what's best to do as I can see you have been working in this for a very long time!
Since we're new, we are trying new methods and that might be useful information :)

7 months ago
7
pibomarco

Mine is B&B, 2km out of the main city center (very popular turist destination) situated on a stand alone / peaceful location. I was oriented to couples, big families with babies and children (mostly Israel, Arab), groups ect..
The last season I went all in: specially in high season. Strict policy, I don't accept pets, don't accept infants and children to 12y, and got rid of the extra beds, so I aim more to young and older couples and small families. I even increased the rates a little bit. I was still fully booked.
It really all depends of your property location and presentation, offer, market demand, competition, ect..
I would say that the best way is to take a little "risk" and just try it (at least in high season) when the demand is high and you can do the comparisment... even BDC is sending you some stats and comparisment to a previous season and other properties in your area ect..

7 months ago
3
Lu_Madrid

Yes, I guess it really depends on everything: location, type of guest, etc. pibomarco That is a good point. I think that would be a good option and try in high seasons first and see the results :) Thanks for the tip!

We have actually tried many policies and we are doing better than before so far. We are aiming for a better time management and less cancellations though.

As for what Jezwhitaker says about having more cancellations on BDC, it is true, but so far it is the OTA that more people use, meaning that the incoming bookings percentage is also higher than the other ones. At least in our case... So, obviously, our cancellations percentage on BDC is also higher.

7 months ago
1
Jezwhitaker

The interesting thing is that Expedia this month passed booking.com as our main channel with 1/10th of the cancellations at the same price, same rate, same everything.... Booking.com has been smashing it for 6 months. But before you get too happy that Expedia is the new greatest channel. THAT WAS NOVEMBER, this month AIRBNB is smashing all of the competition.The insight to take from this is Booking.com will give you lots of cancellations so set you policy for 30% refund outside of a month... the rest can be less than that. I believe you just penalise the channels that give more cancellations with stricter cancellation policies and eventually you hit balance - we haven't hit it yet!

7 months ago
3
Lu_Madrid

Hi Jezwhitaker,

That's interesting. Is your property in the US? Our property is in Europe and Expedia doesn't seem to be so popular here.
Conditions are also worse than on Booking.com, I am not sure if it may different in other countries but commission fees are actually much higher than on Booking.com. Most of the bookings we receive on Expedia are from travel agencies and they way they work is, in my opinion, so much worse than Booking.com. So far, we are happier with Booking than with Expedia. Service is also better on Booking than on Expedia...

7 months ago
7
pibomarco

Once I was suspended few months from BDC due to breaching their contract few times. Fact is that I wasn't able to rebook those available dates just via Expedia or AirBnB. I basicly realised that I need them more then they need me. Majority of potential bookers still uses BDC though, at least in Europe. I think the biggest competition is or will be AirBnB, specialy now because they also aim to hotels, proffesional service, not just home rentals and recently they implemented 2 way integration (API) with chanel managers.. So basicly it became as any other OTA which is great.

P.S. my prices on expedia are higher.
They charged us 20%+ comission, now recently they lowered to 15%. Kind of forcing us to give 10% discount for their "trusted" bookers, Also if I am not mistaking beside the comission, they also charge the guest a service fee. Greedy mofos. Agree with Lu.. don't like their extranet, don't like their support, don't like their channel presentations such as Hotels.co. But still better then nothing. :)

7 months ago
9
M Adamopoulou

Cancellations, cancellations... very difficult to avoid.

I prefer fewer reservations than to have cancellations. Strict cancellation policies are better. You know where you stand all the time. My first unforgettable guest told me once that I am a very strict "business woman" because I have 100% prepayment policy. I didnt understand him then but now I know.....

I have always believed in 'less is more' in everything I do, from work to my personal life.

7 months ago
3
Lu_Madrid

I guess we'll have to be more strict to have a better life then! :)

7 months ago
9
M Adamopoulou

Well said Lu-Madrid.

Cheers!!! life is fun so is hosting!!!

7 months ago
2
Alasma

Non Refundable Bookings;

I don't refund any non-refundable booking unless any valid reason. in this case, I return once the apartment is resold. I deduct 20% to cover card transaction fee and my time.

Refundable Bookings;

Free cancellation for 5 days.

Quite happy with this.

7 months ago
3
Lu_Madrid

Alasma Did you work with a different policy before?

When we first started, we thought it'd be good to set a 24h cancellation policy, but that was too bad for us: too many people cancelling last minute...

Now we have a 3 days cancellation policy and not so many people cancel last minute. When they do, they try to do it at least 1 week in advance.

As for the non-refundable bookings, would people cancel it in advance even when they're non-refundable? Not working with this type of rates at the moment, so I would like to know more about it since you mention that you'd not refund it unless the apartment is rebooked again...

7 months ago
4
k2u

I agree with Lu Madrid regarding Expedia vs. BDC. With Expedia our commission is less. As for BDC, we are much happier with BDC than Expedia as far as bookings and service. BDC is doing very very well for us and yes BDC customer service is much better.

And I also agree with M Adamopoulou, It is so much fun hosting/managing our property.

7 months ago
2
Enquiries

Isn't strange world wide the OTA's have different commissions and payment structures. At this point in time for me in Australia BDC takes 12% & Expedia takes 15% commission from each booking. For direct bookings via your own web site that is controlled by BDC they take 10% commission.

7 months ago
4
k2u

We are not controlled by BDC nor Expedia or any other OTA. We collect at property and I am a preferred partner with BDC so commission is more yes

7 months ago
9
M Adamopoulou

BDC takes 15% from me and for PPP 20% . Commission is to high but BDC is a leader in its field with professional service.

7 months ago
1
Xkeidp

What I would like to know is why such a high proportion of Booking.Com bookings are cancelled (approximately 30%) whereas bookings from the four other holiday apartment rental websites very rarely have cancellations. With Booking.Com I have a strict 60 day cancellation policy so at least there's a chance that a replacement guest will book the apartment. The very high proportion of Booking.Com cancellations is a severe inconvenience and results in a loss of revenue. I would ideally like to extend the 60 day cancellation policy to at least 90 days but Booking.Com don't offer this as an option. The other option is to have a zero tolerance of cancellations policy but that would probably reduce bookings. The other option is to remove my apartment from Booking.com. Situated in central London there will always be plenty of bookings from other sources.

7 months ago
6
michael beeston

Hello Xkeidp...............Understand your frustration with cancellations............we had experienced a similar thing BUT since ( almost 1.5 years) we charged a 30% deposit it changed and we have had 2 cancellations since then and both were an emergency (death in the family) and we booked out the apartment as well. One of the cancellations even said take the 30% deposit for the inconvenience but in the case we said no and I am sure she will return one day.We have a 14 day cancellation policy and because we are on the Gold Coast Queensland, with many guests and tourists it seems to work well for us.hope this is some good info for you and bye the Way.We LOVE London...cheers...Michael.

7 months ago
6
michael beeston

Lu-Madrid....Come to Australia for a fun life haha

7 months ago
6
michael beeston

Hi Lu_Madrid............Our apartment is in a High Rise apartment block in the center of Surfers Paradise Queensland, with the beach on one side and beautiful Nerang River on the other. The apartment is very very luxurious and has a lot of our furniture from all over the World including a Versace Dinner/Coffee set and carpets and Chines furniture well over 100 years old. Have a look at The Pinnacle Apartments Surfers Paradise on booking.com.we have 65 10.s in a row so we are very happy with BDC and the guests are nice people. I guess (and I dont know what you charge) we charge a higher price so get a higher quality of guest (that is not directed at anybody but it seems to be the case in Australia and of course ONLY 2 people ) It is a One bedroom apartment with 2 bathrooms/Spa and a TV media room ( I converted the other bedroom to a TV room) with Tennis Court/Spa/Sauna/BBQ area/Club Room/Gym/Secure underground parking and many other things with the Light tram line on the same road. We charge $250 per day during the high season and $160/180 per day for the slower seasons and have an 90% occupancy rate.............Hope this helps as I do not know of what everybody charges so am a "little" lost there..Michael.

7 months ago
6
michael beeston

The apartment is 94 square metres..does that help ???..with 2 balconies overlooking the River.

7 months ago
2
Enquiries

Sorry if I am digressing from the original cancellation policy question.

I am over the emergency of "death in family" reason to cancel, over the years I recall that 3 guests used this excuse several times over. On fellow proclaimed his fathers'death 3 times ! How awful to use such a tragic occasion as an excuse. We now take the first nights room charge as soon as the booking comes through. Guests are aware of this when booking but still approximately 1 in 15 bookings have a problem with their credit card. Either no funds, invalid card, card cancelled ect.. Then the procedure to tell BDC try to contact the guest and so on. It should not be that hard for us. If BDC took the prepayment (as do Expedia) then they would deal with the credit card failures not us.

7 months ago
6
michael beeston

Hi Enquiries................YES !! I was first very skeptical of these emergencies but in our case we looked into (believe it or not ) Facebook and saw the messages of condolences BUT you are right PEOPLE will do just about anything to get out of paying and if people use "death" as an excuse, that is DISGUSTING !!!, but as I say being in the hospitality business we see many strange things happening, which are sometimes hard to believe.

When we have a declined credit card I send a message through booking.com saying please fix within one day or we shall cancel........most of the time it is good but on several occasions we have cancelled..good bye not worth the hassle and potential problems..as long as we get the 30% deposit everything seems to go very well.

Thanks Enquiries, very interesting subject.

7 months ago
7
pibomarco

"The other option is to have a zero tolerance of cancellations policy but that would probably reduce bookings. The other option is to remove my apartment from Booking.com. Situated in central London there will always be plenty of bookings from other sources."

I don't see logic here. :) If you have plenty other sources, then set your BDC policies strict.

For me works well:

  • The guest will be charged the first night if they cancel after reservation and the total price if they cancel in the 30 days before arrival.

@Enquiries if you activate ONLINE PAYMENTS you won't have these problems.

Booking.com does take prepayments (Payments by BDC or Online payments).

There will always be excuses. I usually accept free cancelation if it is soon enough. On the other hand I offer them if we'll receive meanwhile another booking for those dates we will issue a refund. "Last minute" free cancelations we usually don't accept.

7 months ago
6
michael beeston

Thanks Pipomarco...interesting thoughts and some good ideas.Everybody has to work out what is best for them...and do it.

7 months ago
3
Lu_Madrid

michael beeston, thanks for sharing that information! I have just looked it up online and your apartment looks fantastic!

I am also more eager to set the price higher than usual as to aim for other type of customer. When we first opened, we applied a discount for all new guests as to motivate people to book. Specially since we were just starting.
However, there are confused newbies in the city and they would still expect a 4-5 stars hotel when it is not. Prices are set accordingly to our central location. Since Madrid is a big city, specially people from smaller cities in Spain, they expect it to be something worth that money in smaller cities, making their expectations higher. However, that is something we cannot change.

Enquiries , as pibomarco , I believe there is an option that allows you to avoid all the hassle of pre-authorizing or charging the guests yourself with BDC. The payment is made through them but they will transfer that money to you a month later.
As for the commission, the commission Expedia takes may be much higher than the one taken by BDC, at least in our case (we hired their services at the beginning of this year - 2018 - as a property in Spain). Expedia also forces you to participate in a package deal which applies a discount, but that discount is not born by them but by the property itself, making the commission be up to 28%. 28%!!! Totally unfair and they do not allow you to remove your property from that type of travel packages. It is, basically, mandatory. Completely unfair and unnecessary.
BDC sets a 15% commission for each reservation and we are happy with that. Other OTA's such as Hostelworld and CTrip followed the same percentage and that is fair. If you would like to be one of the advertised properties, % goes up, but you are hiring an extra service, optional too. We haven't joined that program because it is not worth it for us since we would not be able to afford it due to our, already, low revenue.

pibomarco , thank you for your tips too!
I am really reconsidering setting a stricter cancellation policy and/or a deposit for all bookings.

7 months ago
2
Bridgewatermotel

It is always a challenge to determine "truth from fiction". Fortunately we all seem to get a good sense when a true cancellation reason is offered. Unfortunately, the invalid credit card thing is still in full swing, particularly with damage charges. We are a 37 unit motel with a great location so I have bumped up our cancellation policy to reflect the time of year, length of stay, etc. Seems to be working but we still have a fair amount of cancellations particularly if people watch the weather report and determine they don't think they can get their boats out on the lake. Usually we are able to fill most of those rooms with travelers or contractors. I do maintain flexibility, particularly when it comes to repeat guests. For any substantial room blocks, I do charge a non-refundable deposit 2 months before the event to prevent any huge loss of revenue. Last minute or No-Show free cancellations are definitely not an option.

7 months ago
6
michael beeston

Hi Bridgewater...................Funny, I just received a cancellation not ten minutes ago for the 7th January..the reason.." My grandmother is sick I have to look after her"...yes I am sure it is a fairy tale but it falls within my 14 day cancellation policy..lets hope another booking comes in, it is a busy busy time for us so should be OK...what to do ???

7 months ago
6
michael beeston

Hello Lu_Madrid...Thank you and good luck with all the information...............I was in Madrid 2 years ago...fabulous spot.....cheers Michael

7 months ago
2
Bridgewatermotel

We should all get together and publish a book with "Fake Cancellation Policies I Have Heard". Only trouble is that there isn't enough paper to support the text we all would provide. Oh well, part of the venue. Pretty sure I won't be adding a deposit anytime soon except for large blocks of rooms, particularly by a promoter for an event.

7 months ago
9
M Adamopoulou

Cancellations are a hard pain...

Gianbattista Vespucci has advised us that a BDC team has conducted research and added new features on website designed to reduce harmful cancellations – such as checking more credit cards and making it harder for guests make overlapping bookings. They will be sharing more details soon.

So we just have to wait and see these innovations regarding fewer cancellations.

Take care....

7 months ago
6
michael beeston

Bridgewatermotel .I have a 1,000 page BLANK book here does that help !!..hahahaha

7 months ago
1
Louiemacleod

My main problem is "fake reservations"..normally booked at the last minute, these bookings have fake names, fake address, non valid phone number and invalid email address, and obviously no credit card details.. I pass them onto booking.com and to be honest nothing has been done, they say the case has been passed onto the "fraud dept", but I have heard nothing on the outcomes..I have discovered that whoever is responsible is using a "random name generator" the one I found had 50000 names, addresses, emails, postcodes etc..Do guests have to verify their emails before booking?

7 months ago