Cancellations and their impact on my business.
I would like ask how cancellations affect my bookings, except the obvious that some won't come to our appartments.
I'm asking because I presume that a property that has many cancellations is probably treated differently by the booking search algorithm and such.
What happened at out property is that we now have 31 bookings (in the past and reservations) and 13 cancellations (more than 1 quarter if you just look at those two numbers).
So we could say we have 13/(31+13) = 29.5% cancellation rate which seems awful.
Looking at the cancellations more closely:
1 cancellation was to just change to a different apartment in our property. (Not really a cancellation at all)
2 cancellations were made by the same customer for the same apartment and the same date and they didn't come back (1 cancellation really)
2 cancellations of the same customer for 2 apartments on different dates (don't know what to think about this one)
3 cancellations were made by the same customer trying to figure out how to add their children. In the end they figured it out and they are coming to our apartment in the summer (not really any cancellation at all).
So here we have 8 cancellations that when you look closely are really just 2 or 3. That is 5 or 6 cancellations less which brings our cancellations from 13 to 8 or 7.
So now we have one of the two: 8/(31+8) = 20.5% or 7/(31+7) = 18.4% cancellation.
So the conclusion would be that we have a ballpark 30% cancellation rate but in reality just 20% cancellation rate - this in my opinion is too much to be ignored because most of it are just customers going forward and backward on what and how to do things.
This is the reason why I'm asking how the cancellations are affecting our business or rather our reputation on booking.com.
Thank you.
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Ok. I sent the question via message, but it seems strange that you would classify my question as an "action request". I would think that people would generally be interested in this topic as I am merely asking for an explanation on how something on Booking.com works..
Thank you for your help.
Hi Vlatka Švast,
Great question! There are definitely a range of factors that can affect a property's ranking on the platform and cancellations are one of them. Properties with higher cancellations will mean they have lower conversion rates and generally our system will rank properties that convert well higher.
Good to see that you have broken down your cancellations but our platform does not have the functionality to be so detailed here hence why we would use the overall number in our calculations.
If you are noticing most of your cancellations are from guests changing their dates or apartment type being booked, ensuring you are responding to guest messages quickly whilst they are deciding can help you then to simply modify their existing booking rather than cancelling. You could also look at having a separate non-refundable rate to further help reduce cancellations.
Kind regards,
Shirley E.