Changes to promoting ‘Free cancellation’ on Booking.com

Note: These changes are applicable to properties in Colombia, Taiwan and the Philippines only. Any references to ‘pre-authorisation’ are applicable to properties in Taiwan and the Philippines only.

 

What is the current situation?

Currently, all reservations that can be cancelled free of charge by guests are promoted as ‘free cancellation’ during the free cancellation window on Booking.com. This happens regardless of when the property charges a prepayment or pre-authorises guests’ credit cards. 

When guests see ‘free cancellation’, they don’t expect their card to be charged or pre-authorised. As such, unexpected charges such as prepayments or pre-authorisations during the free cancellation window can cause unnecessary friction between guests and the property.  

What is changing?

From 15 July 2019, guests will see either 'free cancellation' or 'fully refundable' during the free cancellation window. The one they see depends on if and when properties pre-authorise and charge prepayments.  

What will guests see?

If a property pre-authorises or charges a prepayment:

  • before free cancellation ends, guests will see ‘fully refundable’ during the free cancellation window.

  • after free cancellation ends, guests will see ‘free cancellation’ during the free cancellation window.

Why is this changing?

When a guest makes a reservation with the option to cancel for free any time, or until a certain number of days before arrival, they don’t expect their card to be charged during this time. However, this is often the case. 

You might charge prepayments and/or pre-authorise cards before the free cancellation ends as a way of securing revenue (making sure the guest’s card is valid or has sufficient funds). This can come as an unexpected charge for the guest, and reduces the available balance on their card. This can lead to higher cancellations and an increase in operational costs for you when it comes to handling questions, cancellations and refunds.  

These changes will make things clearer for guests, so that they know what to expect after they make a reservation. That should mean fewer cancellations due to unexpected charges, lower operational costs and happier guests. 

What is changing in the extranet?

  • On the policy page in the extranet, we’re introducing a new section called ‘pre-authorisation preferences’. Here properties can provide details about how they pre-authorise guests’ cards.   

Note: In some countries, such as Colombia, pre-authorisations do not exist. If you are located in Colombia, you won’t see these pre-authorisation settings in the extranet.

  • We’re also making the prepayment timing options clearer. If you open any cancellation policy with ‘flexible’ in the name, you will see the improved timing options.

  • We will share your prepayment and pre-authorisation preferences with guests when they’re making a reservation, to provide more clarity and better manage their expectations.

  • Remember, this change only affects what guests see when they book. The overall booking conditions won’t change.

What do I need to do?

If you have a preference for your guests seeing either ‘free cancellation’ or ‘fully refundable’, we recommend taking the following steps:

  1. Log in to the extranet.

  2. Go to ‘Property’, and click on ‘Policies’.

  3. Review your prepayment and pre-authorisation settings and click on ‘Save’.

What is not changing?

  • The process of payments and refunds between properties and guests. 

  • Your chosen free-cancellation period, cancellation costs or no-show fees. 

  • When you want to charge guests.  


FAQs

How do I make sure my guests continue to see ‘Free cancellation’?

What guests see depends on whether you pre-authorise cards and take prepayments, and when.

For example, let’s imagine you have a flexible two-day cancellation policy where guests can cancel free of charge until two days before arrival. In this policy, if they cancel within two days of arrival, they’ll be charged the total price. And they’ll also be charged the total price if they don’t show up at all.

So if you have that policy configured, but you also pre-authorise or charge a prepayment any time from the moment you receive the reservation until two days before the guest’s arrival, guests will see ‘fully refundable’ until two days before their arrival.

If you pre-authorise or charge a prepayment within two days of the guest’s arrival (or if you don’t pre-authorise or charge a prepayment at all), guests will see ‘free cancellation’.


 

What happens if I don’t add my pre-authorisation preferences?

If you don’t set up any pre-authorisation preferences, we’ll assume you do pre-authorisations during the free cancellation window. This means that guests will see ‘fully refundable’ instead of ‘free cancellation’ while free cancellation is still available. However, you can change your preferences in the extranet whenever you like.


 

Which one should I choose?

There is no right or wrong setting, and it’s up to you to decide what works best for your property. These changes are about providing clarity to the guests, which should also help you.

Here’s an overview of all possible options and how will they affect what guests see on Booking.com:

 

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table_transactional_clarity

 

What is pre-authorisation?

Pre-authorisation (also known as authorisation or pre-auth) is a process where you hold a certain amount of money on the guest’s card in order to confirm the card is valid and/or has sufficient funds. Pre-authorisation is a hold (not an actual charge) and the amount gets released after a period of time.  

However, the amount on the guest’s card becomes blocked and is unavailable to use until the held amount is released. Because of this block on available funds, some guests might see the funds as unavailable, and think that they’ve been charged. That’s why unexpected pre-authorisations during the free cancellation window can lead to cancellations, as well as extra questions from your guests about refunds.


 

What is the difference between pre-authorisation and prepayment?

A pre-authorisation is a hold (not an actual charge) of a certain amount of funds on the guest’s credit card. This amount will be released, but until that happens, the amount on the guest’s card is unavailable and your guests might think they’ve been charged.

Prepayment is an actual charge on guest’s credit card. Prepayments are always based on a particular cancellation policy.  


 

Why can’t I see ‘pre-authorisation preferences’ in the extranet?

Your property is probably located in a country that doesn’t allow pre-authorisations. If you’re located in Colombia, for example, you can’t run pre-authorisations by law, so you won’t see this option in the extranet.


 

How do I know which policies will be affected by the change?

All policies and preferences that are affected by the change will be mentioned in the yellow banner on top of the policies page in your extranet. 


 

How do these changes benefit me and my guests?

These changes should give more clarity to your guests, so that they understand what to expect after they make a reservation and they aren’t surprised by unexpected charges and holds.

This should result in fewer cancellations, meaning you should spend less time on handling complaints, cancellations and refunds.


 

Where can I find more information?

For more information, feel free to get in touch with your regular Booking.com contact. 

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