How to better understand, prevent, and reduce cancellations

Help Guide 

Tackling cancellations together

With all the demands of running a busy property, we know cancellations can be a headache. Lots of cancellations are genuinely unavoidable, because sometimes guests’ plans change. However, there are steps you can take to reduce cancellations and prevent “harmful” cancellations – those last-minute cancellations and no-shows that leave you with no time to recover the lost business. This guide outlines the tools we provide to help you proactively avoid these situations and secure revenue.

Understanding your property’s cancellations

Get valuable insights from your “Cancellation characteristics” report

If you want to improve your property’s cancellation performance, we recommend taking a closer look at your property’s specific cancellation patterns first. If you’re not sure whether it’s early-booker or last-minute cancellations that are hurting your business, we’ve got a tool for identifying your specific challenges.

Under the Extranet’s “Analytics” tab, the “Cancellation characteristics” report analyzes your bookings and provides an overview of:

  • Your overall cancellation and no-show rates

  • When your cancellations occur

  • How you compare to similar properties in your area

Interpreting your “Cancellation characteristics” report

To figure out how you can improve, first compare your “Overall reservations” to your competitive set and market, noting their cancellation and no-show rates. This will give you a better idea of cancellation behavior in your region. Then check your:

  • Reservation status: Are there certain booking windows with more cancellations than stayed reservations?

  • Cancellations before check-in: Are there specific periods before check-in when most cancellations occur?

Use this data to address your specific cancellation patterns and take actions to improve your property’s overall performance.

Pro tip: Check your “Cancellation characteristics” report regularly to stay in control all year. Focus on the areas where your performance differs from your market, and determine what level of last-minute cancellations and no-shows you’re comfortable with.

Example: In this case, the partner used the report’s compare function to assess their property’s performance against their competitive set.

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cancellations report - reservations

The property’s cancellation rate is 35.4% (i.e. just over 35 of every 100 bookings are canceled) while the average cancellation rate for the property’s competitive set is 25.3%. The fact that the property has a higher cancellation rate than others indicates that there’s room for improvement. The property could improve their performance by reducing the no-show rate of 2.5% to as close to 0% as possible.

Proactively preventing cancellations

Your “Cancellation characteristics” report helps you understand:

  • Your overall cancellation and no-show rates

  • When your cancellations occur

  • How you compare to similar properties in your area

Once you understand your property’s cancellation patterns, you can take steps to prevent cancellations, reduce their impact, and secure revenue. You’re always in control of selecting the rates, prices, policies, and other preventative features that best suit your business. That way, you can manage cancellations without being too restrictive and losing bookings.

Top tips for preventing cancellations

Manage your cancellation policies

We let you specify whether you offer free cancellation and in what timeframe, as well as what charges apply if a guest no-shows.

Pro tip: When revising your cancellation policies target specific booking windows or time periods that have high cancellation rates. You’ll find this info in your “Cancellation characteristics” report.

 


Consider offering non-refundable rates

To appeal to even more guests, you could offer both non-refundable and flexible rates. Generally, guests who make non-refundable reservations are more committed to their stays because they'll have to pay if they cancel, make changes, or no-show.

Non-refundable rates are very attractive to bookers and can increase your visibility on search engines. On average, we’ve seen that adding a non-refundable rate plan can help reduce cancellations by at least 9% and increase bookings by at least 5%.

Non-refundable rates are usually cheaper than those allowing free cancellation, but you’re likely to make up the small price difference by getting more guaranteed bookings and higher revenue overall.

Pro tip: if reservations booked far ahead are getting canceled most, try displaying discounted non-refundable rates for these specific booking windows to secure early-bird bookings.

To protect yourself from guests who make non-refundable reservations with invalid credit cards, combine your non-refundable rates with prepayment or pre-authorization policies. Also consider offering guests the option to pay online when booking.

Note: Only offering non-refundable rates can result in fewer overall bookings.

 


Accept multiple payment methods

If it’s available in your extranet, you can sign up for Online Payments and let guests use alternative payment methods like PayPal. This will help you reach more bookers, reduce cancellations and save time on admin tasks.

Pro tip: When guests pay for their reservations using alternative payment methods, they’re 4 times less likely to cancel or not show up.

Alternative payment methods are also useful if a guest’s credit card turn out to be invalid. Offering them another payment option gives you a chance to guarantee their booking and secure revenue.

 


Verify guest payment in advance

Between the time of booking and arrival, you can pre-authorize guests’ credit cards (i.e. hold a small amount on their cards). This lets you confirm the details are correct and the card isn’t lost or stolen, which helps prevent nonchargeable cancellations.

Another way to reduce the risk of no-shows is to set up a prepayment requirement and charge guests in advance, whether in full or partially. However, only allowing prepayment can result in fewer overall bookings, as some guests want more flexibility with payments (e.g. paying in cash on arrival).

Pro tip: Partners who pre-authorize cards typically hold an amount between 0.01% of the total and the cost of the first night. If the bank reports the card as invalid, follow the invalid credit card process to request new details from the guest.

 


Verify guest payment: mark invalid credit cards

To save you time, we’ve started checking a certain percentage of bookings and marking invalid credit cards on your behalf. These will be tagged “Reported by Booking.com” on the Extranet. 

For all other bookings, you can verify cards by pre-authorizing a small amount or charging prepayment. If reported, mark the credit card as invalid on the Extranet. Then we’ll let the guest know their card was declined and ask them to provide a new one within 24 hours.

Pro tip: Don’t assume the worst if a card is declined. There could be a logical or innocent explanation like an international transaction restriction. Reach out to guests to find a solution.

 


Manage your restrictions

Depending on your property’s cancellation patterns, you may want to use restrictions to prevent certain types of bookings and lost revenue.

For example, you might want to avoid getting bookings too far in advance, since those guests’ plans are more likely to change and result in cancellations. Setting a “maximum advance reservation” restriction to prevent this.

Or you might want to limit how much availability a single reservation can take up. Setting a “maximum length of stay” restriction will prevent guests from booking more days than you want.

In general, we recommend offering as much availability as possible, because setting restrictions may affect your visibility in potential guests’ search results.

Pro tip: Restrictions can work well in combination. For example, to avoid longer stays booked far in advance, set both a “maximum length of stay” and a “maximum advance reservation” restriction. Or consider taking partial payments or setting less flexible cancellation policies (non-refundable) for these bookings.

Note: We don’t recommend these restrictions for seasonal properties.

 


Offer compelling prices

Guests might cancel if they find a comparable room for a better price elsewhere, or the same room for a cheaper price listed on a different website.

In fact, uncompelling prices can increase your cancellations by up to 30% and potentially lead to decreased visibility on our website.

The Extranet’s Price Quality Score helps you keep track of how your prices are displayed across other online channels and how compelling they are.

Pro tip: A structured rate plan can help fill rooms last-minute and earn optimal revenue. Review your rate plans and learn more about making rate types work for you.

 


Reply quickly to guests

Research shows that guests are less likely to cancel if they get quick replies to their questions. You can both reassure guests and reduce your admin time by using our smart messaging tools, including customized templates, scheduled messages, and automatic replies.

Pro tip:When guests contact you, it’s generally with good intentions. You can set up messaging preferences so that you give them the information they need without increasing your own workload. You can also communicate with guests while you’re on the go by downloading Pulse, our property management app.

Tools for reducing the impact of cancellations
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Cancellations

Discover additional solutions that can help your business

Once you’ve identified your property’s cancellation patterns and taken proactive measures, you’ll be right on track to improving your performance. 

If you want to further minimize the impact of cancellations on your business, we also offer a variety of optional features that could benefit your property.

Check the Extranet to see which of these solutions are available to you:

Reduce manual tasks around cancellations

Did you know that one-fourth of all cancellations occur within 24 hours of booking? By setting a grace period and waiving cancellation fees for guests who cancel 1, 4, or 24 hours after booking, you can reduce no-shows by 20%.

This will significantly reduce the manual work involved in managing cancellations and re-selling rooms, helping secure revenue as quickly as possible.

 


Prevent bookings from guests likely to cancel

To avoid bookings from guests with existing reservations for the same check-in/out dates at other properties, you can display less flexible cancellation policies to these guests (excluding groups).

Pro tip: This feature works best when you offer a non-refundable rate.

Note: This option can reduce overall bookings, which can impact smaller properties in particular.

 

 


Ask for a replacement guest

When a guest cancels, save time on re-selling the room by letting us find a replacement guest for you. 

We’ll hold on to the canceled room/unit for up to 24 hours and market it to guests searching for the same and/or overlapping date(s). 

Check the Extranet’s Opportunity Center to see if your property is eligible.


Take the cancellation risk out of certain reservations

To help you offer more flexible rates without the added risk of losing revenue, we’ve developed the Risk-Free Reservations program.

The program lets you upgrade semi-flexible or non-refundable policies to fully flexible ones. This way you’ll appeal to more potential guests and get more bookings.

If you get a cancellation on the upgraded policy, we’ll try to resell the room/unit. If we can't find a new guest, we’ll pay you the full amount you’d set for the original room night(s). 

Either way, you’re guaranteed a payout without doing any extra work.

 


Tools for attracting new guests after last-minute cancellations

If you’re getting last-minute cancellations, don’t panic. There are always other guests looking to book closer to arrival. By optimizing your pricing, availability, visibility, and conversion, you can gradually boost last-minute bookings over time.

Here are the tools and products you can use to attract last-minute bookers:

Appeal to last-minute mobile bookers

A majority of bookings on our platform are made on mobile devices. You can stand out more to mobile bookers with a special mobile-rate discount which can increase bookings from mobile devices by up to 26%.

You can also make the booking process quicker if you let last-minute mobile bookers  book without a credit card or omit address details.

Pro tip: Consider offering a mobile-rate discount of at least 10%.

Note: Removing address requirements will apply to all bookings, and removing credit card requirements may increase no-shows.

 


Make sure you’re visible in search

To improve your visibility in last-minute bookers’ search results, make sure your “minimum length of stay” restrictions aren’t too strict. You can apply restrictions to individual rooms, dates and rate plans.

Pro-tip: Combine restrictions with rates and policies to manage risk and boost your appeal to last-minute bookers.

 


Welcome Genius guests

Increase last-minute conversion by signing up for our Genius program. On average, Genius properties get 18% more bookings, 17% more revenue, and fewer cancellations.

If eligible, your property will rank higher in search results and attract high-value Genius guests who book more often and spend more per night. 

 


No credit card for local bookers

If allowing all guests to skip address or credit card details seems like a big step, you could start small and only  apply this policy to domestic bookers.

You can actually increase stayed bookings by up to 5% by making it quick and easy for local guests to book while they’re logged-in to their Booking.com accounts.

To avoid misuse, this option doesn’t appear to local guests if they have upcoming reservations with Booking.com for the same check-in/out date(s).


Create a deal or promotion

If you offer discounted rates and secret deals, you’ll get more visibility in Booking.com search results, appeal to guests booking closer to arrival, and fill empty rooms faster

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Cancelamentos
3 common cancellation scenarios and how to handle them

 

Scenario 1: A guest no-shows and you can’t charge for the booking

Suggestions:

  • Verify guests’ credit card details as soon as you receive bookings, and consider pre-authorizing a small amount or requesting prepayment. 

  • Review your booking window for these cancellations. If a lot of these bookings are made far in advance, consider offering early bookers a non-refundable rate to increase occupancy and secure revenue.

  • If your property is eligible, sign up for Risk-Free Reservations. That way you can offer more flexible rates and guarantee revenue – even if guests cancel.

 

Scenario 2: You get a last-minute cancellation

Suggestions: 

  • If there’s time, adjust your availability and try to resell the room/unit.

  • If your property is eligible, sign up for Risk-Free Reservations. That way you can offer more flexible rates and guarantee revenue – even if guests cancel.

  • Review your restrictions—and relax them, if necessary—to make sure you’re visible to as many potential guests as possible.

  • Make it easier for last-minute mobile bookers to book with you. 

 

Scenario 3: You have a higher cancellation rate than similar properties in your area

 Suggestions:

  • Try offering a mix of rates and policies that appeal to all types of guests, from non-refundable rates for early bookers, to flexible cancellation for those who book during medium to long booking windows.

  • Make sure your availability, rates, and restrictions are maximizing your visibility to guests for all booking windows, long and short.

  • Offer guests multiple payment options to increase your chances of getting their bookings and securing revenue.

  • Verify guests’ credit card details as soon as you receive bookings, and consider pre-authorizing a small amount or requesting prepayment. 

  • Check your “Cancellation characteristics” report regularly to track the impact of specific actions you’ve taken to reduce cancellations.

Disclaimer: The material included in this guide is for general information purposes and not intended to represent commercial advice. It doesn't take your specific needs, objectives, or situation into consideration. Not all products/solutions are available or applicable to all partners and markets.