What should you do when a guest cancels? While it’s important to capture guest demand by offering free cancellation options, it’s also important to minimize harmful cancellations.
Two resources on the Extranet that can help you minimize cancellations are the Opportunity Center, which suggests actions to take to minimize cancellations, and your cancellation characteristics report, which provides in-depth insights about your property’s cancellation rates.
Explore these resources on your own or jump into the two scenarios below, one for tackling last-minute cancellations and another that focuses on reducing your cancellation rate over time.
Scenario 1: You have too many last-minute cancellations/no-shows
Quick steps for tackling harmful cancellations
Last-minute cancellations and no-shows can leave you with no time to recover lost income, but there are steps you can take to prevent them, plus ways to resell a room at the last minute:
- Review policies/rates: Examine the time between when a guest books and checks in. You might want to tighten up your cancellation policies during time periods where the most cancellations occur. Or consider offering an attractive rate to resell rooms at the last minute.
- Resell your room: The earlier a canceled room is made available again, the more likely it will sell. Consider offering a mobile-rate discount to capture the 50% of travelers who book on their phones. You can also take advantage of sales campaigns or create your own custom promotion.
- Let us refill your room: If you’re enrolled in Payments by Booking.com, let us do the work for you with Risk-Free Reservations. We make your rooms more attractive by offering guests additional free cancellation options. If they cancel, we’ll find a replacement guest for you or else take over the payment obligation for the cancellation cost.
- Implement prepayment/deposit policies: You can fine-tune your prepayment and deposit policies on the Extranet to help secure revenue up front. For example, you could pre-authorize the cost of the first night to reduce no-shows. Pre-authorizations expire over time, depending on the policy of each credit card company, making the moment a booking becomes non-refundable a good time to pre-authorize.
- Ask for a replacement guest: If you prefer to offer free cancellation policies, ask for a replacement guest and we'll give your canceled room a marketing push.
Scenario 2: You have more cancellations than similar properties
Understanding the key factors behind cancellations
Examine your property’s cancellation characteristics report and compare your property’s performance against the competition in your market. If you’re unsatisfied with the cancellation rate, consider making some targeted changes:
- Diversify rate plans: If you only offer non-refundable rates, you might end up with fewer total bookings. Set up diverse Rate Plans on the Extranet with a mix of early-booker, non-refundable, and flexible options. By offering more choices to potential guests, you can get more bookings and reduce cancellations while still securing revenue from non-refundable rates.
- Experiment with pricing: Guests perform a cost-benefit analysis when booking, and there are different ways to persuade them that go beyond offering steep discounts. For example, consider offering a substantial price difference between non-refundable and flexible rates, so your guests can decide whether to pay for the option of a free cancellation.
- Offer more ways to pay: Guests who pay online are four times less likely to cancel or no-show. Set up Online Payments on the Extranet, and you can also offer alternative payment methods for the growing number of people who prefer services like PayPal, WeChat Pay, or Alipay (among many others).
- Be responsive: Guests who have questions after booking but don’t receive a timely response may cancel and book somewhere else. Two ways to combat this are to install the Pulse app for on-the-go messaging and set up messaging tools to address commonly asked questions.