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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!
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.
It might be interesting to know the type or accommodation people are selling here as we have a few properties ranging from Homestay for 1 - 2 guests up to 3 bedroom apartments sleeping 8. We have moved to 30% deposit upon booking with 24 hour grace period of free cancellation and no refund within 1 month for all properties. We're in Queenstown so there are a lot of hotels and 100's of Airbnbs. Cancellations for 1-2 guests aren't generally a problem BUT groups of 8 don't generally book last minute so if we were lenient and let gets cancel we don't resell. This is particularly annoying when Black Friday sales are on (both Booking.com and Expedia Group do them), even if you don't offer a sale on Black Friday each year we still get a whole bunch of cancellations as other hotels are stupid enough to offer 40% discounts in high season?!? $30,000 of cancellations on Black Friday is what has finally pushed us to 30% non-refundable deposit - we missed it this year but next year it will be enforced fully.
Pretty sure option 2 exists.... I get virtual cards from Booking.com and Expedia?! But not very often from Booking.com - could be one of the channels they post your hotel to such as Ctrip or Agoda? We've shifted this morning to 30% deposit to check the card works and the balance 10 days before the stay.
Another annoyance is the messages you send out to Booking.com guests - I reckon 20% actually read them - very annoying when we don't have a front desk. Guests constantly calling wanting to check in and haven't read the full checkin details mailed to them 7 days before, haven't read address details in the booking confirmation... total lunatics :-)
Our 50% cancellation rates for November have just pushed us to change our cancellation policy to 30% deposit, and the balance charged 10 days before (you can't set that is Booking.com) so on B.com it will show as 30% deposit and the balance charged 30 days out. I agree with Mac, I tend to say to guests that if they cancel and I resell the room I will refund so if they cancel 28 days out there is a good chance, if they do it 4 days out then it is unlikely. Have to be hot on fake credit cards as well and I'm confident charging the deposit at booking is a better way of checking the card is valid and actually has funds behind it.
Booking.com is partly to blame for high cancellation rates as they advertise "most rooms offer free cancellation" - that is a stupid policy as the guest holds your accommodation for a couple of months and then cancels so you lost the chance to sell it to someone that genuinely wants to stay. I turned down a booking yesterday over Dec 30th because we are full only to have another guest this morning cancel a 4 day stay and request free cancellation (we are set Strict 30 day no refund) as silly season means I will sell Christmas and New Year 6 times each per room and 5 will cancel. Each time leaves me annoyed and less motivated to run guest accommodation. The cancellation rate for November just ran 50% on Booking.com which is ridiculous. I'm thinking I might charge a percentage (maybe 10%) outside of strict cancellation window to cover the time and effort to handle the paperwork and calendar checking that is required after cancellations to ensure we don't get overbooked by accident.
We're also seeing that accommodation for larger groups (say a 3 bed apartment for 6pax) is less likely to sell last minute so when a guest holds it for 2 months and then wants to cancel 2 weeks out it is unlikely to sell - so how can I be flexible and let these people cancel and destroy my revenue?!