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It's a tricky situation but our policy is plain and simple.
We charge the guest's credit card in full 30 days out from arrival. If they don't show up (although it's never happened to us) we would mark it as a no-show and keep the payment. If the payment doesn't go through at the time of charging it against the guest's credit card we will notify Booking.com and cancel the reservation if the guests doesn't update the card.
To put it simply:
In this business you get one bite of the cherry! If the guests expects us to guarantee a room for them they have to guarantee payment and that they will turn up. Unsold inventory costs money and if you're holding a room for someone who may not show up it's better to ditch them in the hope that a more serious customer will show.
Wow ... I've been amazed at the comments following on from my initial post 2 months ago. And so many valid and worthwhile points have been made.
I should explain a little more about us.
We own and operate our accommodation business in southern Tasmania, the island state of Australia. We operate at two separate locations ... our mainland site has a 2 bedroom apartment and a one bed studio cottage. Our other site ( a self contained cottage) is on an island called Bruny Island off the coast near Hobart, the capital city of Tasmania. I manage, clean and maintain both sites. The Bruny Island cottage is basically a 5 hour round trip. I do this full time for a living and have no staff. My partner, Sue, works in her own career full time and assists when she can.
We've been doing this for 8 years! 14 hour days are common and during the peak season (which is getting longer each year) I work non-stop ... and I'm 62 years old.
We have a really broad range of guests, with travelers from the UK, Europe, USA, South America, India, China, Singapore and mainland Australia as well as a strong local market.
99% of our guests are amazing and the other 1% aren't really a problem ... they just have their own peculiar issues.
Our investment in our business is huge and our return is average, despite really healthy occupancy rates.
There has been a huge upsurge of competition in the short term rental market in our region especially with platforms such as AirBnB and HomeAway.
We use a channel manager/reservation system and Booking.com has been an outstanding channel for us. Our own web site is also proving to be a solid performer and we spend a lot of time working on our social media presence as well as our Google presence. We can't stress strongly enough how important social media/blogging and small Adwords campaigns are. These contribute to market presence and brand awareness.
Even if you don't have the interest to spend money on Adwords at least think about blogging. It works well for us not only in bookings but also in our visibility.
I wish Booking.com would permit video to be added to our pages ... maybe one day!
As far as treating our guests patiently goes we still believe strongly in this. We will always treat our guests the way we want to be treated.
In short the hospitality industry is hard work but the rewards are massive. We love the industry and we love being able to share our part of the world. But please don't feel we let ourselves be treated as door mats. We will stand up to those extremely rare guests who are just plain difficult ... with a smile of course!
Unfortunately the world is a complicated place.
Although we haven't experienced anything like the nightmare you have described there are some reasonable steps to take to ensure your reputation remains intact.
Firstly, do not rely on one channel to distribute your product.
Develop your own web site, Google page, Facebook page and YouTube channel. Become a social media expert and if you don't feel you can do that find someone who can to help you.
Create social media and web site content every week if not every day and promote, promote, promote!
Your reputation is based on everything you do not just the rooms your rent out.
Customer service, local knowledge, professionalism and even tourism accreditation all contribute to the way you and your business are perceived by your guests and your suppliers. And don't forget to "dress for success!"
If you win a Booking.com award or any other award make sure it is prominently displayed in your office or reception area.
The surprising truth is that if your business is perceived by some guests to be of less value than they were promised they will treat you and your place that way.
Consider charging a security deposit (or property bond) ... can be a hassle as you have to do the refunds.
If the damage appears to be malicious and extensive you must consider involving the police as criminal charges can be laid (depending where you are).
By the way ... credit card companies have very strict rules on how charges can be made against the guest's credit card. Most operators aren't aware of this. If you try to charge the card the guest can challenge the charge and get it reversed. If they haven't signed anything with you on arrival how will you prove they even stayed?
Do these things at check-in: Obtain a physical impression of the guest's credit card (scan or photo of both sides if you don't have a card machine) along with photo ID of the guest!!! The ID must be a passport or current drivers licence. Scan or photograph the ID as well. Then get the guest to sign a form that you create ... make sure it has all the details of up-front charges for the stay as well as a section for ALL the credit card details. By signing the form the guest is accepting the total charge for the stay along with approval for any extra expenses including damages during their stay. Then process the payment for the stay ... you have the ID, card details as well as guest authorisation for any extra charges incurred. Also consider taking a photo of the guest's car parked in the property's car park to prove they actually arrived.
The guest will be on their best behaviour!!!