Reducing cancellation rates in your Hotel this 2020

In the era of Free-Cancellations, securing bookings with Non-Refundable Rates (NRF)  is becoming less and less common. As a result, your revenue team has to do their magic in limiting cancellations and no-show losses. Read on to learn actions you can take to reduce the rate of cancellations further:

Analyze your booking records to identify the causes

• What was your cancellation rate within the same period of last year? 
• Which type of guests cancelled more? Where are they coming from? The lead time?
• Which channels are giving you more cancellations? 

Action points to prevent cancellations

Attract non-domestic bookings. Travellers coming from abroad typically cancel less, spend more on the destination and stay longer. Start by identifying a source market that would be most interesting for you and go for it. Begin with the basics; translate your hotel info and descriptions to the local language and look for distribution channels that could reach them locally.

Send a reminder email. Keep your guests informed by email about their stay in the days leading up to their arrival, including a clear version of your cancellation policy. If they need to cancel they might advise you immediately and you’ll have the chance to resell the room.

Having a robust two-way connection channel manager, your recently released rooms could be quickly re-distributed via your distribution channels. 

Package your offer. Bookings coming from packages have lower cancellation rates as these are packaged together with non-refundable services such as flight tickets and activities. Working with Hotelbeds you will be able to set up package offers with just one-click.

Overbook responsibly. Having an expected number of cancelled reservations some days prior to arrival helps you to consider your options to overbook via Last-Minute bookings. Your overbooking patterns should be closely monitored and ideally updated daily to avoid surprises that could result in an issue that would damage your brand.

Why do OTAs have high-cancellation rates?

Ghost bookings. In order to get a visa to enter a country, travellers may need an in-destination address that’s why some people are making a fake booking that will never be used.

Increased marketing of Free-Cancellation both ways. With the free-cancellation as the main value point, OTA’s creates a feeling of panic in the customer and push him to reserve his room NOW. Alongside this, OTAs offer to the hotel re-selling plans for cancelled bookings rather than helping to reduce cancellations in the first place. 

They attract final guests with zero loyalty. The OTA channel usually attracts price-sensitive customers that make the booking decision based on rates. They are unlikely to repeat their booking with you. 

Working with Hotelbeds you will get access to an extensive network of more than 100,000 unique retail travel agents around the world.

There is no magic formula for reducing cancellations but using a calculated methodology with trial and testing can help. Applying these tips daily you can - hopefully - gradually reduce the energy you waste rushing around at the last minute trying to fill the gaps left by cancelled bookings.

Find out more

To find out more about how different channel distribution strategies can improve your hotel’s performance, check out the Hotelbeds guide to hotel distribution in 2020.