How To Reduce Last-Minute Cancellations For Hotels? Follow These Tips!
Of all the annoying things in the world, last-minute cancellations are at the top of the list, at least for hoteliers. Imagine, you have gained a booking, after 5 - 10 unsuccessful leads and constant calls, chats and clarification. You sit and relax after your hard work gets paid off, until…
You get a call, and you think, “oh nice, a new lead!” However, the person on call says something you never want to hear, “Can I cancel my booking please?”. The same emotion can be felt due to last-minute cancellations on OTAs and hotel website bookings. Your day gets ruined and you feel burnt out.
Every hotelier wants to reduce last-minute cancellations for their hotels. However, it is easier said than done. Hotels need to follow certain strategies to avoid this mess - losing money, losing customers, and most importantly, losing time and losing other potential customers as well.
So to help you all, we have devised the best strategies to avoid last-minute cancellations for hotels. With these strategies, you will be able to save revenue and also prevent losses.
Table Of Content
1. Have A Clear Hotel Cancellation Policy In Place
This is the first step. The Hotel-Guest relationship is a two-way street. Hotels should provide good service to their guests, who in turn should follow the rules and policies of hotels. The only way they will follow your rules, terms and conditions, is to have one in the first place. That’s why hotels need to have a solid cancellation policy in the first place.
Your hotel cancellation policy should keep hotel revenue in mind, which depends on demand and seasonality. Make sure your policies are clear to the customers. This way, you will be able to avoid last-minute cancellations for your hotel. It should be the same across the channel.
2. Ask For Advance Payments
Asking for advanced payments is considered to be one of the best strategies to reduce and handle last-minute cancellations for hotels. This helps in two ways:
You get some revenue, even if the guest cancels.
This discourages the guest to cancel the booking since they have already paid an advance.
You can also incentivize advance payments by offering a discount or a combo offer, such as CP, AP, or MAP plans. In fact, a non-refundable stay isn’t unreasonable if you are providing the room at a discounted rate.
3. Require Credit Card Or Debit Card Deposits
Mandating credit card or debit card deposits at the time of booking reduces the chance of last-minute cancellations to a great degree. Depending on the policy, you can also demand pre-authorization at the time of booking.
Many guests give invalid details to go ahead with the booking. And the hotels are completely dependent on them coming to your hotel. This leads to a loss in hotel revenue. To combat this, verify their credit card or debit card details before they made their booking.
4. Offer Discounts To Guests
This strategy can be effectively used on your hotel website. With discounts, you will be able to encourage the best to book your room. After all, who doesn’t love a great deal or a discount? When you offer great discounts, you need to adjust your cancellation policies accordingly. You can provide a non-refundable booking on the discounted rates, or
Your hotel website should provide a seamless experience to its guests, and help them navigate to the discount section. This way, you will be able to avoid last-minute cancellations for your hotel.
5. Length Of Stay Strategies
Length of stay restrictions can be considered to be one of the strategies to reduce last-minute cancellations for hotels. Guests who book for longer stays generally have fewer chances of cancelling compared to those who have booked for a much shorter duration.
This strategy is best, especially during peak season when you have a higher negotiating power compared to during the off-season. Speaking of which…
6. Change Strategies Based on Seasonality
Hotels need to understand the concept of leverage, which is based on demand and supply. Higher the demand, the higher the leverage. Cancellation policies of the hotels need to be adjusted based on seasonality. Seasonality refers to the demand and supply for businesses during fixed periods.
Seasonality can be off-season or peak season. Off-Season means the business condition in which the demand is generally low. Peak-Season, on the other hand, means the state of high demand throughout the time period.
To avoid last-minute cancellations, you can have a strict cancellation policy during the peak season. The demand is high, and every booking cancelled is a booking that you would have alternatively taken. During the off-season, on the other hand, the demand is less. Having a comparatively relaxed cancellation policy may help, since now the customers are in a better position to negotiate.
7. Send Reminders
More often than not, the guest can forget about the hotel cancellation policies and the terms and conditions. This can be mitigated by sending the guest timely reminders about their upcoming stay. These timely reminders can be various notifications about things to explore near the hotel, or promoting new offers and deals to the customers.
This can be done with the help of a Property Management System, also known as PMS. This will reduce last-minute cancellations for hotels.
8. Use Guest Data
One of the best strategies to use to avoid last-minute cancellations is to utilize hotel guest data. With the help of demand data, you can determine the reasons for cancellations, and how you can reduce them. If the guest has not given complete information, you can reach out to them and understand from their point of view.
9. Be Responsive
One of the best ways to avoid last-minute cancellations is to be responsive to the guests. Confirm with the customer, and send them an email a day before they visit. Also, keep a track of all the cancellations that have happened. Also if there is a no-show, the hotel should contact the guest immediately and ask for a reason. Also, keep track of whether or not the advanced payments had been connected.
With these strategies, you will be able to avoid last-minute cancellations and save on hard-earned hotel revenue. To make the most of it, our dedicated team of revenue managers will take over the job, as well as deliver consistently.
Read our blogs to know more about the various concepts, trends and challenges of the hospitality industry.