Things come up. Circumstances change. Plans get disrupted. But is that the only reason why your guests might not show up at the last moment?
More often than not, the problem lies on your side of the fence. A messed up cancellation policy, radio silence post booking,
or even a better deal somewhere else often lead to unexpected cancellations and no-shows.
Did you know that almost
20% of hotels
rooms booked online are cancelled before the guest arrives?
That’s 1 of every 5 bookings you get! It not only directly impacts the revenue, but also leads to poor marketing, since OTAs keep track of cancellations drawn by a hotel.
But before we move on to the rescue plan, here’s why cancellations are worth talking about.
Why do Cancellations Matter?
Here’s some Business 101 for you - Saving money is earning money.
Now here’s some Business-in-a-modern-competitive-world 101 - Not earning money is losing money.
Somebody had plans to travel, looked up your website, booked a room and later cancelled or didn’t show up.
There’s good reason to believe that the person is still travelling. Just not staying in that room you lovingly prepared.
Cancellations matter for several reasons, some of which are listed below:
Lower Occupancy Leads to Lower Revenue
Any room that’s vacant in a hotel is probably a loss-making entity for the day.
You don’t need advanced math skills to understand the relation between last minute cancellations or no-shows and revenue.
Even when you’re able to sell the room again, it would probably be at a lower rate.
Drop in Rankings on OTAs
Just like Google’s search results, OTA listings work best for properties listed on the first page.
Although OTAs promote initiatives like ‘free cancellations’, they can significantly impact your rankings, and in turn, the overall sales and revenue.
Stress and Extra Work
If a ‘done deal’ isn’t done in time, you need to start from scratch again. Last minute cancellations and no-shows lead to extra work, more so, under stress and pressure.
Understanding Where Cancellations are Coming From
Use insights from guest data to understand key parameters that affect conversion. Analytics can let you know the exact reasons for cancellation.
Types of rooms, days of the week, an event nearby etc. could be factors in increased cancellations.
Due to longer lead time, OTAs often have a higher cancellation rate. However, they also bring business. Though you should list the property on OTAs,
it’s also important to keep track of other properties in the listing page to understand what they’re doing right.
Guests often make multiple bookings well in advance, only to cancel all but one a day or two before the arrival date.
Try to make sure you’re the one that’s not cancelled. Stay in touch!
In certain countries, fraudulent bookings are a matter of concern. These are often made to get visa. Keep a check on such customers,
primarily travelling from countries with stringent visa policies.
You must have understood how cancellations and no-shows impact your revenue and other things in business. So here comes the rescue plan.
We’ve tried to provide you with certain tips that could help improve the overall customer experience and engagement to reduce cancellations and no-shows on the website.