Cancellations, especially last minute ones, are the bane of the hospitality industry as a whole. In this article we are taking a deep dive into what cancellations mean for a hotel and how understanding where they come from is the key to mitigating their impact.
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Why do Hotel Cancellations Matter?
Did you know that almost 20% of hotels rooms booked online are cancelled before the guest arrives? (Source:
That’s 1 of every 5 bookings you get!
It not only directly impacts the revenue, but also leads to poor marketing, since Online Travel Agencies keep track of cancellations drawn by a hotel.
Before we move on to the rescue plan, here’s why cancellations are worth talking about:
Guest Cancellations Lower Occupancy, Leading 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.
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.
Guests sometimes 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 visas, sometimes they are parts of clever and fraudulent schemes. Keep a check on such customers, primarily travelling from countries with stringent visa policies into your country.
OTA Reservations are more Likely to Get Cancelled
a study from Mirai, cancellations from a hotel’s website amount to only 19% as compared to 39% on Booking.com and 25% on Expedia over a 4-month period.
Due to longer lead time and the lack of loyalty to a specific hotel, OTAs often have a higher cancellation rate.
However, they also bring business. Though you should list your property on OTAs, it’s also important to keep track of other properties in the listing page to understand what they’re doing right and how you could leverage that information to reduce cancellations at your property.
What are Last Minute Hotel Cancellations
Things come up. Circumstances change. Plans get disrupted and bookings gets cancelled. It happens all the time. But there are different types of cancellations:
"Last minute cancellations", also called "late cancellation" is a cancellation that happens after the property specific cancellation policy has expired.