Your top priority as a host is often to boost reservations for your vacation property and maximum occupancy, especially during peak season. It can be difficult to accomplish this during a pandemic, though. The coronavirus outbreak has directly impacted most industries, from lockdown limits to a new fear of traveling.
It has never been more crucial in the vacation rental market to handle cancellations properly for both owners and visitors. This post will cover the causes of booking cancellations, how to prevent them in the future, and how they affect your vacation rental business.
Why do booking cancellations cause such harm?
Low occupancy directly equates to lower revenue because every empty room in a holiday rental results in a shortfall.
You cannot seek a refund for the time and money spent on a booking that ultimately fell through, even if you immediately republish your listing after receiving a cancellation.
A decline in ranking
In addition to the lost time and money, subsequent guest cancellations and no-shows might hurt your search results, whether on the Google search engine or on listing sites you use for advertising.
This might negatively impact reputation. This is because a high booking rate results in more guest reviews on your website or other listing sites, which raises your search result rankings and makes your vacation rental more visible.
Added stress brought on by an increase in work
Reservation cancellations increase workload and pressure. To avoid losing out on converting new potential visitors, you must update your availability calendar as quickly as possible in addition to handling the paperwork associated with the last-minute cancellation. Additionally, if you are unable to find any other guests quickly, you must now be concerned about the profitability of your holiday rental.
Why do you keep getting canceled reservations?
Be aware of the circumstances at hand
During certain times, guests may need to cancel for a variety of reasons, including statewide restrictions and personal circumstances. Whatever the reason, it’s important to be considerate and sympathetic when cancellations do occur.
Make contact with the visitor who canceled.
To learn why the guest who ended up being a no-show opted to cancel their reservation, try to get in touch with them as soon as possible. If you are aware of this, you can take proactive measures to foresee and stop a situation like this from happening again.
See who your rivals are.
Some guests may change their plans and stay at a competitor’s property instead of with you. However, what led to that unexpected change of heart?
Are there outdoor activities and tours offered by your rivals? Or maybe they have a more lenient cancellation policy than you do. To learn the answer, you must carefully examine what the rival offers and contrast it with your offering. This will offer you an overview of the aspects that ultimately influence your guests’ decisions. Price, amenities, services, special deals, and other factors could be included.
You may match and even outperform your competitors by paying attention to the essential components of their success and their strengths and flaws. Just use that information to enhance your offer. In addition to increasing your bookings, doing this will prevent any last-minute cancellations from guests in the future.
Reconsider your target audience
It might be beneficial to reassess your targeting plan. You may be trying to attract the incorrect visitor to your vacation rental.
You can examine anyone who has previously canceled a reservation to see if this is the case. A family, an elderly couple, a business traveler, or a group of youthful backpackers? What were their unique requirements, preferences, and needs? What kind of rental did they cancel, and when did it happen (winter or summer, a noteworthy holiday or event, etc.)?
Suppose your hotel is in a busy, energetic city with clubs, restaurants, and frequent events nearby. In that case, you should focus on attracting younger visitors, like millennials, especially if your rental cost is lower! Budget tourists will ensure that you are completely booked, which will be far more profitable for you than charging higher rates and receiving cancellations from families and senior citizens.
If the latter is the case, you should review your targeting approach and be honest about the kind of visitor who is a good fit for your lodging. A family with young children will likely favor a larger, kid-friendly home in a peaceful, safe neighborhood. Your reservation may be canceled if they discover a last-minute deal that meets those criteria better than your lodging.
Rethinking your target demographic could be your savior during the coronavirus epidemic. Analyze brand-new visitor categories that have emerged due to the epidemic, including domestic tourists or workaholics. Make the necessary adjustments to your vacation rental home and website to draw in these customers and maintain your company’s viability.
How to predict and avoid cancellations of reservations
Explain your cancellation policy for vacation rentals.
Your cancellation policy for vacation rentals must be prominently displayed in your reservation system so visitors can read and comprehend it before clicking the “Book” button. Ensure all of your guests understand their obligations during a no-show or cancellation.
Include a cancellation date as well as information on cancellation fees and refunds. Your guests must clearly understand that they will be charged a price if they cancel after the deadline.
Additionally, adding a percentage to the amount still refundable after the deadline will shield your company from suffering significant revenue losses in the event of last-minute cancellations. There is still a chance that guests will cancel before the deadline, giving you plenty of time to update your availability calendar and locate a new guest to fill the newly vacant room. Even last-minute deals could be used to entice visitors searching for a quick deal.
However, we advise you to adapt to this turbulent and always-changing moment. Even if your prospective guests are fully committed to traveling with you, their disinterest may be caused by the rigidity of your cancellation policy. You will also get more reservations if you calm the nerves of your prospective visitors.
When making a reservation, require a non-refundable down payment.
You can also decrease cancellations by charging your guests for their stay as they check out. While some hosts prefer to charge the full cost at the time of booking, others will just want a non-refundable down payment of a certain proportion. Because they risk losing this money if they cancel later, passengers are consequently more motivated to complete the booking.
To avoid conflicts with credit card issuers, specify in your cancellation policy that any upfront down payments are categorically non-refundable.
Offer a discount for confirmed reservations
A small promotion to your guests as a thank you for making an immediate booking confirmation can be a wise move. It motivates them to make a decision more swiftly and refrain from doing so again.
You may, for instance, provide a promotion or discount for their upcoming reservation if they pay in whole or in part at the time of booking. This not only lowers the possibility of cancellation and increases the conversion rate of your bookings, but it also motivates visitors to stay and book again!
Inspect your visitors.
Even after they’ve made a reservation, you should express interest in them and keep in touch with them before their stay. You have already established a more intimate relationship with your visitors by staying in touch and paying attention to them. As a result, your customers will be less inclined to change their minds and less likely to cancel their reservations with you.
To win favor with your guests, you should personalize each of your messages and adopt a warm inviting tone. However, if you’re already pressed for time, another option is to automate messages that will send them reminders.
You can also choose the middle ground and plan individual emails or SMS if you think this needs to be more generic. In this way, you can still send each of your guest’s personalized alerts and updates about their upcoming stays or any exclusive offers you might have.
After a guest’s reservation has been confirmed, remember to contact them again, and take advantage of the chance to respectfully remind them about their check-in time just before their stay. Your danger of no-show situations will be effectively reduced by using this method!
Show that you are available.
Your responses as a host of a vacation rental must be prompt and precise. Make careful you live up to visitors’ expectations to prevent losing their trust before they ever step foot on your site. If not, you run the danger of having more cancellations and fewer reservations.
Guests will only have faith in a host who has already demonstrated their unreliability on what else they can expect from them during their real stay. As a result, they won’t think twice about rejecting you if a better offer comes along.
It’s crucial to consistently provide prompt and clear answers to your visitors’ questions. Even if they are requesting well in advance of a planned vacation. Don’t worry, you don’t have to stare at your screen nonstop to improve the guest experience. This constant communication will be made feasible by the use of automation techniques. The first impression you give will affect the caliber of the review your visitors post on your website or listing site afterward. As is well known, the success and reputation of your vacation rental business are directly influenced by the reviews and comments of other visitors. Even some folks might cancel or show up without calling after reading something nasty.
To lessen the damage, act immediately and intelligently in response to negative feedback. Keep an eye on the feedback on all your platforms (website, listing sites, social media, etc.) and interact with your visitors. This will avoid annoyance or booking cancellations entirely.
Changing a Guest Reservation
There are a few things you can do to prevent a bad review and keep the customer satisfied when you are forced to cancel a reservation.
1. Complete it as quickly as you can.
The least influence your cancellation has on the guest and your business, the sooner you cancel. Nobody wants their travel arrangements to be changed at the last minute and for them to arrive without a place to stay the day of the trip; it’s just not fair. Be prompt so that the visitor has time to find another option.
2. Be truthful
Always be honest with your guests. There can be an emergency or problems with the rental or with you personally. Inform them of the true cause of the cancellation. If you merely cancel their reservation without providing any “human” interaction, they can become irate and frustrated.
3. Say sorry
The best course of action is to apologize to the visitors as well as explain why you must cancel the reservation. Express your sincere regret for canceling their reservation and express regret for the inconvenience.
4. Provide a discount for more dates
The guests whose bookings you canceled can come back another time if you give them a discount. A 20% discount is appropriate and will still make you money. You’ll be able to schedule alternative events and avoid receiving a bad review.
5. Consider the consequences.
When you cancel a guest’s reservation, you can be subject to fees depending on the OTAs you use. For instance, on Airbnb, your account may be suspended if you cancel three or more reservations in a year. If your cancellation doesn’t qualify for a cancellation waiver on Vrbo, it will harm your rating metrics. When canceling a guest, keep this in mind and consider the effects on your business.
Template for Guest Cancellation
Here is an example of a letter you could use to inform the visitors whose reservation you are canceling, considering the abovementioned reasons.
Good day, [first name]
I regret to tell you that there are no longer any available dates for your reservation at [rental name]. This is because [provide specific justifications].
We value our visitors, so I ask that you give them a 20% off deal to stay at [rental name]. I want to apologize again for the cancellation and I hope to meet you again soon.
I sincerely regret any inconvenience this may have caused you.
I appreciate your patience.
How to Prevent Postponements
It’s not a good idea to regularly cancel a guest’s reservation. You should cancel as little as possible as a vacation rental owner, especially if the reservation has already been made. There are several things you can do and implement, nonetheless, to stop cancellations.
1. Clearly state the home rules
Make it obvious right away if you don’t allow pets. The same is true of huge gatherings, events, and smoking. To draw in more guests, many owners choose to relax the house rules that are listed in the listing. However, doing so may be a deadly error because it might result in unruly visitors. Set up all your restrictions to prevent frequent canceling.
2. Inform visitors of the minimum nights’ stays
The primary cause for owners having to withdraw a booking is having to cancel it since the guest needed to completely grasp that they could not arrange only two nights’ stay. Make sure your ad or website makes clear, exact reference to the number of nights that constitute a minimum stay.
3. Employ a channel manager
Two guests booking the same dates will only happen if your calendar is updated occasionally. Even while you can always do this manually, you might only sometimes be able to maintain it current owing to different time zones or if you’re not available.
Therefore, it is preferable to have dedicated vacation rental software that offers a channel manager. All of your external vacation rental listings are synced with your calendar by a channel manager. You will be fine with making duplicate reservations or canceling them with everything on one calendar. The issue is resolved.
Fortunately for you, Lodgable offers exactly that for you! Sign up for your free account to see for yourself!
4. Provide a detailed description
You must be truthful so that the visitor understands what to anticipate. Make it explicit in your description if your property is not suited for guests with limited mobility or is not safe for youngsters.
5. Highlight your cleanliness and safety procedures
The majority of those who are currently postponing their vacations do so out of dread. By taking extra precautions with sanitation, you can ensure your and your visitors’ safety. To ensure that potential customers are fully aware of the steps followed, make sure to describe thoroughly all the cleaning operations that have been performed on your ad or website.
Why Avoiding Guest Cancellations is Best
Canceling a reservation reflects poorly on your company and may lead to a bad review. When a visitor plans their trip, they expect the lodging search process to be simple and hassle-free. Because of this, a cancellation can spoil their trip.
Additionally, if you cancel multiple reservations, your property will appear unreliable and potential visitors may hesitate to reserve it out of concern that you would also cancel. It will give you a bad reputation over time.
If you have a listing on an OTA, canceling a reservation will result in a considerable decline in your ranking on these pages’ search engines, making it more challenging for visitors to find your property there.
As discussed earlier, OTAs could even charge you to cancel. Anyhow, canceling a reservation in your listing presents a negative image of your company and reduces its visibility. Additionally, if you repeatedly cancel appointments, you risk being banned from the website.
What to Remember
Regardless of the situation, being ready to adapt your strategy will always be beneficial to your business.
Of course, cancellations occur, and occasionally you have no choice. If despite your best efforts, the visitor is still dissatisfied, they will probably leave a bad review and post it on your advertisement, website, or social media account.
A good review will only have a significant impact on your company if you know how to handle it.
It is not a matter of retaliating but rather of responding positively. The guest must know that you value their feedback and that you’ll use it to improve your business. Thank them for their interest in your rental accommodation, express your regret, and reiterate the cause for their complaint (if you already stated it in your cancellation response).
Never allow negative feedback to depress you. Instead, maintain composure and maturely approach them. The secret is never to lose your optimism!