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How to Deal with Bookings Cancellations

automation cancellations insurance listing help pricing tips & tricks Sep 25, 2020

When you are running a vacation rental business, your aim is to get maximum bookings for maximum profit.  Whether you focus on a high nightly rate or on high occupancy, you want a good return on your investment.  If you start to experience cancellation problems or lower booking frequency, it can be a blow to your business.  Cancellations are even tougher because not only do you lose out on the income you would have made but, depending on the timing, it may be more difficult to refill that spot.  You may now find that bookings have slowed down considerably during that time frame.  Ouch. Here are some tips to anticipate and prevent these types of booking cancellations.


Look at Your Cancellation Policy


Is it too easy for guests to book a reservation and then cancel their reservation with just a few clicks later on?  If yes, then you need to make changes to your Cancellation Policy.  We have ours set to “Strict” for a good reason.  Most of our reservations are made several months out so it is extremely difficult to make up cancelled reservations as they get closer to the arrival date.  Therefore, we have a deadline and penalties after a certain number of days when the reservation is made and a certain number of days before the reservation will take place.  We make our guests understand their responsibility once they have booked our property and we offer them Travel Insurance if they are afraid that they may have to cancel for a variety of reasons. If possible, include a cancellation fee and a deadline after which bookings cannot be cancelled.


Find the Reason for the Cancellation


You can ask your guests why they chose to cancel their bookings. You may get different reasons from different guests but you should get down to a common thread among these reservation cancellations.  Deaths and illnesses are easily documented and should be, in my opinion, refunded promptly.  Other reasons might be easily fixed so you can prevent further cancellations.


What do Other Short-Term Rental Owners Do?


Some guests cancel their booking to stay at a vacation rental of a competitor who may be offering a similar property at a lower price.  A strict cancellation policy can fix a “looky lou.”  Just knowing they’ll have to pay “X” amount for cancelling can prevent them from looking.  So can Post-Marketing (see Building Anticipation below).  You need to find out the reason why the guest got attracted to the other place (usually price).  You should be a private detective and find out what is being offered by your competitors BEFORE guest even book with you or them. It could be lower prices or the allure of value-added services that make your guests cancel their reservations later on. Once you get to the root of the problem, it becomes easy to fix the problem and stop cancellations of bookings in your vacation rental.


Are You Targeting the Wrong Guests?


Go through the profiles of all the guests who have cancelled their bookings in the last few months. Do you find a common thread running? Are these families with small kids, young backpackers, or business executives that are cancelling their bookings? Look at your marketing efforts and match it with your property. Once you can correct any mismatch between marketing and vacation rental, you will find that cancellations of bookings come down significantly.


Can You Help Build Their Anticipation?


One thing we like to do is build anticipation.  Yep, just like the ketchup commercial sang.  We get our guests’ email address right away and put them into an Emailing Sequence before they arrive.  An Email Sequence is a series of pre-made emails we have created to build up their anticipation before their arrival to our property.  Each one is “dripped” a certain number of days after their reservation is made all the way through until their arrival.  This allows them to build their excitement for staying in “our” place, hopefully, keeping their eyes from roaming onto another property.



Now go and grow! 



Michelle R Russell

© The Prosperity Process, LLC  

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