By Don Binkley – Property Providers
Managing cancellations is a fact of life when running any holiday rentals portfolio. Life would be much easier if all guests navigated our websites independently with ease, and booked and paid in full, without us having to do anything. Also, wouldn’t it be nice if property owners never wanted to use the property for themselves, never had plans to sell and always invested to keep the property in great shape.
The reality is that peoples’ plans change, and holiday managers have to pick up the pieces and make it work. That’s what cancellation policies are for.
Cancellations can be difficult and time consuming to manage and the bottom line is that cancellations can damage our brands and reputations. That is why agents should be doing as much as possible to reduce cancellations from happening. However, when they do occur there is a silver lining.
Cancellation policy rework
Determine the metric and ask why
Seek to clearly understand what your cancellation rate is. The questions you should ask are:
- What proportion of your overall bookings cancels?
- What channels, properties and staff have the highest probability of cancellations occurring?
Next, try to understand why people are cancelling. YesBookit has recently introduced an addition to their software which has proven to be very valuable in determining this answer.
Try to work out the timing from the initial booking date that people are cancelling. The longer you take to get money, the less likely you are to get it. Get as much money upfront as you can; that way you have leverage.
Define and think laterally
- What is your cancellation policy exactly?
- If you rebook the property, is the money you get from the initial cancellation now agency revenue? If not, it should be. That equals double commission for your agency.
Consider creating an Owner Cancellation Policy. You absolutely can, and should, charge owners when they need to cancel as this is out of your control.
Ensure that your Guest and Owner Cancellation Policies are aligned and work together in harmony. Also consider adding policies around shifting/shortening dates, as you should be earning at least another booking fee from this.
- Put incentives in place to inspire staff members to actively and rapidly rebook the property through demonstrating preference and advocacy.
Measure and manage
If you cannot measure it, you cannot improve it!
- Measure how many cancellations you have every month and the corresponding revenue that you have made from it.
From following this process, Property Providers™ have earned enough revenue from cancellations during this financial year, to effectively pay for a junior staff member. It has not been easy, but it has certainly been worth it.