The problem of last-minute cancellation and no show arise due to many reasons such as guests have to get better deals somewhere, a messed up cancellation policy and radio silence post bookings, etc. This problem directly affects the revenue of the hotel. It depends on many factors, few of them are listed below:
- The vacant room in the hotel is probably a loss-making entity for the day. And you should try to sell the room at a lower rate.
- If your OTA listings drop down on google search results, then it directly affects your rankings and in turn, the overall sales and revenue.
- Last-minute cancellations and no shows lead to extra work and more pressure. And you need to start from scratch again when the done deal is not done in time.
Cancellations are coming from
- when a guest makes multiple bookings in advance.
- Fraudulent bookings are done to get a visa.
- Due to the longer time, OTAs have a higher cancellation rate.
- It also depends on the type of rooms you provide to your guests.
Cancellations and no shows directly impact the revenue of the hotel. We discussed some tips that can definitely help you to improve the overall customer experience and engagement to reduce cancellations and no-shows on the website.
Make sure you have a good cancellation policy
Strict cancellation policy can have a great impact on reducing cancellations. It is very helpful in reducing fraudulent bookings and safeguarding the interests of the guests. If you offer better options on OTAs, it might lower your chances of getting direct bookings.
Require Card Deposits
Try to accept payments through cards deposits to secure payments. Partial and complete payments at the time of bookings may come with offers and discounts. It reduces the chances of cancellation, but even has a positive impact on conversion.
Set Discount and Advance Purchase Rates
To get easy and early bookings, you must offer upgrades and discounts. Sometimes a fully non-refundable booking is good, especially when it comes to a deal or a discount. OTAs had a low cancellation rate and it offers special package deals, such as Hotel plus Flight offers.
Use Length of Stay Restrictions
You must check out the policies of your competitors on length of stay restrictions. Some hotels do not allow one-night booking on busy days or when an event is happening nearby. These restrictions fit with your revenue management strategy and also provide you with additional revenue.