The Benefits of a Flexible Cancellation Policy

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Joshua Meehan
Joshua Meehan
December 24, 2014
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Traveling can be a stressful time. With unpredictable weather and delayed flights, it’s not uncommon for travelers to cancel their plans all together. Unfortunately in today’s industry this isn’t always possible.  Cheaper, non-refundable rates are an attractive offer for travelers looking to save some money, but their savings are quickly lost when it comes time to cancel. These rates have traditionally been found with airfare, but recently some OTA channels have begun offering similar packages or rates to help increase bookings. When plans change or the unforeseen happens, there are few options available for the guest. Usually they are supplied with a credit for a future reservation, but getting a refund is next to impossible. So how can hotels use this to their advantage?

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Cancellation policies can be helpful for creating a revenue strategy and anticipating occupancy, but how strict do they need to be? One of the benefits of booking directly with a hotel is the flexibility compared to booking with an OTA when something out of the ordinary comes up. Generally, speaking with someone at the property can help resolve most issues, but when it comes time to cancel a reservation it can be just as frustrating. With how competitive the hospitality industry is, the benefits of a flexible cancellation policy far out weight any missed revenue. Agreeing to cancel a reservation is a great way to preserve the relationship and help encourage another booking. When dealing with a cancellation request, taking things on a case by case basis is the best approach.

There are many factors to consider when deciding if it’s best to permit a cancellation. Maybe the rates for those nights are currently higher than when it was booked, or that room type is in higher demand. Also be sure not to ignore the human factors. Consider the guest’s explanation when making a decision, since adding frustration to their situation is a quick way to receive negative reviews. As guests become more familiar with hotel policies, they are finding loopholes and sharing them online. A common one popularized online, is for guests to just change their reservations dates to a week later and then call back and cancel the reservation. If it is that easy to get around the cancellation policy, why make it harder and run the risk of negative exposure?

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