4 Tips to Control Hotel Cancellations and Recover Losses - Our Guide

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4 Tips to Control Hotel Cancellations and Recover Losses – Our Guide

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Of all the problems that you’ll encounter while running a hotel, room cancellations are among the worst. Even though you might be able to recover some of these cancellations and get your rooms booked, consequences will still arise. For instance, when this occurs too often, your customers might develop a false idea of high demand for your rooms. Some may even book rooms at other backup hotels, trying to keep a spot at each one while they make their final decisions. Unfortunately, some will ultimately cancel and choose to stay elsewhere.

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How do you manage these cancellation rates and ensure that you don’t lose too much from this? We’ve got some advice for you.

Here are four tips to help you control hotel cancellations and recover the loss:

1. Compare the Lead Times
First things first, the best way to determine whether a booking will end up as a cancellation or become an actual stay is to see how early they made the booking. Generally, reservations that are made far in advance have a higher rate of getting canceled compared to ones booked a few days before the guests supposedly arrive.

Of course, the lead times you might experience will be different, so you’ll have to do some testing. When you finally come to lead times that indicate whether a booking will be canceled, you can better prepare yourself to resell the rooms the moment they get canceled.

2. Figure Out How Early Cancellations are Made
Another valuable analysis to make requires you to figure out the average days the bookings are canceled before the day of stay. This number can change depending on the month as well. For example, bookings made earlier in the year can experience a 15-day gap between the date of stay and date of cancellation. Bookings made in the middle of the year can experience up to a month’s difference!

With those numbers, you’ll be able to know when you’ll have to put more effort into reselling the canceled rooms. When the difference is smaller, you’ll have to pay close attention to cancelations, catching them as early as possible and releasing them for rebooking compared to other times when the difference is over thirty days.

3. Adjust your Demand Levels Accordingly
With the data you’ve collected from the tips we’ve given you above, you can then start to utilize overbooking practices and correctly adjust your demand levels. This allows you to set the right amount of overbooks to be made to ensure that the rooms will always have someone staying the night, even despite the cancellations made.

4. Remind Guests about their Bookings
Of course, while you can utilize overbooking practices and adjust demand levels, the best way to counteract cancellations is to prevent them from happening or control them. For example, you can remind the individuals who’ve made bookings in your hotel about your cancellation policies. You can even give them a cancel-by date should they ever change their mind, giving you a chance at reselling the room should they abide by it. In other words, what you’re trying to do here is to control uncertainty.

In conclusion, do your analysis and research and place in measures to help control and prevent cancellations. By being able to manage your cancellations and further prevent them from happening, you’ll be able to ensure that your rooms aren’t left empty at times where demand is high.

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