The first priority of any typical vacation rental host is to increase bookings and maximize occupancy. However, if you are experiencing a surge in booking cancellations, then that can greatly slow down your bookings.
At that point, you would want to ask yourself – what is causing the spike in cancellations?
Are there ways to anticipate the booking cancellations?
Just like any issue that directly impacts revenue, dealing with it takes understanding of the root problem, figuring out why it is occurring, and determining ways to stop it.
In this blog, we will cover the aforementioned requirements needed to deal with booking cancellations.
What Booking Cancellations Mean for Your Business
1. More Work for You
Increased booking cancellations signify a larger workload for you. When a guest cancels their booking not only will you need to handle the cancellation paperwork, but you will also need to keep your calendar updated to avoid losing even more business.
2. Low Search Rankings
In addition to the lost revenue and wasted time, booking cancellations can also have a negative impact on your search rankings. This is regardless of whether you are using listing sites or search engines like Google to advertise your Florida’s First Coast vacation rentals.
Your reputation could also be negatively impacted because of the importance people put on good reviews. When it comes to vacation rental investments, more reviews equal more visibility.
3. Reduced Revenue
Due to the fact that occupancy levels and revenue go hand in hand, when occupancy levels decrease significantly, expect your revenue to follow suit as well.
Finding Causes of the Booking Cancellations
1. Review your Targeting Strategy
Your booking cancellations could also be a result of poor targeting strategies. There is a possibility that you are targeting the wrong clientele.
To determine whether this is the case, you will need to review a few booking cancellations. When doing so, try to answer questions such as:
- When did most cancellations occur (summer, winter, etc.)?
- What rental type did they cancel?
- What were their specific requests, tastes and needs?
- Were they young backpackers, a business traveler, an older couple or a family?
In addition, you will want to examine your location.
Is your vacation rental located in a lively, dynamic city, with a buzzing nightlife?
If so, you may want to target millennials. This is more so if your pricing scale is on the lower end.
By the same token, if you are targeting, say, families, then you want to have a home that matches what they would be looking for in a place to stay. Among other things, your rental would need to be a larger, kid-friendly home situated in a neighborhood that is quiet and safe.
2. Analyze Your Competitors
Observe what your competitors are doing that you are not. The best way to do this is by comparing what you and the competitors are offering.
Is it the price?
Are they providing unique amenities and services?
Do they regularly run special offers?
Once you observe these key elements, try matching them or offer something even better. This will not simply help boost your own offer, but it can also mean more business for you.
Anticipating & Preventing Booking Cancellations
1. Provide Quick Responses to Your Guests
If you are slow to respond to guest inquiries, chances are that it is contributing to your booking cancellations. Being quick to answer guests’ questions, especially at the initial stages, makes for a good first impression.
2. Stay in Touch with Your Guests
Staying connected with your guests from the moment they book can also help you prevent cancellations. Ideally, you want to add a personal touch to all of your messages while also using a friendly welcoming tone.
Another recommendation is to follow up with your guests after they have confirmed their stay.
3. Consider Running a Promotion
Run a small promotion and reward guests that confirm their bookings immediately.
For example, you could persuade them to pay a certain percentage at the time of booking with a discount or offer for the next booking they make with you. This will help bring your cancellations down, while also encouraging repeat business.
4. Charge a Non-Refundable Down Payment at Checkout
This strategy can help you minimize cancellations, as your guests may feel more committed to going through with the booking. Some hosts choose to ask for a percentage as a non-refundable down payment, while others opt to charge the full amount.
Just make sure to state that any advanced payments made are strictly non-refundable. This can help you successfully handle issues with credit card firms.
5. Draft a Clear Cancellation Policy
Let your potential guests know what your cancellation policy entails before they book their stay. Ensure they are completely aware of their own responsibilities in the event they decide not to show up or cancel.
In addition, make sure you include details about the cancellation deadlines and any cancellation fees. State that you require your guests to pay the cancellation fee should they exceed the indicated deadline.
You can also protect your business from last-minute cancellations by putting a percentage on the refundable amount after the deadline.
The Bottom Line
If any of this seems overwhelming or confusing to you, contact a professional vacation rental property management company today!