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Reduce cancellations - don’t leave money on the table!

Dorka Forgács
Nov 19, 2020 10:11:01 AM

A hotel room is a perishable product, and since you cannot sell today’s available rooms tomorrow, it might seem like time is always working against you - but there are ways to tame it and make it work with you.

The goal is to sell at the highest rate with the highest probability, so you need to segment offers for different type of travelers (based on booking window, age demographic, individual vs. group bookings, leisure vs. business trips, couples vs. families, etc.) and make forecasts for future period based on past trends, upcoming bank holidays and events. Here are some tools to help you maximize booking rates and minimize the chances of your rooms staying empty.

  • Well-thought out policies are essential

Make sure you have a transparent cancellation policy that is unified across all distribution channels, and payment obligations should be clear to your bookers as well, before they finalize the reservation. Set up different conditions for flexible rate plan (for example in the case of BAR) and strict rate plan (like a non-refundable policy).

  • Restrictions help you keep your numbers up

Length of stay restrictions are a great tool to generate higher revenue, plus they reduce the amount of cancellations. It’s simple math: a booking for 3 nights for 80€/night is a lot more valuable than a 120€ booking for only one night, and longer stay bookings mean a lower reservation count AND lower cancellation rate too!

  • Maximize the security of your payment settings 

Nobody needs to deal with the headache of fake reservations and you can easily filter those out with requiring prepayment from guests and setting up no-show penalty fees, so even if it happens, you still don’t miss out on revenue. Plus, to make online payments even more secure, make sure you use PSD2 compatible payments solutions.  

  • Be careful with overbookings

Overselling can be just as harmful to your business as underselling. Driven by the fear of no-shows you might have the urge to try to sell the same rooms or promise them to more potential guests at the same time, but trust us, this is just an extra risk that might hurt your reputation. Sometimes it happens by accident or miscalculation, and that’s okay, just prepare in advance with a relocation plan in place.

See? There are great tools available for you to start maximizing occupancy and filling up those rooms, today! All it takes is some planning and thinking through some of your hotel’s booking settings that you are already familiar with. 


PMS system tailored to your needs

    • Set automatic price modifications depending on availability changes
    • Set different pricing with a few clicks
    • Create multiple rate plans and discounts
    • Set minimum night stay
    • Use dynamic pricing module for finding the most optimal price
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