Cancellations and Booking Policies
This season I have had more no shows (2) and very late cancellations (4) than I have had in the past. I would normally only receive 1 or 2 late cancellations and I haven't previously had a no show so this is unchartered territory for me. And it is so frustrating when it happens! As B&B owners we all care about our guests so I spent a number of hours hanging around waiting and hoping there hadn't been an accident.
To try and prevent these cancellations I have decided my booking policies need careful consideration and redeveloping - and this needs to be done sooner rather than later as I already have a number of bookings for next year. Of course, for these future bookings I am bound by my current booking policies.
It is so important to ensure you have collected valid credit card information (luckily I had). My policy if there is a no show and no contact - I charge the full room rate, no ifs, buts or maybes. It is simply not good enough for a guest to fail to cancel a booking and expect you to lose out on potential income. Depending on which channel your booking has been received through there are also certain processes you need to follow so ensure you either contact the OTA or read their information on what to do for no shows.
Sometimes a guest may ring and have an excuse (for example, one of my guests thought they were booking a property in Ireland!) in which case I may negotiate a discounted rate to cover expenses (I charged half the rate - now know there is a property the same name in Ireland and it’s an easy mistake to make - I guess).
Late cancellations require a different approach. I know a number of owners charge a deposit or take part payment one or two months in advance and full payment one week in advance (or variations on this) and I would be really interested to hear if this has made a significant difference to you?
Also, within what sort of time frame do you receive your late cancellations? Mine were all within 2-3 weeks of arrival so I am thinking that I might charge a 50% non refundable room payment 4 weeks from date of arrival and the balance remaining the day of arrival. This may (or may not!) reduce the number of late cancellations.
Whatever policy I choose, I need to ensure that this is very clear on the relevant booking platforms - particularly Booking.com. Whilst guests booking on Agoda bookings have already prepaid and are less likely to cancel I will still need to ensure my policies are consistent on this site just in case.
There are some regulations around taking deposits early - but by making my booking policies clear that 50% payment is required to confirm the booking and that this is non refundable I believe I negate these. However, if say, I were to take the full amount upfront (as Agoda, for example, do) with cancellation policies closer to the arrival date, I would need to fully check the banking laws and may be required to have a trust account (similar to lawyers / real estate agents for holding housing deposits), however, this does require further investigation.
The final thing I am going to do is to target more Inbound Tour Operators (travel agents). Whilst I do have the occasional cancellation from a travel agent these are usually so far in advance for it not to be a concern or the agent has automatically offered to pay a fee. Of course, the best place to do work on increasing this type of business is at conference at the Travel Trade afternoon where I can build on existing Agent relationships and create new ones.
These two websites have some great information:
https://www.consumerprotection.govt.nz/.../contracts-and.../
https://srblaw.co.nz/unfair-contract-terms
Fiona Rollings
5 March 2019