How to reduce your cancellation rate

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Technology has come to speed up the reservation process and push it to make decisions impulsively and without prior meditation. But also, to facilitate the process of change, modification or even cancellation more easily and quickly than ever before. These processes, which were previously managed through third parties and in a more conventional way, are now available to the client with just one click.

The cancellation rate, which has been growing in recent years, the change in the great concern of many hotels and professionals in the sector. has become a major concern for many hotels and professionals in the sector. The new commitment to online distribution and room packaging has led to a major change that directly affects the management of reservations.

In most cases we focus on the OTAS as directly responsible for the high rates of cancellations, but if we change our gaze and also focus on the policies applied, we will see that we can obtain better results if we manage them properly.

Here are some tips that can help you to reduce the high cancellation rates:

1. Detect and analyze the channels with the highest ratio.

This will give us clues to know where we can focus solutions and reduce cancellations. In addition, it will help us to know if our cancellation policy is too flexible and facilitates cancellation. Also, we can check if it is due to the lowering of the rate after purchase, or if it is a cancelation who goes to another portal or the price, among other aspects.

2. Check with attention you rates

If we detect that the tariff is the main obstacle, there is something that we are not doing well. The ideal is to start from a cheaper rate to make units mattress and progressively raise our rates, In this way, we will avoid cancellation problems due to a reduction in rates.

3. Encourage direct sales with attractive prices.

Another method that can help us encourage sales, improve the level of occupancy and reduce the level of cancellation, is to offer customers attractive rates, but with restrictive conditions such as non-refundable rates. If we apply a good discount, even if the customer hesitates, we are ensuring the reservation. This maneuver helps us provide liquidity to the hotel prior to the arrival of the client.

4. Establish a fair cancellation policy.

Undoubtedly, the cancellation policy that applies is decisive in the final purchase, so we must analyze if it is possible to apply different cancellation policies according to the date, events or even channels, for example, it can penalize channels with more cancellations and applying more restrictive policies.

In conclusion, establishing different cancellation policies that make our offer more attractive can increase our reserves, but it can also have the opposite effect if it is been canceled. So, if we always apply the same strategies and don’t face the problem from another perspective, the cancellation ratio will continue growing and will continue directly affecting hotel revenues. From our point of view, we believe that the most convenient thing to do is to do a more detailed work with the strategy that we have established to control the ratios and that sales are not affected.