How to manage cancellations?

21 April 2021

How to manage cancellations?

Property managers should keep track of reservations as they come in but not in spite of cancellations, these inevitably also form part of the reservation flow and for this reason deserve attention.

In case your vacation rental business suffers from a high number of cancellations you should analyze this trend further to understand motivations behind it. Reasons may vary and be due to external and unpredictable events such as flight cancellations, sudden sickness or border closures, but also be motivated by a change of plans. Analyzing this first basic information will allow property managers to spot where there is margin for improvement.

There may be various reasons for a gust to cancel their reserved accommodation:
  • The guest decides to stay in a different property because of specific advantages (price, position, comfort, etc)
  • Personal reasons like a sudden change of plans or sickness
  • Force majeure

There are different actions that can be taken to minimize the negative impact cancellations have on the business and attempt their recovery like offering alternatives to guests. In these cases flexibility is naturally very important however cancellation policies must be respected at all times because these mean to work as equalizers. Cancellation policies minimize the negative impact derived by the loss of expected income and simultaneously place the product back in the market to receive another reservation generating another sales opportunity. Nonetheless the ideal would always be to recover the reservation, and this may be done by:

  • Offering a discount code corresponding to the reservation amount for the guest to use in the future
  • Propose a free date change
  • Propose a free upgrade into a better property

How can we put into practice concrete strategies with Icnea?

Our PMS Channel Manager includes a section dedicated to discount codes that can be customized in many ways. It can be configured in validity range, stay dates range, to be applied only to the amount due for the stay or to the entire reservation amount. All a property manager has to do, apart from creating it, is sharing the code with the guest so this can reserve again. Having an amount in the form of a coupon, ready to be used at pretty much any time, is quite usually appealing.

Secondly, Icnea also has a section dedicated to newsletters and massive communication in general. A dedicated email can be prepared to send to all those guests who cancel the reservation and this way inform of the different options available.


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