Calls to cancel hotel reservations happen with regular frequency in the hospitality industry. In fact, many would consider them an utterly inevitable aspect of the job. Because of this commonality, hotel cancellation policies are an important part of quality hotel management practices.
How your hotel chooses to handle cancellations and the types of policies that are derived from this outlook can make a profound difference in overall customer satisfaction, brand loyalty, and branch reviews. Customers who perceive cancellation policies to be fair and flexible are more likely to have a positive outlook on the hotel and choose to stay when they travel next. Likewise, they are less likely to post negative reviews and more likely to recommend your hotel to others.
Crafting the ideal cancellation or refund policy is no small feat. It takes time and research to determine the best strategy for your hotel and it may need to change slightly depending upon a number of factors like region or seasonality. However, putting in the effort to develop a quality cancellation policy can go a long way toward increasing guest comfort and satisfaction.
Developing clear communication strategies
Arguably the single most important part of developing a cancellation policy is making it clear and understandable to the general populace. You can avoid a great deal of frustration and confusion by using clear, simple language to communicate your cancellation policy’s terms and conditions. Before they make a financial commitment, most customers want to know cancellation details such as:
- Time frames for cancellations
- Whether a full refund for a cancellation is available
- Methods and procedures for requesting a cancellation
- Exceptions and exclusions to your cancellation policy
- Who they should contact if they have questions
It can be easy to brush off the importance of a cancellation policy, but it can have a real impact on customer behavior. One study on hotel cancellation policies found that customers behaved differently based on the cancellation timeframe of different hotels, but that their behavior wasn’t as impacted by cancellation fees. Ultimately this means that your policies can make a real difference in how customers view your business and willingness to work with them.
The study also shows that many customers are willing to shop around for a hotel that has clear and flexible cancellation policies. As you design your own policy it pays to research what competitors are doing and strive to match or better their policy. It may seem counterintuitive, but having the simplest and easiest cancellation policy in town may actually earn you more business and help with growth.
Incorporating flexibility
A well-written and clear cancellation policy is valuable; the next step is incorporating flexibility. This doesn’t mean breaking your clearly written policy to appease customers. Rather it is more about offering a suite of cancellation options that encourages customers to keep doing business with you in the future. Some of these options may even prevent them from asking for a refund at all.
The big thing to remember is that customers may have to cancel reservations for any myriad of reasons including things beyond their control such as health emergencies, canceled flights, or various travel restrictions. When these situations come up, offering opportunities or incentives for customers to reschedule or rebook their reservations may be an alternative to them canceling completely. Different flexible options may also be a good choice for customers who participate in loyalty programs as well.
Plenty of other situations exist where adaptability can play a role in helping to improve guest comfort and positive relations. For example, many senior travelers have a number of special considerations such as room accessibility or higher medical risk factors. Flexible options such as adjusting room accommodations to better suit guests’ needs in these situations can be a great way to show that you are listening and care about the satisfaction of each and every guest.
Streamlining refunds and getting feedback
Even with an exceptionally flexible plan with options for guests aside from a full cancellation, there are still going to be full refund requests. Fortunately, even in this situation, there is still an opportunity to make a positive impression. Using technology to streamline refunds, for instance, is a great way to ensure customers consider your hotel again in the future. After all, nobody likes to wait weeks for a refund on a canceled reservation.
Asking for feedback is another great way to stay engaged with your cancellations in a positive manner. This gives those customers an opportunity to offer suggestions on how the cancellation policy can be improved upon or updated. Helping customers to feel heard is an important strategy for keeping them satisfied.
Feedback can also be an important tool for determining when you need to change course quickly. For example, hotels and airlines that refused to offer refunds during the height of the COVID-19 pandemic received plenty of negative feedback. Many experts believe that while these decisions may have kept companies afloat in the short term, all of the negative interactions with customers during that time may result in long-term damage.
Hotel cancellations happen. What really matters for those in the hospitality industry is how they are handled when they do. Positive guest interactions associated with cancellations including clear policies, flexibility, and efficient service can go a long way in ensuring that people keep coming back again and again.
