What if customers could sell your rooms for you? Sounds insane? It’s not.
You might ask, Why would they, though? Simple. Imagine a situation where the customer is forced to make a cancellation and the reservation is nonrefundable. This is exactly when allowing customers to sell their reservations is profitable for you and the customer both.
This article will tell you exactly how you can minimize the loss of cancelling a nonrefundable hotel reservation.
If you are a hotelier, you already know the importance of nonrefundable hotel reservations. Unless you make reservations ‘ nonrefundable’ people tend to reschedule repeatedly or just not show up. You know how hard it is to re-sell those rooms again. So, you must do what is required even if it requires you to play the bad guy.
But here’s the thing. With COVID-19 looming on the horizon, you cannot really blame the guests for cancelling. They have as much control over travel bans and lockdowns as you do. That is, none at all. Is it correct to punish them for something that is completely out of their control? But you cannot keep running at a loss either. However, if guests know that you’re completely inflexible with your bookings, they simply won’t make reservations at all!
The reason why you have to make your non-refundable policy a bit more flexible is self-evident. Without flexibility, you simply won’t be getting reservations or returning customers.
The solution to this problem is simple. You have to reach a mid-way point. You have to allow options that make sure that neither you nor your guest runs at a complete loss.
Here’s a list of options that you might want to consider.
As a hotelier, there is almost no reason to not allow guests to sell their reservations. To you, one guest is as good as the other in a very practical sense. Boosting room occupancy should be your No. 1 priority, after all.
If you are a guest who is being forced to cancel, ask your hotel if you can sell the room. It is technically better for the hotel if they allow you to do so. If they allow you to sell the nonrefundable reservation, you won’t be running at a complete loss. And they won’t have to put in the hard work to find another customer. Plus, in this way- a new customer is guaranteed. The uncertainty decreases.
Wondering how to sell your nonrefundable reservation? Try a website like Sparefare.net. Buyers who travel on short notice flock to these sites. Just remember, you might still have to pay a fee to get the hotel to change the reservation. But still, this is an option worth considering because you’ll be getting most of your money back.
Most of the hotel cancellations happen because guests cannot make it at that particular time. But they would gladly agree to maintain their reservation if the dates were changed.
This is why another option is to keep the non-refundable amount and treat this as credit for a future stay. This way, you don’t have to refund the amount. You just give your guests a voucher that allows them to visit at a later date. Of course, there has to be a time limit on these vouchers. For example, you can specify that the credit amount will only be valid for 1 year.
In case the guest doesn’t turn up within a year, you get to keep that money. So, technically it’s as much of a nonrefundable reservation as it ever was. But it also makes room for the guest’s demands because you allow them to make future reservations later.
If your guests are cancelling out of the blue, you have to charge them a cancellation fee. But the twist is, this amount doesn’t have to be equal to the payment you make for their entire stay.
You can charge them for the first night and then refund you the rest. The reason for this is simple- You need time to find new guests. Now, this process of accommodating new guests in pre-sold rooms might seem intimidatingly confusing.
This is where Hotel Reservation Softwares or Property Management Systems come to the rescue. Shuffling around guests at a moment’s notice is hard. Thankfully, Property Management Systems like StayFlexi use automation to make the work much easier. No manual intervention is required. The moment someone makes a cancellation, the room is immediately put back up again on the inventory. Auto management of the inventory is one of the best features of StayFlexi.
So, say a party of five cancels. And you immediately have to accommodate three other parties within those rooms- it’s easy. Just trust StayFlexi to get the permutation and combination right.
Not all cancellations are the same. Some guests are cancelling just for the sake of it while some have a legitimate problem. In case of a bereavement in the family or severe sickness, you have to make room for adjustments.
Being a tough cop is necessary at times. But not when you are facing off against a guest who is cancelling because of a legitimate problem. And in these situations, you have to take their word for it. Your sympathy doesn’t seem very genuine when you are asking for a death certificate, after all.
As a hotelier, you might interject and say, “But then everyone might start using the same excuse!”
Yes, they might. This is why you should NEVER make your contingency plans public. Everyone has contingency plans but that doesn’t mean you have to allow everyone to be privy to them.
For example, say you have a rude customer who is demanding a refund because “You’re going to resell the room anyway!” Just smile and redirect them towards your nonrefundable reservation policy and that’s that.
This is a good idea if you are a frequent traveller. Travel insurance can get you your money back even on non-refundable hotel reservations. But you need to show them proof that you are cancelling because of legitimate reasons.
Travel insurance also has another very important purpose. You also get money back if you miss airline connections for unavoidable reasons.
No matter how scared you are of incurring losses on cancellations, not getting customers is worse. And you will never have loyal customers if you make no room for changes. Especially when the situation is out of their control as well.
This is why you must allow people to modify or sell their nonrefundable reservations. Selling a reservation is honestly great for you. You don’t have to look for new customers and the guest gets their money back. It’s a win-win situation. The other modifications mentioned on the list all keep in mind that you, the hotelier, do not face losses.
These are tough times for both travellers and hoteliers. So, coming to a compromise is necessary. Hotels function smoothly because they plan ahead. And the reason cancellations are so hated is because they throw all future planning out of the window.
This is where a PMS like StayFlexi can step in to help you. If you have automation managing your inventory, you don’t have to worry about either extensions or cancellations.
Want to know how else StayFlexi is great for both hoteliers and guests? Leave your questions in the comments below.
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