How can a Hotel Reduce Cancellations from OTAs?

According to a detailed analysis of web booking trends last year, one in five hotel bookings on the web are cancelled.

Almost every hotel grapples with this issue at one time or another. So what are you doing about it? Just grumble at how poor the quality of bookings from OTAs are (although you need them) or put in place a clear strategy to minimise impact of no shows and cancellations from the big OTAs?

Here are some actions to get you started if this is an area of concern for your hotel!

1 – Understand why! OTAs are specialists at encouraging the culture of early bookings. They inspire customers to book even before they are sure they will be travelling.

2 – Evaluate booking and cancellation patterns by OTA. Identify source of cancellations, type of room and price category.

3 – Communicate with guests directly where possible – especially if they have booked for a longer period. This will allow you to judge the quality of the booking and also prevent a guest from cancelling late as they have first-hand contact and the feeling of being cared for by the hotel. Ie a personal touch even with an online booking.

4 – Monitor and control prices on all channels. This will prevent unnecessary cancellations and “channel hopping” ie cancel in one and book on another.

5 – Review cancellation policies and their impact. This is an area that very few independent hotels pay adequate attention to. It has a big impact on the volume of bookings, frequency and level of cancellations. Fine tuning a cancellation policy to work well takes time but it is worth the effort.

6 – Explore if you can offer lower pricing for guaranteed bookings. Offering lower, advance non-refundable rates will ensure that the hotel will be paid even if guests need to cancel last minute.

7 – Use principles of revenue management. Manage not only prices when occupancy increases but also the cancellation policy related to last minute bookings.

8 – Offer attractive package deals. Using additional incentives like tickets to events or restaurant discounts can be a good way to retain that online booker.

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