How can you reduce your cancellation rates in 2020?
As a hotelier, it’s part and parcel to account for a certain number of cancellations every year. OTAs like Booking.com have trained us as modern consumers to treat booking multiple hotels in advance the norm – book now, decide later. Their own cancellation rate in 2018 sat at a phenomenal 50%.
Every year we analyse the latest cancellation data in order to prepare you and your property for the year ahead, because if you’re familiar with these changing rates and patterns, you’ll be better equipped to combat them and keep cancellation numbers low.
Let’s take a look at what cancellation rates were like in 2019!
- The cancellation rate for 2019 was 11.8%; the same figure as in 2018
- The spike you can see in cancellations around August 2018 is most likely due to the good weather – people probably decided to stay home and soak it up while it lasted!
- There was an increase in cancellations in December (10.7% in 2018 v 13.5% in 2019). There was evidently a flu going round this winter season, so if people are sick, they’re not going away anymore
Cancellation lead times
- This looks at how far before arrival guests cancel their booking
- The cancellation lead time before arrival for 2019 on average is 31 nights (an increase from 30 in 2018 and 27 in 2017)
- This is something you will need to keep an eye on in arrivals reports – if your hotel’s cancellation lead times are high, you will need to ensure that you have an incentive for guests to book early and not cancel – e.g. Advance Purchase rates
Cancellation lead times for arrival bookings
- For 2019, the average lead time for arrival bookings is 44 nights, down one night from 2018
- For cancelled bookings, it’s down from 54 nights to 52
- For stayed bookings, it’s down from 42 nights to 41
Unfortunately, cancellations aren’t going anywhere – take comfort in the fact that cancellation rates from direct bookings are generally much lower than on other platforms!
There are things you can do to ensure your cancellation rates are the lowest they can be, consider the following for starters:
- Promote a Prepaid / Advance Purchase rate. If the guest pays at the time of booking, they will receive a small discount. Ensure that you have a facility in place to take payment electronically at the time of booking to avoid issues with manual payments
- Set up a pre-stay email to send a week before arrival. This will allow you to upsell hotel facilities and remind guests of cancellation policies. Hopefully at that stage if they need to cancel they will advise you immediately giving you more time to resell the room
- Collect data on why guests are cancelling when they email or call the hotel. This will help you understand if a specific issue is arising and you can tackle it specifically
Interested in finding out more about cancellation trends? Click here!