When it comes to running a tourism business, cancellations are inevitable. Life happens, extenuating circumstances arise, or travel plans may simply change. But with a solid game plan in place, you can reduce last-minute cancellations and no-shows.
Prevention and management are both crucial to consider. What can you do to reduce the odd cancelled booking? And how can you manage cancellations in a way that is fair for both your guests and your business?
Let’s walk through some simple strategies you can implement in no time.
Create a cancellation policy
First, you’ll want to create a solid cancellation policy if you haven’t already. This is one of the most important things you can do to protect your business.
Three key things to consider when making a cancellation policy are:
- Resources – How much staff, equipment, or accommodation does your experience require? Do these resources grow depending on the number of guests?
- Time – What estimated timeframe will you need to fill that cancelled booking with another guest?
- Retention – How can you create a cancellation policy your guests will feel comfortable booking with? How can you balance your business needs with creating a positive guest experience?
The industry standard allows guests to cancel up to 24 hours in advance for a full refund. But depending on the type of experience you offer, this may not be a reasonable option for your business.
Tailor the policy to your business needs
If a full refund within 24 hours isn’t something your business can offer, consider a tiered cancellation penalty. You could allow guests to cancel within 15 days or more for a 100% refund, between 2-14 days for a 50% refund, and specify no refunds within 24 hours of a scheduled booking.
You’ll also want to consider a special condition for bookings that are cancelled due to COVID or other extenuating circumstances. Global health crises, travel advisories, and overall world uncertainties make it critical to plan ahead.
Make it visible and consistent
When your policy is ready, ensure it is clearly outlined on your website, booking page, and all outgoing communications. This ensures your guests understand their options right from the beginning.
Tip: If your tour is listed on an online travel agency—such as TripAdvisor—ensure that the cancellation policy matches your business’s policy! The default is a full refund within 24 hours, so you’ll want to update that if required.
How to reduce no-shows and prevent last-minute cancellations
Though cancellations are unavoidable, there are various things you can do to help prevent them.
1. Collect a deposit
One of the most effective ways to prevent cancellations and reduce no-shows is to collect a deposit at the time of booking. Depending on what works for your business model, this could be a certain percentage of the tour’s cost or a flat rate. This simple strategy reduces the number of non-committed guests who hastily book a time slot to hold their place— often the guiltiest culprits of a last-minute no-show.
With Checkfront, you can choose whether to require a deposit at the time of booking and, if so, accept payment right then and there.
2. Send reminders
Take a proactive approach and send your guests email reminders leading up to their tour date. This keeps the date fresh in their mind and prompts them to make any necessary changes to their schedule well in advance.
Add extra value with confirmation details, meeting place directions, FAQs, and other helpful information, like a packing list.
Checkfront allows you to enable automated email reminders, making this a quick and simple prevention method! It only takes a few clicks to have automated reminders ready to go, so your guests get helpful nudges leading up to their booking.
3. Give your guests booking flexibility — if you can
Depending on your business model and booking system, adding a flexible booking option is a great way to reduce cancellations. Though this doesn’t necessarily work for everyone, it’s a highly effective approach when possible.
Flexible booking offers a sense of security. Guests may not want to cancel their reservation, but things happen! Flights get delayed, travel buddies may get sick, or travel plans may change. By allowing guests to edit their bookings, you accommodate their changing needs while decreasing the time you spend on administrative tasks.
With Checkfront, you can allow guests to modify their bookings as needed. The amount of flexibility you offer is also up to you. For instance, you can enable guests only to edit a booking or also allow them to cancel, and you can limit their ability to make these changes within X days of the scheduled booking.
Solid prevention measures go a long way in reducing no-shows and last-minute cancellations. Thoughtful details—like helpful reminders and flexible booking—can create a pleasant guest experience right from the start. A win-win if you ask us!
How to manage cancellations when they do happen
The way you manage cancellations will have a substantial impact on both your guest experience and your business. That goes for when a guest cancels on you and also for when you regretfully need to cancel on your guests. Either way, it is a sensitive time for all involved, so making the best out of every potentially disappointing situation is vital.
How to manage cancellations from guests
No matter what circumstances your guests are cancelling under, there are a few ways to make the most out of the situation.
1. Offer a credit
When a guest needs to cancel their booking, start by offering a refund to a gift certificate. More often than not, guests will be thrilled to receive a full credit to use toward a future experience at your business and most importantly, you retain that revenue.
Depending on your cancellation policy, the offer of credit can also be a welcome relief for a disappointed guest. For instance, perhaps a guest is no longer eligible for a refund because they’ve missed the cancellation deadline. Your offer to grant them a refund to a gift certificate instead is then a good-faith gesture that keeps everyone happy.
2. Keep in touch
One of the best ways to stay engaged is to reconnect with guests after they’ve cancelled their bookings. After all, they were interested enough in your business to book in the first place!
Keep a contact list of guests who have cancelled and reach out to those who haven’t yet rebooked. Encourage them to rebook their experience and consider including an incentive to sweeten the deal. Offering an exclusive promo code when you follow up via email or SMS is a smart strategy.
When you make an effort to maintain connections with your guests, it makes them feel valued. The more thoughtful you are about how you can encourage guests to return, the more fruitful those efforts can be!
How to manage cancellations on the business side
There are several reasons you may need to cancel on your guests. Bad weather may make it unsafe for boat tours or rentals. Public safety measures may restrict your tour group size. Whatever the case, it’s worth being prepared to cancel or modify your guests’ bookings.
So how do you cancel while still providing a wonderful guest experience? There are a few things you can do before, during, and after the booking process to handle cancellations with care.
1. Keep guests informed
Above all else, keep your guests updated every step of the way. This starts with outlining your cancellation policy from the very beginning. From there, keep on top of any factors impacting your tours, such as weather or travel advisories.
If you expect that you may have to cancel, communicate this to your guests as soon as possible. When you do, explain the situation, and provide a timeframe for when you will confirm whether you are moving forward with the cancellation.
Checkfront makes this an easy task by allowing you to send bulk communications. Simply draft the notification, select the affected bookings, and send!
2. Give guests a reason to rebook with you soon
Offering your guests something special is a great way to apologize for a cancellation and provide them with a consolation prize that prompts them to rebook with you. Get creative with your incentive—there are no limitations!
Rather than a full refund, for instance, ask if your guest would like to receive a refund to a gift certificate which comes with a variety of possible bonus incentives. These could include and are not limited to:
- An added credit, like an additional $50—or amount of your choice—for the guest to use however they wish
- A discounted rate on their next excursion
- Another rental/activity/service free of charge
- Referral discounts they can share with friends
Making your refund to gift certificate option the more attractive choice for guests you cancel on is one way you can strive to retain your lost revenue. To choose the right incentive for your guests, reflect on what would best encourage them to rebook and how to reassure them that they’ll have a stellar experience upon their return.
3. Partner with other local businesses
A creative way to find support with cancellations is to partner with other local business owners in your area. Not only will you be strengthening your local community spirit, but it also helps increase business on all sides.
You could partner with fellow experience providers, nearby accommodations or even a local restaurant. Perhaps the diners at the restaurant get a coupon for an experience with your company and vice versa. These coupons help drive traffic to both businesses from guests who may not have known about them. Diners could be mulling over what activity to do the following day, receive your coupon, and then book a tour.
In the case of last-minute cancellations on your part, your guests still have an alternative activity to enjoy. Since it’s a two-way street, you’ll also receive referral bookings from your partner’s guests if and when they experience cancellations, or your coupon code is simply too irresistible to ignore!
Cancellations are an inevitable part of any tour operator’s business. Taking preventative steps will help reduce their occurrence, and learning how to manage them smoothly is critical to recouping your business losses.
Looking for an online booking platform that will help you manage cancellations with ease? Try Checkfront for yourself!
For more helpful business tips and booking strategies, subscribe to the Checkfront Newsletter.