Ah, cancellations and no-shows – the bane of every hotelier’s existence. Let’s dive into the art of turning these operational headaches into manageable, and yes, even profitable situations.
NB: This is an article from Topline Revenue, one of our Expert Partners
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Understanding the Cost of Unoccupied Rooms
Before we get into the nuts and bolts, let’s lay it out: when a guest cancels last minute or doesn’t show up, it’s not just an inconvenience; it’s a direct hit to your bottom line. You’ve already committed resources in anticipation of their stay – cleaning, staffing, and maybe even turning away other potential guests. Now, it’s all dressed up with nowhere to go. Not cool, ghost guests, not cool.
The Real Price of Empty Beds
Each empty bed is a ghost guest that didn’t just forget to check-in but also decided to eat away at your profits. The costs are more than just monetary—they include potential damage to your occupancy rates and, by extension, your hotel’s market positioning.
Strategies to Reduce Cancellations and No-Shows
So, how do you keep your guests committed to their reservations? It’s less about locking the doors and more about being smart, and strategic.
Overbooking: Not Just for Airlines
Yes, overbooking can be an incredible strategy (when used correctly). Think of it as your own little insurance policy. If you understand your typical no-show rate, you can safely overbook by that percentage, especially during peak times. The key? Doing your homework and knowing your numbers.
Deposits and Prepayments
Require deposits or full prepayments at booking. This tactic changes the game by securing revenue upfront and significantly reducing the likelihood of a no-show. Guests with skin in the game are less likely to bail.
Flexible Rescheduling Policies
Offering the ability to reschedule rather than cancel can keep your revenue within the ecosystem. It’s about being accommodating while still keeping the cash in your court.
Leveraging Technology to Manage Cancellations
In the golden age of apps and automation, if you’re not using technology to plug up the holes in your bucket, you’re just collecting rainwater with a sieve.
