When you own vacation holiday rentals, there are many advantages attached to it. However, there are some problems that might arise, like any other business. One such problem which has been vexing the owners is the problem of cancellation. People tend to book vacation holiday rentals in speculations, and then cancel them later, which causes a huge loss to the owners since the property appears unavailable for a long period of time, which could have been potentially booked by a genuine tenant.
Usually, many websites and vacation holiday rentals have the policy of no-cancellation or cancellation fees. This depends from person to person. Usually, people prefer cheap apartments for rent and then cancel them later on due to some reason or the other without any penalty. Apart from penalizing, we have some other solutions and advice for you if you don’t want the guests to cancel rent for your property.
It is not just about the cancellation policy, in order to minimize the cancellation, you need to get inside the head of those potential customers and look from their perspective. Only then you will be able to find some solutions that work best for you. We have curated three main things that you need to look into, for maximining your revenue and minimizing losses from cancellations by guests.
- Understanding the guests
Short-term vacation holiday rentals are being preferred by people who make last-minute plans, and want to explore new options other than hotels. People sometimes also book multiple accommodations with an intention of confirming one of them when the traveling time comes near. Apart from this, family emergencies, illness, or urgent work can lead to cancellations. In order to find some concrete solutions, you can look into answering some questions such as-
- The time period between booking the property and the reserved date. The earlier the Date, the more prone it is to be canceled.
- What are the reasons for cancellation? Price changes, cheaper prices anywhere else, personal emergencies, or cancellation of the whole trip?
- Cancellations indifferent booking channels, for example, cancellations may be more on one website and less on another.
If you can answer these questions, you can identify the potential problem and solve it accordingly. If it is the booking channel, you can be more vigilant towards that one particular website. If it is the competitors, you can work on your competitiveness and amenities.
- Cancellation policy
The cancellation policy for vacation holiday rentals should be very carefully scrutinized. You cannot afford to have a very strict cancellation policy unless your business is extremely profitable. Flexible cancellation policies are better options for owners who are still in the process of establishing themselves. For example, you can set a particular amount of cancellation fees, and not 100%. Moreover, you can also set it according to the date it is being canceled on. The nearer to the scheduled arrival date, the higher the penalty, but not too much so as to discourage the customer from considering you again.
For this, you also need to have a strategy at hand which can prevent loss at last-minute booking cancellations. There are many overhead costs associated with cancellations. Identify them and see how you can decrease them to have a minimum possible loss during cancellations. Don’t try for a rigid policy, since it will give an edge to the competitors with flexible policies.
- Have an accommodative policy at hand
In order to reduce the cancellations, you need to have a broader audience on whom you can rely upon. When you restrict your guests to one or two chances, you tend to reduce the audience to which it is reachable. The best thing to do is to increase the demand for your property. Increasing demand can help you to add better and more profitable filters to your property.
Many things can be done to increase your demand, this includes providing better amenities than your competitors, increasing rates according to those amenities, setting a proper, profitable, and flexible cancellation policy, targeting the audience appropriately. A good filter added actually increases the revenue of the property owners so chose your filters and add them accordingly.
When the guests cancel rent, it becomes a big problem for the owners. The tips mentioned above are not only going to help you in decreasing the number of cancellations but also increase your market share and revenue. The key is to understand the customers and target the right ones. If you are targeting everyone you will have all types of guests including those who cancel at the last moment. A good marketing strategy plays a very important role in minimizing cancellations and increasing revenue for vacation holiday rentals these days.
