For property owners who delve into the rental niche, it is a headache to deal with rental cancellation. Both guests and proprietors are negatively affected by this situation, but there are some circumstances where it cannot be helped. For example, the recent pandemic has brought a slew of cancellations, especially during the summer holidays.
According to PriceLabs, vacation rental bookings have gone down to 80% in 2020. As of March, hotel occupancy sat at 22%, a low number compared to the astounding 80% in March 2019.
Amid travel restrictions and border closures, the rental industry saw a standstill, which has brought added stress to owners. Here are some of the reasons why cancellations are bad to any rental business.
- They are expensive
- It is a waste
- A rental cancellation stains your brand
- Your listing position could drop
- It affects customer relations
- Losing guests
- It messes up your calendar
- Reducing Cancellations
They are expensive
Canceling bookings through a website can be costly and these fees are typically shouldered by the owner. Payments like administration costs and cancellation fees can be significant, depending on the platform used. Proprietors have no choice but to pay to ensure continued service. However, it will hurt your bottom line, especially if you have not been in the business for long, so be sure to increase your budget for unforeseen cancellations.
Guests will also likely lose money in the process, given that they may have already spent funds for their travel tickets, dining arrangements, and other related expenses. They could have also taken the time off already, not knowing that their plans will not push through, so be gracious—this is hard on everybody!
It is a waste
In business, time is money—which means that a rental cancellation is time and money wasted. When a booking is canceled you might have trouble securing another booking for those previously scheduled dates. It takes the concentration away from filling the other weeks that are yet to be booked.
Additionally, your guests would have to deal with the waste of time since they might have to start the process of booking over again. Some travelers take months and even years to plan a trip, and an unprecedented circumstance could waste the effort they put into the planning.
A rental cancellation stains your brand
As a rental property owner, you are already privy to the stiff in the market. It is crucial to build a brand that guests can trust—the moment they hear your name they already know they get the best service. However, canceled bookings take a swipe at your reputation.
Frustrated customers who have had their travel plans canceled often go on social media to rant. Social platforms are powerful these days that users have come to rely on consumer reviews and base their travel decisions on them. If your brand receives backlash after a rental cancellation, it can reflect poorly not only your business but also the whole industry.
Your listing position could drop
You need to be particular about your position in listing platforms because the higher you place on the ranked searches the more potential customers you can attract. Sadly, a canceled booking could pull your ranking down. It is hard to secure a top position if most of your rental bookings do not come through, because there will not be enough reviews and recommendations for your business.
Also, you could be missing out on awards and marketing extras if you get more cancellations than successful bookings. There are a lot of perks for rental proprietors, but a lot of these opportunities go down the drain if your brand is not performing satisfactorily in the listing market.
It affects customer relations
Even if your business enjoys a significant following from previous guests who love your property, they will likely be disappointed if they come across a rental cancellation that is beyond their control. Their trust could go down once that happens, which can also affect the other relationships you have established with other guests.
The key to a successful rental business is to nurture guest relations, be them new or returning customers. They want to receive the best treatment when renting even before they reach the property itself. If you cannot give it to them, you are also risking your good reputation with your most loyal guests.
The most obvious reason forcanceling reservations is that you could be losing old or potential customers in the process. Always think that your next guest could be reading your listing and if they see canceled bookings it will not bode well for you. Your client’s satisfaction rate could also suffer as a result.
Alternative accommodations are popping up everywhere, and there could be one just a few blocks away from yours. It is easy for customers to choose the next available option to keep their travel plans intact. That means losing your guests in the process, which is a gain for your competitor.
It messes up your calendar
Every rental property owner should keep a clear and accurate calendar that details all the bookings. However, if you initiate several cancellations, there is a high chance that you are also disorganizing the availability on your calendar. It could cause confusion on your end and add more trouble when it comes to specifying the availability of the property on the client’s chosen dates.
Another potential issue arising from a muddled calendar is double booking. You could be reserving two separate guests on the same day, which could lead to dismay and dissatisfaction on the customer’s part.
If you want to keep a positive image for your brand, you must serve the interests of your customers, which means you must avoid unnecessary cancellations as much as you can. Here are some tips to reduce canceled bookings and keeping your customers happy.
1. Clearly explain booking rules and restrictions
Some rental cancellations occur because there has been miscommunication on the do’s and don’ts for your rental property. Listing platforms like Rental Trader allow owners to post policies and FAQs after a simple signup process to ensure that anyone who clicks on your property will know if they agree with the rules and regulations you set.
For instance, if they are traveling with a pet but you do not allow for pets on your property, it should be stated clearly on your listing.
2. Arrange your calendar accurately
Accuracy cannot be underestimated when it comes to rentals. You need to avoid double-booking and make sure that when you say the dates are available, then they truly are. If there are any changes to reservations, do not delay in marking them immediately on your calendar.
There are also syncing utilities available for use to make it easier for you to keep track of changes to your rental calendar. It automatically makes changes across platforms and devices so that you do not have to manually set it on the different calendars you are organizing.
3. Communicate effectively
Guests and owners often have misunderstandings because there is no clear line of communication between the two. As a proprietor, you have to provide the guest with a way to contact you so that they can discuss any concerns or questions. Some clients want to know more about the property, and if you want them to choose your rental, you ought to be accommodating of their requests as long as they are reasonable.
4. Update your listings
Canceled reservations could happen because the information on your listing is outdated or has not been updated in a while. For example, the recent pandemic could have caused you to modify or add points to your policies, and these changes need to be reflected on your listings.
5. Send your cancellation policy
Here is one crucial tip: send your rental’s cancellation policy before and after the customer books your property. It will reduce unnecessary cancellations since they are informed twice regarding the salient points of reserving your property.
If you have no choice but to cancel a booking, it is better to contact the guest yourself rather than wait for the system to process the decline automatically, which could take a while. It does not necessarily have to be a phone call—you can send an email or a note that clearly explains why their booking was called off. If they insist on a call to discuss, provide honest answers and understand that just being informed about the cancellation is already a hassle to them.
It is important to decline politely and provide the reason for the cancellation. That way, you likely will not be losing a customer and still have them re-book with you. Customers are vital to any business, and as such need to be taken care of and treated amicably and fairly.
Your rental business will have its ups and downs, and rental cancellation is one of them. Life throws curveballs from time to time, but that does not mean there are no solutions every time you encounter this problem.
For property owners, our platform Rental Trader can guide you in optimizing your listing to attract more customers. Our platform has an easy signup process and a web contact form that you can fill out conveniently for any inquiries. You can also call us anytime for any assistance and we will get back to you in no time!