Whenever a booking is made, the guest, customer or intermediary should be clear about the cancellation policy associated with the booking. Transparent communication before and during the booking, in the booking engine and the confirmation saves disappointment and helps to enforce justified cancellation costs. Therefore, cancellation rules do not belong in the general terms and conditions but in the offers and confirmations. In the GTC, the following sentence is sufficient. “Should a cancellation free of charge be possible after booking, this will be communicated at the time of booking”.
Last cancellation free of charge at 16.00 or 18.00 on the day of arrival.
This very customer-friendly rule is becoming increasingly rare. Because often the booked rooms are taken weeks or even months out of the distribution and if then on the day of arrival the cancellation is communicated, it is usually no longer possible to find another guest for the vacated room. The hotel had the work, kept the room free and receives no compensation.
Last cancellation free of charge at 6.00 p.m. the day before arrival.
This is another particularly customer-friendly rule that is being applied more and more frequently by city and business hotels. It can be assumed that business travellers who need flexibility also know on the day before their arrival whether the trip will be carried out and the stay realised. If the guest cancels with this rule, the hotel has 24 hours to resell the room.
Last cancellation free of charge 7 days, 30 days or 3 months of arrival.
These rules can be found in city hotels for discounted offers for tourist guests or in holiday hotels for all rates. Basically, the higher the demand (or the better the booking situation) the longer the cancellation period should be. This is because a short-term cancellation that cannot be resold hurts especially in times when sales have to be brought in.
Once a booking has been made, cancellation is no longer possible free of charge (usually in combination with staggered cancellation fees).
If a hotel applies this rule as standard, it closes itself to the guest segments that need a little more flexibility. Therefore, this rule is rather an alternative in combination with a discounted price, e.g. the early booking rate. In this way, the guest exchanges a discount for limited flexibility. A higher price (the normal price) then offers a little more flexibility.
Since many rooms and, if applicable, event rooms are usually blocked for other interested parties after a booking, a graduation according to the size/turnover of the group or event is a good idea. It is important to note that free cancellation is no longer possible as soon as the peak demand period for this type of travel begins. So if large weddings are booked a year in advance of the event, then the last, no-cost cancellation date should be a year before. Nothing is more expensive than having to turn down requests due to capacity and then later receiving cancellations for those dates for which you receive no compensation.
A typical cancellation rule for meetings might look like this:
Booked revenue | Last, free cancellation date:
1000 € – 21 days before event
1001 to 3,000 € – 45 days before event
3001 to 5,000 € – 90 days before event
5001 to 10,000 € – 120 days before event
Over 10,001 € – 180 days before event
(Turnover = all services for rooms, food & beverages, room hire, technical equipment, supporting programme)
In the event of late cancellation, the following cancellation fees will be charged as a percentage of the booked or expected turnover:
180 to 90 days prior to the event: 15 % ‘.
89 days to 22 days before the event: 50% |
21 days to 4 days before event: 75% |
From 3 days before the event: 90%
Copyrights © 2023 RHC Real Hotel Controlling. All Rights reserved.