3 STRATEGIES TO REDUCE !HOTEL CANCELLATION RATES

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HOTEL CANCELLATIONS ARE TURNING INTO! A COMMON WORLD-WIDE TACTICReasons for cancellation policy abuse:-!Visa application: Cancel once the visa application is approved-!Last minute rate drops: Cancel all but one with the lowest rate

Consequences of increased cancellation rate-!Expected revenue stream fluctuation !-! Inventory management mess forcing!"overbooking" tactics!

-!Disrupted rates optimization!

Cancellations are more common with OTA bookings

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Cancellation Rates by Channels

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SOLUTIONS TO TACKLE HIGH HOTEL CANCELLATION RATES•!STRUCTURAL!•!INFLUENTIAL!•!CX (CUSTOMER EXPERIENCE) ORIENTED!

STRATEGY #1: STRUCTURAL

Rates types (refundable vs. non-refundable)!

•!1st night deposit on 3rd party websites !•!Offer only non-refundable rates on 3rd party sites!

•!Adjust the cancellation policies for each booking channel depending on its cancellation rate!

Strategy #1: Structural

STRATEGY #2: INFLUENCIAL

Cookies and Stories

Advertising platforms use Internet Cookies-based technology to present your advertisement to users that have clicked on your site, while they are browsing other websites. !

This is commonly known as remarketing . The format is an engaging micro-content post in the form of a story, instead of an alienating big old banner ad like it used to be!

Strategy #2: Influencial

Professor Robert Cialdini, a world famous psychologist who specializes in researching persuasion tactics for marketing and advertising refers to key principles that can be applied to remarketing campaigns on social networks. !Influence guests to respect their reservations

Strategy #2: Influencial

Cialdini Principle #1 – LikingRun ads with a more intimate creative copy that makes the hotel more familiar and likable.

Cialdini Principle #2 – ReciprocityOffer coupons for nearby restaurants or attractions to incentivize early bookers to stay at the hotel. Giving something at an unexpected good value will motivate the guests to give back by staying at your hotel.

STRATEGY #3: CX ORIENTED

Survive financially while strengthening your cash flow, but also provide a better customer experience

provides simple cancellation protection for hotels as well as for travelers

•!When offering a non-refundable rate, your guests receive the opportunity to pay a small commission of the price per night. Then in case of cancellation for any reason, they receive 80% of the money back.!

•!Not only does Life Happens refund the guests, but it also splits the revenue of the commission with the hotel. This will actually increase your hotel s revenue per available room.!

Strategy #3: Customer Experience Oriented

SUMMARY

Reduce hotel cancellation ratesOffer more non-refundable reservationsKeep your guests happy.

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