How to reduce booking cancellation and drive direct bookings

A study conducted by property management systems (PMS) provider Guestline has revealed insights on how hoteliers can avoid booking cancellation. The survey amongst 2,000 participants delved into how people book their hotels, and more importantly, their main priorities and desires when choosing one.

According to data, almost 40% of all hotel booking in Europe were cancelled last year. Furthermore, analysis of over seven million hotel booking data processed through property management systems between April 2018 and March 2019 shows: 19% of hotel bookings through the major booking portals (OTAs) have been cancelled.

So, how can hoteliers reduce booking cancellations and increase direct bookings?

Stay flexible with free cancellation options

‘Free cancellation’ is a growing trend for guests when choosing where to stay. It was found that 35% of people believed it to be vital to have a free cancellation option. 37% said that it is important to them as they like to keep their options open and have the ability to compare offers.

This indicates another reason why price incentive is a huge player in securing a full payment booking from guests. Surprisingly, 19% of people would pay extra to have a free cancellation option (up to one day before arrival), something to be mindful of if you are a small hotelier that relies on full payment at the booking stage.

Keep your booking journey customised

Hotels might struggle to provide such last-minute cancellation policies, therefore, maximising retention of their bookings and reducing cancellation can be utilised in other aspects of the hotels booking process.

Having the option to customise your stay provides guests with a personalised experience and feel more valued as a customer. Over half of people would like to be asked by their hotel if they have any special requests before confirming with their hotel which infers the need to tailor the booking process to be more particular to each guest.

The top five priorities people considered when choosing their hotel are hotel location (74%), hotel reviews (54%), hotel with free cancellations (42%), safety of online card payments (38%) and website quality (26%).