Short of leaving a traveler behind, cancellations might be a travel planner’s worst nightmare.
But it’s something that’s likely to happen frequently in the travel business. While some customers are simply inconsiderate, there are many good reasons for travelers to cancel on you, from family emergencies to unexpected illnesses. Still, that doesn’t change the fact that you need to meet your bottom line to make your trips profitable.
Developing a plan to deal with cancellations in a way that’s both efficient and gives your travelers grace is a crucial part of your business strategy. Here are five tips.
1. Clearly communicate your policies
A clear cancellation policy may be your best defense against frequent cancellations because it lets potential customers know that booking with you is a serious commitment of their time and money. Whenever customers are ready to book and pay for a product, make sure they acknowledge that they have read your cancellation policy regarding refunds. This could be as simple as having them check a box stating they have read the policy before they can move onto the payment screen. Make sure to provide them with a copy of this policy upon booking. That way, there won’t be any confusion later, and you’ll have the agreement in writing — for both you and your client to reference.
2. Have tiered deadlines
The closer you get to your trip, the harder it will be to make up for lost funds when a traveler cancels. That’s because six months to a year out, you have fewer reservations booked and fewer deposits paid than you do in the days leading up to the trip. It’s extremely disruptive to have to change headcounts and deal with refunds two days before the start of your trip. To ensure this doesn’t happen, used tiered deadlines with different penalties for cancellation as the trip date approaches. That might look like giving clients a 50% refund on what they’ve already paid if they cancel six months out, versus not refunding your clients if they cancel the day before. Make these tiers extremely clear when travelers are booking so you don’t come up short when paying for lodging, transportation or attractions up front.
3. Pick the right vendors
Most groups don’t cancel outright — they just shrink, with a few people dropping out here and there as the trip approaches. That’s why it’s important to pick vendors with flexible attrition policies. If you book a block of 40 hotel rooms and only 30 people come, you might still end up owing the difference. If you’re a frequent customer at the hotel, or if their attrition policy is more forgiving, they might cut you a break on your contract. No matter which vendors you end up selecting, make sure you’re aware of their stance on attrition.
4. Know when to bend
Sometimes, life gets in the way. A sudden medical event, unexpected weather or any other unforeseen circumstance can lead a traveler to cancel. Talk to your customer about what they’re experiencing to get a sense of whether this was simply bad luck — something completely out of their control — or if they were negligent when planning their trip. Depending on the circumstances, it could be a golden opportunity to show your client some grace and embody the humanity of the travel industry. If it’s truly too late to give them any sort of refund, see if offering a credit for your travelers to book with you in the future would do.
4. Recommend travel insurance
Fortunately, travel insurance covers many of the unforeseen scenarios that are out of a traveler’s control. Many policies have contingencies for illness, accidents or other obstacles that frequently lead to cancellations. Some policies even come with a “cancel for any reason” option, which ensures the most protection for travelers. That’s why it’s extremely important to educate your travelers on purchasing travel insurance for their trip. If there’s any factor in their life that might qualify as a contingency they need to prepare for — a chronic illness, a sick family member or an unpredictable schedule for other reasons — encourage them to look for cancel for any reason coverage to make sure everyone involved is protected.
