Last-minute cancellations and no-shows are inevitable and part of any tourism business. But if you are a small tour operator these situations can make or break a tour, and ultimately impact your revenue.
Facing last-minute cancellations and no-shows often is a sign that you should work on your cancellation policy and implement actions to increase customer and revenue retention.
In this post, we will give you tips and show strategies to reduce the negative impacts of last-minute booking cancellations for tours and activities.
A canceled booking or a no-show is something that every tour operator tries to avoid to the maximum. The reasons are many:
Good business management and efficient communication between the company and guests can reduce cancellations. But there are situations that you or your guests can’t control, such as a canceled flight, illness, or bad weather.
In any case, you should be ready to provide full assistance to your customers and make sure the losses of a last-minute cancellation will have the least impact on your business.
Moreover, good crisis management can revert a bad experience into a new booking for your business. The first step to deal with cancelations is to implement a cancellation policy.
The cancellation policy is a document containing the rules, obligations, and rights of customers and the company in the event of a booking cancellation.
A good cancellation policy is not too strict which will prevent future bookings, and is not too lenient to result in revenue loss for your business. It should cover all possible situations that might lead to a canceled booking, such as bad weather, illness, canceled flights, and any other unforeseen events.
The main points you should cover in your cancelation policy are:
Keep in mind that after the pandemic many travelers choose to book with companies that offer a flexible cancellation policy.
According to Amadeus’s research, a flexible cancellation policy is one of the factors expected to boost travel in the future.
A booking is canceled:
The actions needed to prevent or manage a last-minute cancellation are different depending on the side that took the initiative.
Now that you know in which situations a book is canceled, let’s check what can be done to prevent this situation.
As mentioned before in this article, your guests will cancel a booking last minute soon or later, it’s inevitable. But don’t worry, there are actions you can take to prevent it or make it less likely to happen.
Guests who book a tour during the planning phase of their buying journey, or who book just to hold a place in your tour are not fully committed to attending it, and chances are they will cancel the booking last minute.
Asking for a deposit during the booking process is a good strategy to prevent this type of guest from making a reservation. The amount for the deposit can be a percentage of the tour or a flat rate.
For example, to book a helicopter tour you can ask your guests to pay a 20% non-refundable fee in advance.
Good communication between your company and your guests can help in preventing last-minute cancellations.
It’s a good practice to schedule email reminders leading up to their tour date. This way your guests will be notified about the tour details at the same time they will have a chance to make any changes to their reservation before the tour.
A booking software like Orioly allows you to automate your communication with your guests. This saves you time in sending emails manually at the same time helps you secure your bookings.
In many situations, your guests will prefer to reschedule a tour instead of canceling it, if they have the option to do so.
You can add this option in an email reminder or ask them to contact customer support if necessary. Usually, the changes they need to make are in the number of guests, departure time, or tour type.
Depending on your business model, you can limit their ability to change a reservation up to X days of the tour. This way you have time to fill the empty seats and confirm any changes they request.
Bad weather, a sick guide, or an emergency might result in a canceled tour on the company side. But in most situations, good planning is enough to prevent it.
Let’s check what tour operators can do to avoid last-minute cancellations.
During high season you can easily lose control over your resources due to the amount of work and extra departures.
Without good resource management, you can end up canceling a tour because you don’t have the necessary equipment or staff available for a specific departure.
For example, during high season if you decide to open extra departures for your walking tours but you don’t have control over the availability of your guides, you risk lacking personnel to run your tours and ultimately canceling some of these departures.
Orioly comes with a resource manager to assist you in controlling your resources availability. This tool helps you in allocating guides, gear, and other equipment necessary to run your tours by automatically updating their availability when a tour is booked.
It is normal for your guests to have doubts about your products such as: where is the meeting point, what to bring for a specific tour, what to wear, what is the cancelation policy, or any other relevant information.
If they notice that your company is not giving them the necessary assistance or addressing their insecurities, they might cancel the booking.
For this reason, you should always keep an open channel to communicate with your customers. It could be via email, live chat, or WhatsApp. Great customer service is fundamental.
A website that is easy to navigate and contains all the important information about your services, such as your cancelation policy, is also necessary to improve the confidence of your guests in your services.
A well-trained team is ready to handle unexpected situations that can lead to cancellations, turning them into opportunities for your business.
For example, if you offer outdoor tours, your guides should be ready to provide a weather contingency plan in case of bad weather on the day of the departure. That could be an alternative experience or inviting guests to reschedule the tour.
It’s also important that your team is aware of customer feedback. Understanding why customers cancel can help them make necessary improvements to offer better tours and services.
Working on a prevention plan is key to reducing last-minute cancellations. But regardless of how good is your strategy, it’s very likely your guests will cancel a tour once and another.
When it happens, the way you manage these last-minute cancellations is decisive in increasing customer satisfaction and securing your revenue.
When a guest requests to cancel a tour for any reason, you can try to offer some kind of benefit or to reschedule it before proceeding with the refund.
Your first attempt when a guest requests a cancelation is to offer a voucher for them to use in the future.
Sometimes, they cancel because of unforeseen circumstances but they still wish to experience your tour. In this case, they are likely to accept the voucher and give up on the refund.
If your guest is canceling the tour because of a company mistake, it’s a good idea to offer a gift card with an upgrade. This could be one of your premium experiences, a private tour, or a special add-on.
This gesture shows that you value your customers and can ultimately turn a delicate situation into an opportunity to revert the bad impression they have about your business.
Not everything is lost after a last-minute cancelation. If you have permission to contact the guests after they have canceled a tour, in a few months you can send them an email asking for a rebook or even offering a promo code as an extra incentive.
If they have canceled against their will, there is a good chance they will book the tour with you the next time they visit your destination.
If the cancelation comes from your side, these are some actions you can take.
The first thing you should do when one of your tours is canceled is to explain to your guests why that happened.
Do that as soon as possible to avoid people arriving at the meeting point and waiting for a tour that is not going to happen.
Once your guests are informed that the tour was canceled and the reason why, proceed with the refunds or offer them compensation.
Instead of a full refund, first, check if your guests are up to reschedule the tour for free. Alternatively, you can offer them a gift certificate, a tour upgrade, or an extra seat for a companion for another tour.
If you have a partnership with other operators, you can try to negotiate a seat on one of their tours for the affected guests. If you have other types of partners such as hotels, restaurants, or attractions, you can also check with them about the possibility of offering a voucher to these guests.
Last-minute cancellations are undesirable but inevitable. Luckily, you can reduce the number of cancellations by implementing a cancellation policy and having good communication with your customers.
But when a guest requests to cancel a booking, the best approach is to manage the crisis and make the most out of it. Try to always compensate your guests so they don’t feel hurt by the company and might book a tour with you in the future.
Orioly is an online booking software that has tools that help you manage your bookings, customers, departures, and resources. Get started with Orioly to improve your guests’ booking experience and avoid last-minute cancellations.
ORIOLY
on September 8, 2023
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