Cancelling the cancellation effect: How hoteliers can undo the impact of personal unforeseen cancellations

03 Nov '23 2 (LI) (1)

Cancellations can hit a hotel's bottom line hard. When a guest cancels a reservation because of a personal unforeseen reason preventing them from attending their booking, the hotel not only loses out on revenue, but the now empty room goes from being profit-generating to loss-incurring. Fixed costs like staff salaries, utility bills, and maintenance expenses do not disappear just because a room is not being used. Furthermore, cancellations can negatively impact a hotel’s ranking among online travel agents (OTAs) resulting in even fewer bookings. With the local tourism industry currently experiencing strong growth, it is important to remember that not long ago, pandemic-induced cancellations brought the industry to its knees. Fortunately, with the right technology solutions, South African hoteliers are now in a better position to protect their profits and keep the industry healthy.

Fixing old problems with new solutions:

While the pandemic may be the most glaring example of how cancellations can cripple the industry, new advances in technology now allow hotels to protect their revenue streams while also giving guests the peace of mind of being able to plan their trip knowing that they can get their money back should something go wrong.

Refundable Bookings administered by companies like Protect Group are able to help hoteliers offer a wide range of enhanced refund conditions to guests without any risk to their revenue, and in turn, are able to safeguard parties on both ends of the transaction and turn non-refundable bookings into fully refundable bookings while ensuring that the hotel keeps 100% of its revenue.

Cagdas Duran, Protect Group’s Head of Sales Middle East and Africa says, “By leveraging cutting-edge digital platforms across a variety of industries as well as being powered by AI technology, we’ve been able to provide a highly customer-centric and personalised experience to customers of some of the world’s leading travel brands. Personal cancellations by guests have become a common occurrence, our partnership with Profitroom aims to provide a comprehensive solution that not only addresses their impact on the industry but also empowers hotels to safeguard their revenue streams. Additionally, our partnership is a testament to our commitment to support the hospitality industry and accelerate growth in the sector.

Breaking the reliance on OTAs:

Personal unforeseen cancellations have often wreaked havoc on a hotel’s OTA rankings. The more cancellations, the lower the ranking, resulting in fewer bookings. But what if a hotel didn’t have to rely on OTA rankings as much? Innovative booking solutions platforms have allowed hoteliers to drive up their direct bookings considerably, eliminating the dependence on a 3rd party ranking system.

Michael Puffett, Senior Business Development Manager at Profitroom, says, “Hoteliers often think that they need OTAs, and nothing could be further from the truth. By prioritising direct bookings, hotels can save a fortune in commissions and not be held to rankings systems they have no control over.”

Through a specialised Booking Engine, website development, and marketing automation, companies like Profitroom can cut out the middleman altogether. When they partner with services like Refundable Bookings, the result is an ecosystem that prioritises the gains the tourism industry is currently making. 

Cancellations can have serious effects on both hotels and the tourism industry but thanks to technology and collaboration, its impact can be blunted and hoteliers throughout the country can continue to ride the wave.

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Jane Young, Marketing Manager