Booking.com Cancellation Policies | The Ultimate Guide

Booking.com is one of the largest travel marketplaces in the world and caters to established brands as well as small and medium-scale vacation rental owners. Its origins lie in Amsterdam as a small startup when Geert-Jan Bruinsma founded Booking.nl after spotting a gap in the hotel booking market. In 2005, Priceline Group (now Booking Holdings) merged their new acquisitions Booking.nl and Active Hotels to create Booking.com. Booking.com quickly took off among consumers, with its lower prices, formidable search engine, online advertising, and allowing customers to pay on the spot. It also made a name for itself by offering cancellation policies that allowed guests to cancel without penalty even a few hours before check-in. Since then however, as it has grown into a top 5 OTA in the world with over 28 million listings in 226 countries and territories, its cancellations policy has grown to incorporate more variety.

Why Are Cancellation Policies Important?

The cancellation policies you set up for your vacation rental on Booking.com impacts the chances of guests picking your listing and thus growing your occupancy and revenue. This is even more important if you have only just started your vacation rental business. A flexible cancellation policy will make you more attractive to guests as they won’t lose out if they cancel. It also means you will lose revenue if you are unable to find a replacement booking, especially if the guest cancels quite close to the intended date of booking. A strict cancellation policy on the other hand will make guests hesitate to book your vacation rental.

A flexible cancellation policy is best if your property is in a competitive location, it’s off-season and you have confidence in finding a replacement in the case of a cancellation. A firm policy on the other hand is better suited for when your location and space are in great demand. You can also offer a mix of rates including both flexible and strict cancellation policies to attract different types of guests.

You can check out our guide to optimizing your listing on booking.com for these and more great tips.

Can You Prevent Cancellations?

Nothing is certain in life and cancellations are an unavoidable aspect of hospitality. No matter how much effort and thought guests have put in to plan their trip, blocking out dates well in advance, checking the weather forecast, etc, there is always the possibility of an unexpected event like a snowstorm, a personal emergency, or a global pandemic that can force guests to cancel their bookings. Running a vacation rental and being a part of the hospitality industry requires you to accept this fact and prepare for it.

Setting up cancellation policies including prepayments and deposits that suit your property, unit, the season, length of stay, etc will help guests plan better and avoid surprises so you are less likely to experience cancellations and miss out on revenue.

Cancellation For Hosts On Booking.com

Unlike Airbnb and VRBO, which have straightforward cancellation policies with clearly stated terms for hosts to choose from, Booking.com gives hosts the ability to configure their own preferred policies, as well as terms for prepayments and deposits.

Cancellation

You can choose between a fully flexible or a customized policy, or apply different policies for different units within your vacation rental.

• A fully flexible policy allows guests to cancel right until the designated check-in time for free

• The customized policy allows hosts to choose the number of days before check-in when guests can cancel without incurring charges, incurring a partial fee, or the full amount. Hosts can also choose to offer non-refundable rates where guests won’t receive a refund if they cancel.

Deposits & prepayments

Cancellation policies can go hand in hand with Booking.com’s deposit and prepayment policies.

• Deposit When hosts choose to require a deposit, guests are expected to pay a certain amount upfront, which is refunded if they cancel within the free or flexible cancellation period. Guests will lose the deposit however if they cancel after that point.

• Prepayment When hosts choose prepayment, guests are charged a part of the total reservation amount (usually the first-night cost) when making the booking. Depending on the level of flexibility of the cancellation policy chosen by the host, guests can lose the full amount or part of the amount if they cancel.

• Pre-authorization This is when the host holds a certain amount to ensure the card used by the guest to make the booking is valid. Hosts can choose to continue to hold this amount to use as a guarantee in case the guest doesn’t turn up.

Choosing the right mix of cancellation policies for your vacation rental business ensures

• You reduce the likelihood of cancellation
• You are covered in case a guest cancels
• You manage guest expectations preventing negative comments

Risk-Free Reservations On Booking.com

When you opt in to the Risk-Free Reservations program on Booking.com, it upgrades some of your policies to offer free cancellation or extend the period where free cancellation is valid. Booking.com uses its demand data on a daily basis to determine when and to whom to offer a flexible cancellation policy, improving your chances of being booked while reducing your chances of cancellation. Risk-Free reservations turn up with a Risk-Free tag on your reservations page.

If your Risk-Free Reservations guest cancels their booking, Booking.com will start searching for a replacement guest/s – depending on the period of stay booked – immediately. Booking.com may also boost your ranking or offer price incentives to make your listing more attractive to travelers but won’t charge you for any additional costs involved. In the case Booking.com is unable to find a replacement, it will compensate you based on the original policy that applied. If however the guest cancels during your own original free cancellation policy period, then Booking.com won’t take responsibility for looking for a replacement.

According to Booking.com, enrolled hosts experience up to 3% more conversions from looking to booking, and sell nearly 30% more room nights.

Key Takeaway

Cancellation policies have a significant impact on your vacation rental business on Booking.com so choosing the right policies for you is important. Take into consideration the full range of aspects of your business including type of property, location, season, day of the week, length of stay, traveler profile you are trying to attract, etc to determine the best-fit cancellation policies for your vacation rental.