Reduce Cancellations by Catering to Guest Priorities, Getting them to Book Direct
Last year, a European wide study uncovered that almost 40% of all hotel booking in Europe were cancelled by guests1, prevailing the growing attention needed on customers attitudes to booking.
Technology has become the forefront of how guests book their hotel and experience their customer journey, in fact a recent study conducted by Guestline revealed that 100% of people use or have used the internet to book their hotels.
The study of 2,000 UK participants delved into how people book their hotels and their main priorities and desires when choosing one.
In addition, a worldwide data analysis of more than 7 million hotel booking data processed through property management systems (PMS) between April 2018 and March 2019 shows: 19 percent of hotel bookings through the major booking portals (OTAs) have been cancelled*. On the other hand, only 0.43 per cent of direct bookings were cancelled, making it evident how direct bookings minimize cancellation risk.
Yet, with the likes of Booking.com and Expedia offering flexible cancellation arrangements, there’s no surprise that expectations have risen for all hoteliers to offer booking cancellation options on their site, as it has become the norm for consumers.
The biggest question hoteliers want answered is how can they reduce their booking cancellations and increase their direct bookings?
Customers' attitudes to booking a hotel have become more personalized
Keeping ahead of the game as a hotelier means knowing what guests want most from their experience. Over half of the respondents in the study (65%) said they would like to have the option to add food & drink extras to their room on arrival, with 45% of people wanting up to date technology devices in the room.
It will come as no surprise that over a third of people are led by price incentives and usually book the lowest rate they can find, even if it is non-refundable, reiterating that pricing needs to stay competitive within its range.
It was also revealed that 37% of people cancel their hotels because they have found a better offer elsewhere, confirming that a portion of people are considering this to be a big decision-making factor when booking their stay.
Below are the top 5 priorities people considered when choosing their hotel:
|
Rank |
Decision making factor |
Percentage of people |
|
1 |
Hotel Location |
74% |
|
2 |
Hotel Reviews e.g. TripAdvisor |
54% |
|
3 |
Hotel with Free Cancellations |
42% |
|
4 |
Safety of online card payments |
38% |
|
5 |
Website quality i.e. modern, HQ photos |
26% |
A hotel’s location was found to be the top decision-making factor with 74% considering this as the primary thought when choosing a hotel. Interestingly over third of people found flexible cancellation equally as important as the hotel facilities, strengthening the importance of allowing guests to stay flexible with their booking options.
The safety and security of card details and paying online also sat within the top five priorities for guests, this came out higher than the quality of the website - such as design, navigation and picture quality. With 38% of people finding this the fourth biggest priority when booking their hotel, it is essential to provide strong payment and booking processes which have reliable security measures which are seamless and efficient.
Stay Flexible with Free Cancellation options
Free cancellation provided by hotels is a growing trend which is becoming a desirable option 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, otherwise they would be tempted to book elsewhere.
The question is, why do guests rely on a free cancellation so much? 37% said that it is important to them as they like to keep their options open and have the ability compare offers and then choose the best one, in case a better rate crops up elsewhere.
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 customized
Hotels might struggle to provide such last-minute cancellation policies and therefore maximizing retention of their bookings and reducing cancellation can be utilized in other aspects of the hotels booking process.
Having the option to customize your stay provides guests with a personalized 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.
It was also found that the option of adding ‘free fruit and water’ as an extra to the booking process was of interest to the majority (62%) of people, showing a little goes a long way.
These small features you can add onto the customers booking journey can be the difference between guests choosing a direct booking with your site rather than through OTA’s.
* Data source: Guestline property management systems
Referenced Sources
Booking Attitudes Study
The study on hotel booking and cancellation attitudes was taken by 2,000 UK participants to engage and better understand guests’ preferences to booking a hotel and their current demands.