Guide to dealing with mass cancellations of tours & activities

Tipps & Tricks  Frank Scheibe

Cancellations are by definition bad for business, as they result in loss of revenue regardless of the cancellation conditions. At the same time, they also cause additional internal costs because they tie up your resources and, more often than not, your employees have to deal with processing them. While single or few cancellations can be handled manually, it is more difficult with larger groups. Unforeseen circumstances which result in mass cancellations either on behalf of yourself as the provider, by your customers or by intermediary players such as travel agencies or sales platforms, the situation quickly turns into an overload without the right infrastructure for all sides.

As a general rule, you cannot directly influence the triggers of mass cancellations, but you can influence the subsequent processes. Triggers can be very diverse, occur relatively unexpectedly and have an immediate effect. The bad news: They always require action on the part of the providers of activities, tours and experiences – in other words, from you! Either you must actively cancel your offer yourself or deal with frequent cancellation requests as effectively and efficiently as possible.

Examples of triggers for mass cancellations

by Tours & Activities providers

Major technical defects, e.g. due to fire and storm damage
More extensive loss of personnel, e.g. due to illness
Legal requirements and conditions, e.g. safety regulations

by customers

Natural disasters, e.g. flooding in an entire region
Travel warnings and aggravated security situation, e.g. due to local crises or terrorist attacks
Health risks, e.g. outbreaks of infectious diseases, such as the corona virus

 

Booking vs. Cancellation

If you look at the individual steps of a cancellation, you will realize relatively quickly that the cancellation process can only be as good as the booking process. Because technically speaking, what is a cancellation other than a negative booking? In other words, if you accept bookings manually by your employees, you will have to do the same for cancellations. If you confirm bookings individually by email, you will now also send cancellation confirmations in the same manner. The manual reversal of payments is particularly time-consuming and extremely error-prone. The same applies to the readjustment of your own resources, such as rooms, personnel or equipment. All in all, you incur high additional internal costs and thus risks for the profitability of your entire company.

 

Basic procedure for cancellation by the provider

Basic procedure for cancellation by the customer

  1. Pause new bookings
  2. Send information to the customer & binding cancellation
  3. Offer of alternative dates & rebooking
  4. Reverse the payment
  5. Adapt internal resources
  6. Update availabilities
  1. Accept the cancellation
  2. Confirm the cancellation
  3. Reverse the payment
  4. Adapt of internal resources
  5. Update availabilities

 

Reduction of handling costs via centralization, automation and synchronization

In order to get the handling costs under control while also scaling the whole cancellation process if mass cancellations occur or become necessary, the same basic arguments apply as for your booking process. The three most important tasks of a booking solution (and therefore also important for cancellations) are the central consolidation of all information, the automation of as many processes as possible and the synchronization of all affected resources.

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Special aspect: Cancellation when using several marketing platforms

If you work with marketing platforms, depending on their regulations, there may be the need to process cancellations of these platforms. Also, in case of cancellations by customers, you should of course adjust the availabilities accordingly to generate «replacement customers». By working together with several marketing partners, the effort on top of your normal cancellation processes is multiplied.

Interactive receipt of cancellations

A good booking system accepts cancellations via an interactive interface, e.g. a button or link in an email, and plays this information into the administration interface. Here you can now decide from case to case with a click or let it decide automatically if the cancellation is accepted and in which form. Possible options result from your contract conditions and include cancellation with refund, with partial refund or without refund.

Email automation

In addition, a modern booking solution always provides you with automated customer communication via email. This can be used as a confirmation of the cancellation, but also in case of a cancellation by you as the organizer. Here you can even try to shift bookings to alternative dates or convert refunds into vouchers.

Automatic payment reversal

A booking system then automatically takes care of the payment arrangements – without you or anyone else having to intervene and after entering 20+ IBANs, mistakes begin to be made.

Synchronisation of availabilities on all sales channels

Especially in the event of frequent cancellations by customers, it is important to return to “normality” as quickly as possible, i.e. sell and market the newly freed capacity. For this purpose, it is necessary that the number of your free seats is up-to-date on all sales channels, such as your website, marketing platforms or travel agencies. Your booking solution also takes care of this aspect – sometimes even in real time.

Overview of all processes as a basis for further decisions

It is also important in this context that you keep track of the situation at all times and can thus assign your available contingents to the most promising platform. But also in principle it is of course useful to keep track of all cancellations, especially with regard to your bookkeeping. Therefore, an intuitive interface is the be-all and end-all of your booking system.

Automatic adjustment of resources

In order to manage the resources freed up by cancellations, such as the cancellation of external service providers, the adjustment of your staff’s shift schedule, the joining of several groups in one room, the number of available Segways, etc., some booking systems, such as bookingkit, offer corresponding modules for resource management. Here too, the system automatically redistributes without the need for you to intervene and immediately adapt your offer on all channels.

Basic recommendations in case of cancellations

1. Establishing a transparent and clear cancellation policy

In order to avoid any ambiguity, please ensure that there is a clear rule for cancellations. This should of course be transparently accessible and fair to your customers, but also fit your business model. Under certain circumstances, a graduated regulation with different refund levels is recommended. You can still be accommodating in case of doubt, but you should also take precautions.

2. Discount campaigns for short-term compensation

To compensate for larger cancellations at short notice, you could also take advantage of last-minute promotions in conjunction with discounts. What is usually only intended for a few last places may at least save you the break-even here. Ideally, your booking system should provide import and export options for discount codes or offer promotion vouchers directly.

3. Free upgrades for rebookings

If you have to cancel your experience yourself, the first thing you should do is try to get your customers to rebook. This is better than losing them to alternative providers. Offer a free upgrade, something that costs little but shows your effort to your customers, like a souvenir photo or free welcome drinks.

4. Waiting lists as backup

By setting up waiting lists, you can offer something to interested customers, even if all places are occupied. On the other hand, you have an immediate pool of potential replacement customers in case of vacancies. This may not work in all cases, but if, for example, a travel group from Italy cancels, you may be able to «substitute» two smaller groups from Berlin. In any case, this simple backup plan is also worthwhile for less extensive cancellation requests.

5. Keep an eye on your reviews

No matter whether you have to cancel yourself or your customers cancel, a confident, friendly approach to the situation prevents bad reviews. And these can do you much more harm in the future than an enforced cancellation without refund. Keep this in mind, because positive reviews are also worth cash.

And if you do experience complaints and negative feedback, here are some tips for dealing with them.

 

Still better than No-Shows

Honestly, we had a hard time initially finding the silver lining on the topic of cancellations. Nevertheless, if you have a clean cancellation you at least know where you stand and can organize yourself accordingly. This is different from no-shows, i.e. customers who have booked but not paid and simply don’t show up. These cases are certainly worse for your business.

Frank Scheibe
Frank is a tours and activities industry expert. He reports on the latest facts, figures and trends in the bookingkit blog and the bookingkit newsletter. In his free time, he enjoys spending time with his kids and family, playing sports and eating good food.

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