Give your guests peace of mind by removing the financial uncertainty of bookings during COVID. Your.Rentals strongly recommends changing to a Free7 or Free14 cancellation policy for the time being.
Guests Still Have Strong Desire to Travel
Times are undoubtedly tough and we are in for a long winter. During the past 2 months with the onset of the “second wave” of COVID, we have seen dramatic changes in booking patterns due to the uncertainty of guests about whether they will be able to travel when they want to.
The experiences of guests during the first wave of COVID have been negative due to the uncertainty about whether they should travel. If they could not travel, how could they ensure they were not out of pocket or were able to rebook their stay.
There is however certainty that a pent up demand for traveling is building. People and families are dreaming about when they can travel again, and plans for summer 2021 are taking shape.
Your.Rentals has taken many steps to reduce this uncertainty including offering rebooking for a later date, providing rebooking credits to ensure that your property will get the booking later and working with channels and guests to minimise disruption as best we can.
New Guest Booking Behaviour during COVID
We would also like to share some data with you to illustrate the changes we are seeing in booking behaviour.
In normal times, the following factors are the most important to ensure you a healthy booking conversion rate:
- Having competitive pricing
- High quality listing content including photos, headline etc.
- Having reviews of your property by previous guests
In the past few months, we have noticed that these factors are currently not the most important in determining which properties are booked.
- Guests are booking properties where cancellation policies allow full refunds closer to check-in. For example, our Free14 policy allows a guest to receive a full refund when cancelling more than 14 days before check-in.
- Guests are booking closer to check-in. Since October 2020 more than 60% of bookings are made less than 30 days before check-in, and 41% of bookings less than 7 days before check-in.
- Price is not the most important factor in booking conversion at the moment. A flexible cancellation policy greatly overrides that.
A Free Cancellation policy can help drive more bookings during COVID. We will further explain below.
Free Cancellation Policy to Get More Bookings during COVID
Understanding the trade-off
Of course our hosts and property managers would prefer a strong guarantee of future earnings. You would like the security that a guest will not cancel 1-2 weeks before check-in without you earning at least a partial income.
On the other hand, guests would like security that they will not be out of pocket if they cannot travel due to COVID restrictions.
We advise that for the time being, our hosts and property managers offer Free Cancellation policies – Free 14 or Free 7 – to get more bookings. You may also like to increase your rates (or remove early bird discounts) to cover the additional risk of guest cancellation, as we see no conversion impact of doing this.
In the event that there are no travel restrictions by check-in day, based on the data available, we do not expect that cancellation rates to be significantly high. Although we of course anticipate that they will be higher than the pre-COVID rate of around 3% of bookings being cancelled by guests, the small increase in cancellations is vastly outweighed by the increased booking conversion.
We also forecast that in the event of travel restrictions being in place during your peak seasons, domestic travellers will be booking closer to check-in date (as we saw in summer 2020). There is a good chance that you’ll be able to have replacement bookings at short notice in the event of a cancellation.
Our goal is to support you to have more confidence in your business for the coming 12 months. We think the best way to do that is to have confirmed bookings in your calendar. Therefore, using a free cancellation policy, such as Free 7 or Free 14, will put you in the best possible position to get more bookings during COVID.
For more info on how things have changed since the Pandemic, check out How will guest booking habits change after Coronavirus?