To tell the truth, a last-minute cancelled reservation or a No-Show without any notification could really drive hoteliers mad.
Apart from being a lack of respect for your job, an untimely cancellation can lead to a great economic loss. In fact, in case of No-Show the hotelier has the right to charge the rate relating to the first night and he/she can make the room available again in the following days.
Anyway, this can only be possible if a deposit has been charged or if you dispose of the details of a credit card on which the amount can be charged. On the contrary, the due amount will be hard to get it back, unless you bring a lawsuit provided that the penalty is explicitly provided by the purchase agreement, which needs to be signed in writing by the guest himself after the reservation process.
In case of a discounted rate, which involves a non-refundable clause, the hotel can demand the charge of the entire amount of the stay, that is usually prepaid. It is like a discounted train ticket, which can only be used on that specific day and that does not allow any booking modification.
The concept beyond the non-refundable rate is the following: the guest benefits from an advantageous service, according to which the ‘payment in advance’ method is requested. At the same time, the guest run the risk of not eventually enjoying their stay.
However, not all the potential customers do understand this simple assumption. For this reason, sometimes guests complain even though it is clearly stated that, in case of No-Show, the customer is not entitled to any type of reimbursement.
So, just to be clear, there are many ways in which the guest can cheat and it is important to guard against them. The best option is asking for the credit card number or for the authorization to freeze part of the deposit as the corresponding amount of an overnight stay.
The trick of the ‘pre-authorization’ turns out to be really helpful, even when the customer books through Booking.com or another OTA. If you do not do so, you won’t even be able to verify the customer’s personal information, blocked by the online operator, and in case of No-Show you will not get anything since the guest will ask for the intervention of the OTA not to pay the penalty.
Even in this case, there could be some problems if the provided credit card is a pre-paid one that can be left empty when needed.
Anyway, in a high-season time or near bank holidays, a No-Show or a last-minute cancellation could be even worse, since one or more rooms will not be occupied. What should you do then?
There’s no doubt that when the cancellation is made some days prior to the supposed date, at least you can try to put your room again on the market, maybe by calling those guests whose request had been previously rejected due to your sold-out.
In case of No-Show, this can hardly be achieved since that day is about to come and nobody is going to pack in a few hours. For instance, there are some applications that allow to distribute again those rooms which suffered a No-Show, but you clearly have little time.
In addition, for the majority of the OTAs you manually need to insert the ‘No-Show’ item to let the room be on the market again.
In order to convert a No-Show situation into an opportunity, you could use the empty room to offer an upgrade to some trusted guest or just someone that had previously booked on an indirect channel.
This can only be possible if the unsold room belongs to an upper category. You should also consider the idea of asking the guest for a small contribution for the room change, which must be proposed by the reception in order to benefit from this upgrade in terms of revenue.
If you decide to do so, since you have to keep the room available at least for the first night, you might include a ‘Time Limit’ clause in the agreement which will allow you to put the room on the market again if the guest does not show up within a specific range of time.