Best Practices for Handling Cancellations with HomeAway

Some cancellations of vacation rentals are unavoidable: an illness or family emergency can quickly change a traveler’s plans. And of course, you’ll always have those who simply change their minds and cancel within the allowable window or pay any penalty you’ve set if they don’t.

But some cancellations on the traveler’s part are due to misunderstandings or a lack of sufficient information. Others are initiated by the VRMs themselves, when a property turns out to be unavailable for the nights requested, for example, or the booking does not meet minimum stay requirements. And, there are VRMs who cancel bookings through listing services in order to re-route them to another site for processing to avoid paying fees.

HomeAway is focusing on offering best traveler experience possible, and has adjusted its requirements regarding high cancellation rates from property managers.

The importance of keeping your cancellation rates low

There are two good reasons you should strive to keep HomeAway cancellations to a minimum.

First, of course, is client satisfaction. Travelers who need to cancel for their own reasons won’t hold it against you, obviously. But if the reason is on your end, they’ll almost certainly be either annoyed or resentful – particularly if the reservation was confirmed. And that’s bad for business, not to mention the disappointment to a family somewhere.

Secondly, something many VRMs don’t realize is that HomeAway’s ranking system considers cancellations in the evaluation of where to rank a property and high cancellations can have a negative effect. There’s the simple fact that the traveler might go somewhere else to re-book. And another reason: like you, they’re trying to build a loyal customer base. Even if it’s your property that’s initiating the cancellation, if the traveler made the booking through HomeAway, the disappointment will (rightly or wrong) reflect on them in the customer’s mind.

Another reason HomeAway dislikes cancellations is that they point to the possibility that the VRM is cancelling to save fees by re-booking reservations at a different site.

For several reasons, then, HomeAway wants as many bookings as possible to stick. As your ratio of cancellations to bookings becomes more negative, your properties are gradually less likely to appear as matches in searches.

How to reduce cancellations

1. Keep your calendar accurate. There are two aspects to this. The first and most obvious is to ensure that any changes in availability are made as soon as you know about them. The second is to take advantage of synching utilities that automatically propagate the changes across every site where your listings appear.

2. Be clear and upfront about rules and restrictions for booking. This should include what is allowed while staying at the property. Don’t downplay restrictions in order to seem more congenial. If you don’t want a home full of spring breakers, shape the rules to avoid it upfront. Minimize the rules to attract more bookings and you’ll too often end up having to decline them.

3. Be clear and accurate about your minimum stay rules. Misunderstandings in this area are a common reason for declined or cancelled bookings. Be sure to adjust these in your listings as needed to reflect for seasonal or event-related minimum stays.

What to do when you do need to decline bookings

1. If you must decline, do it quickly. Don’t wait for the system to process an automatic decline (if you have this feature).

2. Decline politely, and give a reason. You can write a custom message, or create templates for the various reasons bookings are declined and simply hit “Send.” Either way, provide the reason for the decline of the booking and be very polite about it: you want the customer to re-book with you!

Advantages for owners

HomeAway’s goal is to create a great experience for both travelers and owners. While there are many factors that influence rank, through HomeAway’s ranking system, companies with a higher percentage of accepted bookings and lower rates of cancellations and declines have the potential to gain more exposure to prospective guests.

According to the HomeAway Partner Blog,

“… It is not about absolute numbers or thresholds; there isn’t a magic number of declines or cancellations that will affect your search position. Your performance in best match is about how you stack up against the competition in your market.”

Additionally, HomeAway has a Booking Update Service (BUS) that allows property managers whose software is integrated with HomeAway to alert HomeAway about updates and cancellations for bookings made on the platform. In addition, the BUS provides HomeAway with new bookings that didn't occur on HomeAway, but were a result of an inquiry on HomeAway, so that property managers can receive credit for them in ranking metrics.

In short, the more bookings reported, the better your conversion ratio, which results in better search rankings for your business!

Cancellations are a fact of life in our business, but the fewer, the better. Consider the repercussions as you formulate your business practices. You don’t want to put off prospective renters with too many precautions, but balance this with the knowledge that cancellations don’t help (and sometimes hurt) the parties involved.

Tom Beagles, Senior Manager of Global Product Marketing, is HomeAway’s specialist in their Ranking algorithm and Ranking Metrics tool. Beagles also oversees all Marketplace initiatives which help HomeAway continue to deliver success for its partners. Prior to his role at HomeAway, Beagles was part of the Innovation & New Ventures Team at eBay.