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Last year, I was reviewing ways to increase business for the upcoming year. In reviewing some of our data, I was really amazed at how many cancellations we received over the course of the year.

We dove into some of the data, and we tested many different things in hopes of reducing our cancellations. I am happy to say that we were able to successfully reduce our cancellations by 11%.

5 Ways to Reduce Booking Cancellations
1. Charge a higher non-refundable deposit during high season.

In most vacation areas, you have high seasons and low seasons.

During the high season, guests typically make reservations more than a few months in advance, and you typically do not have to worry about your unit not being rented because the demand is so high. Charge guest who want to book early a higher non-refundable deposit. This way, you will be more certain that these guests are not going to cancel on you, and if they do, then you just made more money.

2. Try to get more repeat guests.

One reason guests cancel is because the internet has made shopping so easy. Even after guests make a reservation, they continue to look around and see if they can find a better property and/or a better deal.

Related: 7 Smart Tips for Buying the Perfect Vacation Home

Our research has shown that guests who have a nice vacation in a house love to come back to that house the following year. Why? Simple — they know exactly what they are getting.

Here are a couples of ways to get a higher rate of repeat guests:

Simply ask. A nice email or phone call after the guest has stayed asking them for input on your vacation home and also asking them if they would like to reserve the home again for next year goes a long way towards attracting people back. Most guests take their annual vacation around the same time each year, and most people love to go back to the same vacation spot year after year.
Offer a discount. It doesn’t have to be a large discount — even something as little as $50 to $100 off makes guests feel good, and it will prompt them to go ahead and make a new reservation.
If a guest says they are happy, but they do not rebook with you, add them to an email list: Blast emailing is a great way for you to fill up your calendar during high and low seasons. Our average conversion rate on email marketing is quite high, and last month it equated to around 12% of our monthly reservations. So this can and should be a huge marketing avenue for your vacation home.
Have professional pictures and copy done on your property. The better your pictures and copy, the better the property will show to potential guests. The more potential guests you have, the better your closing rate is going to be. Pictures and copywriting are not that expensive, considering you only have to pay for them once every few years.
3. Have a clearly stated cancellation policy.

It will reduce a lot of cancellations if you have a clearly stated cancellation policy, and you need to send this to the customer before and after they book.

This policy should be spelled out in detail, and it should clearly state the rules if a guest should need to cancel a vacation.

4. Have a heart.

Unfortunately, life comes up and throws everybody curveballs every once in a while, and guests have a legitimate reason for canceling a vacation.

If a guest wants to cancel 1 week prior to them coming in town because the weather report shows it is going to be raining all week, then I probably would stick to my cancellation policy. On the other hand, if a guest has been in or needs to go to the hospital, and they can provide documentation to you, that should be another story.

Related: 6 Amenities to Ensure Repeat Business in Your Vacation Rental

I have found that a lot of times these guest do not want their money back; they simply want to move their reservation to a later date. In these cases, if you have a heart and work with your guests, you will be rewarded — not to mention it is the right thing to do.

5. Offer your guests trip insurance.

You can do this one of two ways: the guest can buy trip insurance through you, and you charge the guest, or you can offer this insurance through a company, such as Travel Guard, and they will pay you a commission.

Offering trip insurance yourself: The benefit here is that trip insurance is typically around 8% of the booking, so if a guest’s total bill is $1000 and they want trip insurance, they will pay you around 80 extra dollars. The drawback is that if the guest cancels, you just lost out on the $1000 revenue for only $80. It works if you have guests who exercise their trip insurance only one time or less a year.
Offering trip insurance through a reputable company: Travel Guard is a reputable company, and there are other ones out there as well. These companies will pay you a commission for every time you refer a client to them, and then if the guest cancels, you get paid for the insurance, and you get compensated for the booking as well. This is the best option, especially if you only have one or two vacation home properties you are managing and marketing.

Reducing your cancellations is key to increasing your revenue. After all, a cancellation that you have to refund is lost profit. I hope these ideas work for you!

How do you minimize your vacation rental cancellations?

Let me know in the comments below!

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