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Massive cancellation of reservations: how to be prepared to recover as well as possible

In recent days, as a result of the crisis of the well-known Coronavirus, innumerable trips and events in large cities around the world have been canceled at the last moment.

The most famous examples are the Carnival of Venice, the Mobile World Congress (MWC) in Barcelona but surely you know or suffered the cancellation of reservations in your hotel for this issue.

This leads us to analyze how the hotel policies and practices should be in advance to be able to alleviate similar situations and not lose out.

Although we know that there is no magic recipe in these situations, the important thing is to analyze all the points involved and decide reserve by reservation to be able to maintain the loyalty of these customers. The knowledge of revenue management is vital in this type of situation, since different aspects of sales are contemplated, all the points of sale of the hotel (not just rooms) and commercial strategies are also analyzed.

The 3 important points to analyze for the recovery strategy in the face of this type of crisis are:

Customer origin.

It is a good time to analyze what percentage of customers your hotel receives from the country / region in conflict. If you have a Channel Manager with statistics that inform you it would be very easy to obtain it and thus see how your sale is distributed.

In these situations, you can start rethinking the sales strategies and what new audience to target. Did your hotel only receive international guests? It may be the opportunity to offer special rates for national guests, who generally book in their home country with less advance notice than those who have canceled.

Search for less conservative markets

It is a difficult point but it is worth a try and each hotel will evaluate the case before these events.

Important information: the most conservative markets, that is to say that they are sensitive to this type of alerts (health, social conflicts, etc.), are usually mostly American, Asian and European.

On the other hand, for the Latin American market this type of event is not usually so decisive when traveling. This public, in addition, makes reservations with less anticipation and still they are of prolonged stay.

The national client continues to play an important role and should be tempted with good promotions.

Cancellation Policies.
At this point the work should be even more handmade.

Although we know that before a massive cancellation of reservations in a hotel, everything becomes chaos and panic and anxiety appears on the part of Management or Direction, the recommendation is not to use general mechanisms, but to measure each reservation based on parameters by type of customer (if new, if a loyal customer), or reservation (individual or through operator).

In making decisions, what matters is to protect customer loyalty in the short and medium term.

Remember that the income of the month is very important, but in this industry the main objective is for the guest to return to your hotel.

Apply flexibility mechanisms and find intermediate solutions such as postponing the reservation, without refund of the payment, but guaranteeing it for other dates that the hotel has.

When it comes to charging penalties, it is also useful to differentiate between purely force majeure cancellations and those that occur because the client just does not want to travel.

Conclusion.
These eventualities are an opportunity to stop to think about several things:

-Who are we selling to?

-Is our supply and demand well distributed?

-Does our hotel receive public from different markets: direct, OTAs, travel agencies, corporate?

– What sales channels do I use that guarantee me a sale divided into segments of guest type, nationalities, etc?

– How are cancellation policies? They protect us against eventualities of this style?

And above all to understand, that in the hospitality industry almost nothing is predictable and we must have the ability to adapt.

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Carla M

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