Review your cancellation policies
If you do not already have a cancellation policy in place, it’s time to write one. The current industry standard, based on what major OTAs recommend, is to allow a full refund for cancellations made 24 hours before departure time.
With a drastic increase in cancellations due to the recent outbreaks, we’re starting to see that such flexibility comes at a cost.
Cancellation terms should depend the resources your tours or activities require
The more expensive and resource intensive your services cost, the less flexible your cancellation policies should be.
To recoup your costs on a cancellation, you could also charge a cancellation fee instead of giving a full refund, or only offer for the booking to be rescheduled instead of allowing cancellations at all.
Timeframe for cancellations and refunds
How much time will it take for you to secure a new booking if a tour is cancelled? Your refund period should be adjusted to give yourself enough time to secure a new booking.
You could offer free cancellations up to 24 hours, 48 hours or 72 hours of departure.
Alternatively, you can offer free cancellation up to 24 hours after the booking, or free cancellation up to 7 days before departure.
In your cancellation policy, remember to state the steps customers should take to cancel a booking with you. Also include contact details such as a phone number or email address.
Resellers and OTAs
The default cancellation policy for most OTAs is to offer a full refund when cancellation takes place 24 hours before the tour.
If this is not consistent with the cancellation policy you offer on your own website, we recommend that you change it so that your terms are consistent across all your sales channels.
If you work with 3rd party suppliers who either offer you tours to sell or rent out resources like buses and boats to run your tours, what is the arrangement you have with them around cancellations and refunds? Can you negotiate for something more flexible?
In this time of crisis, it is important to work closely with your business partners and suppliers to find solutions that work for both companies.
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