Cancelation Policies can make or break your Airbnb
Today, Hoasty manages more than 30 properties in 6+ states.
To say the least, we are a small sized Vacation Rental Management Company. We are moving quickly to be able to handle the needs of our property owners.
But in 2019 to date, we have missed out on opportunities for our owners of more than $10,000 in lost revenue due to guests canceling mid or pre-stay, and hemorrhaging both side’s revenue. There are a few structural issues with these cancelations, and we wanted to share why Hoasty has changed our corporate standard to strict cancelation policy.
Let’s get one thing straight. As a property owner, you are not Airbnb / VRBO / HomeAway’s customer. The Guest is. Therefor they will side with the Guest every time when a disagreement or conflict comes about.
Previously we were ‘flexible’
Hoasty, since inception, has been focused on guest experience as you may expect. We are working daily to make sure that we can focus on the guest’s comfort and creating a standard lux experience across our units nation wide. Whether you’re in Arizona or Florida, Chicago or Lexington, Hoasty will deliver the same 5 star experience and communication quality.
Therefor it may have seemed natural that we would utilize the ‘flexible’ reservation policy for Hoasty.
Who doesn’t want to be flexible right?
Things happen, trips change and we want to be an accommodating brand.
Yet as Hoasty grew, and we experienced more guests canceling 5 days, 4 days, 3 days before their reservation… we realized we didn’t have time to ‘re-sell’ those days on our calendar.
The largest loss for Hoasty was a $4,000+ booking request for nearly a month that was canceled only 3 days into their stay as they were not happy with the location. Therefor, through Airbnb’s above ^ conditions… they were able to simply click ‘cancel’ and were refunded every day they did not stay.
From a customer experience standard, that sounds great right? If you’re not in love with your stay, simply cancel and you get all your money back. Here’s the problem with that: Hoasty doesn’t have time to re-sell those days. The other guests that were considering those dates saw our property as booked, and were not able to stay with us.
Now we are ‘strict’
So let’s take a look at why we changed to strict cancelation policy.
Woah, totally different huh?
You mean that we can’t arrive, and just cancel after our first night and get a full refund for all the days we didn’t stay?
This may be a harsh change but to defend our owner’s assets and the revenue of the company, we believe that this is the best decision for our industry.
Would love to hear from folks who are thinking about their cancelation policies on Airbnb, HomeAway, VRBO and beyond. So far we have seen 0% difference in booking quantity, and are thrilled that new bookings achieved are relatively secure.
If you are looking to learn how much a property could earn as a vacation rental, make sure to submit it to Hoasty.co and we will be happy to deliver an AirDNA report to you for free of how much your property could earn!