COVID-19 Cancellations: How to Deal with Refunds

COVID-19 Cancellations: How to Deal with Refunds

There is no doubt that COVID-19 has largely impacted the hospitality industry. The flow of bookings into hotels and serviced apartments, i.e. vacation rentals, has remarkably changed, nosedived in different countries in light of the unpredictable situations caused by the coronavirus outbreak and the more severe lockdowns and crackdowns initiated by governments.  Travel restrictions have forced many travellers to cancel their bookings because health always comes first. The increasing number of booking cancellations has brought up the challenging topic of refunds at the time of COVID-19. We need to know how to deal with refunds as a short term rentals owner, especially for direct bookings. 

Emma Lake on The Caterer stated on 23rd March 2020 that in these tough days for the hospitality-related businesses, OTAs and listing sites have been “accused of behaving appallingly by changing terms and conditions so bookings – including those that were non-refundable – are reimbursed, without cancellation charges.” 

OTAs like Expedia and Booking.com have started changing the way they deal with cancellations and are forcing hosts to refund payments, leaving them at a loss at a time when all hoteliers and other vacation rental owners have entered a survival mode. In other words, Airbnb and the rest are salvaging their own cash flow, not showing any consideration and understanding for their hosts’ financial well-being at a time most needed and expected. 

But even in these tough days, there is light at the end of the tunnel!

Have You Started Earning through Direct Bookings?

For those who are lucky enough to drive a sufficient number of direct bookings into their businesses, the challenge before they lie in deciding how to deal with refunds – whether to refund, when and how much. This blog contains our suggestions to hosts about dealing with cancellations and refund requests generally and at the time of COVID-19.

If you have already started taking direct bookings, it is time to set your own rules. As an operator of short term rentals and in order to keep your cash flow steady while safeguarding the relationships with your guests at the same time, you need to: 

  1. Stick to your Terms and Conditions – don’t offer refunds unless you are contractually obliged to.
  2. Offering a change of dates only helps cash flow, but still impacts your business’s profitability. However, hosts need to build up customer loyalty, so a reasonable degree of consideration needs to be shown to guests. You can do this through discounts off future stays or the offering of additional services free of charge if they do come back in the future.
  3. Educate your guests – guests booked on a non-refundable rate should have taken out a travel insurance policy to cover them for cases such as this; hosts should make sure they always advise guests of this at the time of booking.
  4. Hosts may wish to explore offering flexible cancellation policies over the next few months given the uncertain state of affairs; this can temporarily help with cash flow issues and may help them get more bookings than they otherwise would. This is because guests find themselves very reluctant to commit to anything. It is happening in light of potential travel restrictions and the overall uncertain climate.

Are You Not Yet Ready to Take Direct Bookings?

At the time of COVID-19, by facing the topic of cancellations and refunds we find direct booking a relevant topic. Zeevou is The Direct Booking Revolution! pioneer, helping short term rentals operators fuel and increase their direct booking endeavours. 

  • Zeevou allows you to automatically collect and keep a record of the guests’ email addresses, with GDPR marketing consent. 
  • It provides vacation rental owners with SEO-friendly websites free of charge. 
  • Zeevou has launched a completely free OTA. Guests and hosts are able to communicate and arrange bookings without paying commissions at Zeevou Direct. By directing guests to book on Zeevou Direct, all hosts can help each other obtain more direct bookings. To sign up and list your properties for free, click here.

These days have shown us the real face of the hospitality industry’s giants. They have virtually left hosts at a loss to save their financial well-being and profit-making. Zeevou is here to decrease your dependency on OTAs. While Zeevou is providing the tool, it’s down to all of us to bring about The Direct Booking Revolution!

Further Reading

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