If you work in the hotel industry, you've probably heard the term "no show". As you well know, it happens when a guest books a room but neither shows up nor cancels the reservation. Besides being a headache, these no shows can lead to significant financial losses for your business.
So, how can you prevent them? In this article, we’ll delve into what is a no show in hotels and what policies you can apply to minimize its financial impact. From deposits and cancellation fees to embracing new technologies, you'll discover how to protect your business and enhance your customer service.
What is a no show in hotels?
In a hotel, a no-show refers to the situation where a guest has made a reservation to stay at a property, but neither shows up on the arrival date nor cancels the reservation in advance.
Unsurprisingly, when guests behave in this way, it is the hotel that suffers. No-shows have consequences ranging from loss of revenue, to difficulty in planning room allocation and managing the availability of the facilities. In some cases, no-shows can even affect the reputation of the hotel, especially if it is a major booking or at a time of high demand.
Simply put, no-shows can be a headache for hotels. They can be a challenge to their inventory management and their ability to provide good customer service. For this reason, it is important for hotels to have clear and effective policies in place to manage no-shows. That's exactly what we'll discuss below. Read on!
How to protect yourself from no shows in your hotel?
Below we will explore some of the best practices that hotels can apply to manage no-shows and minimize the impact they have on their business.
Implement clear and effective cancellation policies
Any cancellation policies should be clearly and concisely communicated to guests during the booking process. That way, they will know exactly what to expect and can plan accordingly.
Also, these policies should not only be easy to understand but also easy to follow. To do so, you should ask for credit card details as a guarantee of the stay.
While deadlines may vary depending on the hotel, common practice involves setting a clear and specific cancellation time limit and charging guests who miss it. For instance, you might allow free cancellations up to 48 hours before the check-in date and charge a fee for late cancellations after that period.
Consider implementing a non-refundable deposit
Another effective way to protect your hotel from no shows is by asking guests to pay a non-refundable deposit or an upfront fee. This means that guests pay a certain amount before their arrival. Thus they take their reservation seriously and are more inclined to honour their commitment.
The non-refundable deposit or advance charge may vary by hotel and room type, but in general, a percentage of the total amount of the reservation is set as a non-refundable deposit. You may also require full payment of the reservation in advance, which further reduces the risk of no-show, although this is not very common.
It is important to note that this strategy may not be suitable for all guests. Some guests may prefer not to make an advance payment or may have shifting plans. So it is important that you offer a clear and fair cancellation policy in case they need to cancel or change their reservation.
Use technology as an ally
Technology can be a valuable tool to minimize the risk of no shows at your hotel. It can help you set up automated reminders, like emails, texts messages, or push notifications in your hotel's app, to remind guests about their reservation and confirm their arrival.
These reminders may include important details such as arrival date and time, hotel location, information about the check-in process and any cancellation policy they should be aware of.
In addition to serving as reminders, these automated messages can also serve as a way for guests to confirm their arrival. This will help you to better plan your room allocation. As well as making better use of your resources to ensure that the room is ready and waiting for the guest at the right time.
Offer attractive non-refundable rates
During high-occupancy periods, hotels face a bittersweet situation: as demand increases, so does the risk of no shows. That's why it makes sense to take special measures, like providing attractive non-refundable rates.
This type of rates encourages guests to stick to their arrival plans, because cancelling means losing the prepaid money. At the same time, as these non-refundable rates are more affordable than the standard rates, they will generally attract more bookings.
As with non-refundable deposits, always be sure to clearly communicate your cancellation policies and the consequences of non-compliance to avoid misunderstandings or disagreements with your guests.
Conclusion
We know that no-shows can be a headache for any hotel, so it is essential to have clear and effective policies in place to manage them. By taking preventative measures like the ones we have seen throughout this article, your hotel can minimize the impact of no-shows on your hotel's operations and revenue.
However, it is important to remember that behind every booking there is a person, with plans, expectations and circumstances that can change from one moment to the next. So we must always seek to establish communications that are clear and show empathy and concern for our guests. So that, despite their no show this time, they decide to choose us in the future when the opportunity arises.
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