“I’m sorry—I know it’s last minute but I can’t make the tour/activity.”
Those are words that every tour operator and activity provider dreads hearing. But sadly, those words are heard quite often in the tour and activity business and the travel industry as a whole.
Travelling is fun but can be quite stressful. Flight delays and bad weather are common factors that force travellers to cancel their plans. Understandable! However, that doesn’t take away from the fact that cancellations can be stressful for any business owner. So what should you do when cancellations occur? How do you ensure you get as few as possible in the first place?
This article will provide tips on how to handle cancellations and no shows as well as how to ensure that they happen less frequently.
Let’s dive in!
Have a Cancellation Policy in Place
When a customer cancels, you lose both time and money. So if you don’t have a cancellation policy in place, you need to create one. The reason it’s so important to have a cancellation policy in place is that it strengthens your revenue strategy and helps to guarantee occupancy.
How should you create a fool-proof cancellation policy? Well, you first need to decide how strict or flexible you want the policy to be. For example, if you choose to have a strict cancellation policy, you could offer cheaper non-refundable rates which are attractive to travellers on a budget. However, with this cheaper rate, they won’t get any money back when they cancel.
Since the tours and activities industry is quite competitive, the benefits of having a flexible cancellation policy could offset missed revenue. For example, if you agree to cancel a reservation, particularly with a new customer, you maintain a positive relationship with them, which could encourage them to book with you again later on. You should analyze cancellation requests on a case-by-case basis and determine how flexible you can reasonably afford to be.
Here are some factors to take into mind when deciding whether you should refund a cancellation:
Are the rates for that season higher than they were when the tour was booked?
Was the tour booked in a season when the particular tour was in higher demand?
What about the customer’s explanation? Are there any important human factors to consider?
When creating your cancellation policy, there are two rules to follow:
Clearly state your rules and regulations regarding cancellations.
State your payment terms, cancellation time frames and refund policy, if you have them.
Reschedule if Possible
Remind any customer who needs to cancel and who is within the cancellation window that you set in your cancellation policy that they can reschedule for a more convenient time. Even if they are outside of the cancellation window, you can offer them a chance to reschedule, if that makes business sense for you. The benefit of doing this is that you can retain that customer, particularly if they are new. The alternative is to go ahead and let them cancel and disappear from your tour business forever.
While it’s great to allow rescheduling, only do it if you can make it as easy as possible for customers to reschedule their tours. The easier you make it for customers to re-book, the more chances you have of reducing no-shows.
Send Out Email or Text Reminders of Upcoming Tours
You should send out confirmation emails or texts 24-48 hours before the tour. This is a great way to avoid last-minute cancellations and no-shows.
Your customers book your tours because they actually want to experience them. They would rather keep their booking than miss the tour or activity. But as mentioned earlier, plans can change unexpectedly.
That’s why it’s important to remind them of their upcoming bookings. You can send out a simple reminder via email or text. Don’t take reminders lightly, as they can impact your bottom line. Remember that sometimes people just need a gentle reminder, and they will show up.
Sell More Packages
When a customer buys a tour or activity package from you, they know they are committing to everything on the itinerary. They know they aren’t able to change their plans or reschedule, even while on the tour. For example, there are specific pick-up points and times that they have to adhere to in order to avoid delaying and annoying other customers on the tour.
So, curate and offer more packages, it’s harder for clients to cancel their plans. Then, even if they do cancel, you have your cancellation policy in place and can perhaps fill up their space with a customer on your waitlist.
Follow Up on No-Shows
Perhaps a customer paid and didn’t show up. Or perhaps they didn’t pay in advance and didn’t show up. What do you do in either case? Find out why they didn’t show up!
Many tour and activity providers don’t follow up on no-shows. Some may reach out via phone or email, with little to no response.
So what do you do when you want to help a no-show to rebook but can’t reach them? In those cases, it’s better to automate. You can rely on activity booking softwares like Regiondo(opens in a new tab) to automate messages to no-shows with a link to reschedule their tour or activity. By doing so, there’s a better chance of getting a hold of them and helping them follow through on their original purchase.
Understand Why a Customer Cancelled
It’s important to know why a customer has cancelled their tour or activity. It helps to remember that customers cancel for various reasons. It may be a personal emergency, but no matter the case, knowing why they cancelled could give you insight into how to refine your cancellation policy, or even how to run your business.Understanding this will also enable you to create a strategy to win them back and help them re-book the tour.
Humans Make Mistakes; Software Doesn’t
Things slip through the cracks when you’re running a busy business, so consider automating as many things as possible. As mentioned earlier, you don’t have to text, call or email customers individually regarding cancellations. You can automate the whole process and remove the potential for human error with software such as Regiondo(opens in a new tab), which helps send confirmation reminders to customers who book your tours and activities.
Cancellations are simply a frustrating side effect of doing business. There’s really nothing you can do to eradicate them in your tour and activity company, but you can prevent them from happening as frequently.
The tips and tactics mentioned in this article should help reduce cancellations and no-shows in your own tour business. Remember that it’s a good idea to monitor and track cancellations and no-shows, perhaps from month to month, so that you can tweak or optimize your cancellation policy.
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