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How to Overcome Day-To-Day Challenges Hoteliers Face

By Alex Gaggioli, January 25, 2016

Introduction

Running any type of accommodation property can be tricky at times. Life happens and mistakes are made, but there are usually ways to prevent mistakes and prepare for them. With the right software, your property can run smoothly and handle hiccups when they occur. We looked at the most common problems hotels deal with and offered solutions.

What to do:

Use a Channel Manager

Hoteliers spend countless hours perfecting OTA connections, listings, and managing reservations in general. Hoteliers who manage their OTAs and other booking engines manually waste a lot of valuable time. Fortunately, several solutions have been created. The most popular solution involves a piece of software called channel managers.

A channel manger is a piece of software that helps you more effectively run your property. It allows you to connect all your different online travel agency (OTA) partners and automatically manages your inventory. When a booking is made on any of your channels, it automatically updates your availability on each site. This reduces the time you spend manually updating each individual OTA and prevents over bookings because your availability is always up-to-date.

Cloudbeds offers a channel manager called myallocator, try it out for 30 days for free (link).

Set Up Your OTA Accounts for Success

Before you attempt to integrate with a channel manager, make sure all of your OTA accounts are set up. Many properties will try to set up a channel manager before creating OTA accounts expecting the OTA provider to create them. But, you need to set up your own OTA accounts for legal reasons.

Each OTA requires you to sign a contract and negotiate the terms of service. These contracts are important because they dictate how much commission the OTA charges, cancellation policies, guaranteed availability requirements (if any), among other things.

We strongly suggest that you do not negotiate guaranteed availability because it causes problems when you try to integrate with a channel manager. Guaranteed availability means that you will allot a certain number of hotel rooms or beds to a specific OTA. But, channel managers get confused when you try to do this.

We also suggest that you create a friendly relationship with your account manager. Your account manager will help you get a contract and negotiate your terms of service. They will help you if you experience problems. As is the case in any business relationship, you want to remain cordial and polite in order to ensure mutual success.

Respect Your Channel Partners

Mutual respect is important in any business, and hospitality is no different. When working with OTAs, work with your account manager to reach a mutually beneficial business agreement. OTAs represent a large part of your revenue stream and they want to work with you to ensure success.

Cancellations

Cancellations aren’t great for your property, especially during the busy seasons. When someone cancels, it means a room that could have otherwise been booked sits empty. And when rooms are empty, you lose money. Cancellations can end up costing you money due to OTA commissions and fees.

While cancellations can’t always be avoided, there are a few things you can do to minimize the risk.

First, have a cancellation policy in place. Cancellation policies are built in to all of your OTA contracts, so your property’s policies should reflect what you have negotiated. If OTAs charge the hotel a fee for cancellations, you should communicate that fee to the guest.

Second, educate your staff on your cancellation policies. You want to make sure that guests hear one story and that there is no confusion. If a guest hears different things from different people, you are asking for trouble.

Third, enforce your policy. Don’t offer to make exceptions all the time or you will end up losing money. Create a policy that makes sense for your property and your existing OTA contracts.

Fourth, your direct booking cancellation policy can be more lenient because the OTA cancellation fees will not apply. This will encourage guests to book direct because your cancellation policy is flexible.

Quick cancellation tips:

In most cases, the guest needs to cancel through the same method that they booked. For example, if a guest booked through Expedia, they need to also cancel through Expedia. If you cancel the guest’s reservation directly, the OTA will most likely try to charge you the associated commission rate.

In contrast, if a guest wants to cancel a direct booking, you just follow whatever cancellation policy your property has set forth.  

But before dealing with a cancellation, make sure you completely understand the reservation’s details in order to protect yourself from unnecessary fees.

If you follow these steps and tips, you will end up saving money on cancellation fees. In this way, you save money on cancellation fees, encourage more direct bookings, and give your guests greater clarity to help them make a booking decision.

How to Deal with No-Shows

No-shows are also another complicated situation. When a guest does not show up for their reservation, you are at risk for losing revenue. It gets complicated because you will want to release the availability to your booking channels. But, if the guest shows up late and you’ve already resold the room you have a problem. There are a few things you can do to mitigate the risks associated with no-shows.


First, make sure your no-show policy is clear in your terms and conditions, both on your website and direct booking sites.

Secondly, be prepared to deal with no-shows. Most property management systems, like myfrontdesk, have mechanisms in place to deal with unchecked-in guests. For example, myfrontdesk automatically deletes a reservation at 2:00am local time the day after the guest was supposed to check-in. This function can be turned off if it doesn’t meet your property’s policies.

But, if it is turned on and the reservation is cancelled, the availability is released via online booking platforms.

The way your property deals with no shows is likely dependent on your property type.

For example, many hostels have a policy where your bed is given to anyone who wants it if you miss the reservation check-in window. Hostels operate like this because it’s not uncommon to experience no-show guests. Hostels usually have no problem selling their beds, so having this policy works for them.

However if you are a hotel or bed and breakfast, it’s likely that you are not so nonchalant. If guests do not show up and do not call, many properties will charge their guests the room rate and tax for the first night and cancel the rest of the reservation. They do this because it is much harder for them to sell a last minute room than it is for a hostel to sell a bed.

Timeshares and vacation rentals are often much more lenient than both hostels and hotels. Timeshares and vacation rentals are paid upfront, so guests are welcome to show up whenever they please. Often these types of properties are rented out for a week or longer at a time, so the property itself has little to lose.

Regardless of property type, every no-show policy differs. In order to protect yourself from losing money, make sure your terms and conditions specify what your check-in and no-show policy are. The best way to keep expectations in line is to be upfront about your policies.

Late Check-Ins

Late check-ins can also be problematic if your property is not properly prepared. Late check-ins can cause problems because you may classify them as no-shows and then they show up. So, like the other issues, make sure that your policies are well communicated with your guests. Late check-ins won’t affect you as long as you don’t sell the room that the late guest is attempting to check-in to.

As mentioned above, many property management systems have a function that automatically cancels non checked-in guests at a certain time. This can be problematic if the guest ends up arriving late. But, sometimes travel mishaps, like flight delays, prevent guests from giving you proper notice.

If a guest does show up late, and it’s early morning the next day (like 1:00am), you want to be able to retroactively check them in for the day of their reservation.

Myfrontdesk just added this feature in order to give property owners more flexibility with their guests’ reservations. If your property management system doesn’t give you the ability to retroactively check-in a guest, you can physically give your guest the room and deal with the PMS hiccup later.

Again, late check-ins will differ for each property. Make sure that this is also outlined in your terms and conditions before a guest makes a reservation.

Damages

Unfortunately, guests sometimes cause damage and it can be a costly endeavor. If a guest damages your property, it is their responsibility to fix it as per the conditions of your terms and conditions. Many guests will contest property damages charged to their credit card, because they often don’t believe they were liable.

Having damages and fees clearly define in a terms and conditions can help mitigate these disagreements. Make sure that your terms and conditions are crystal clear.

When there are damages, a property usually deals with the guest directly instead of going through the OTA.

Your terms and conditions should mention things that are generally not allowed in your property. For example, you don’t want guests dyeing their hair in your vacation rental’s stark white bathroom. Also, parties are usually forbidden, and any damages as a result fall upon the guest to pay for upon checking out.

We cannot stress enough how important your terms and conditions are in this situation. You want to protect yourself and your property from guest damages.  

Overbookings

Overbookings are another difficult situation any property owner will have to deal with at some point. The best way to deal with overbookings is to prevent them, and you can do this by correctly setting up your channels and integrating them with your channel manager.

But, life happens and an over booking will sometimes occur. If it does occur, immediately contact the guest and encourage them to cancel. Just like we said in the cancellation section above, have them cancel through the same means that they booked through. Ideally, you want to help a guest book a reservation with you for a time that is actually open.

But, if you don’t have availability for their designated property, you should help them find a room somewhere else. This will help you maintain your reputation and mitigate any frustrations the over-booked guest has. Some OTAs have cancellation fees and they will fall upon the property. However, your cancellation policies will differ by property and OTA as designated by your contract.

This is a simplistic explanation of what to do when an overbooking occurs, but it will differ so much by situation that you need to adapt to each situation. A property should never charge a guest a cancellation fee if the overbooking was not the guest’s fault.

Conclusion

We addressed some of the most frequent challenges our customers often overcome. Hopefully our answers provided some clarity and can help you prepare for the future. If you need more clarification or would like us to address more issues, please comment below.

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