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Booking.com Refunds Policy: Process and Ts & Cs Explained
Travel plans can change overnight. To safeguard hosts and guests, Booking.com offers a friendly refund policy. Here are your FAQs about the applicable policies, explained in the event you oryour guests need to cancel.
Key Takeaways:
- Booking.com lets hosts choose their cancellation policy, allowing them to decide whether they want to allow free cancellation.
- It’s recommended that hosts choose a flexible refund policy to encourage more bookings.
- If hosts discover that their cancellation rate has increased, it’s recommended that they do some competitor research to ensure their property still offers value.
Guests often save for years for a trip, making the disappointment so much greater if they need to cancel their booking or change dates. On the other hand, hosts and service providers budget carefully, and when guests cancel their booking, it can throw all their planning completely off course.
This makes giving a full refund tricky. You have more than one party to consider.
One way that Booking.com has tried to make it as fair as possible is by offering various options. Here’s a quick explanation of the different cancellation policies, tips on how you can discourage guests from cancelling, and other key considerations about keeping your occupancy rate high.
What Cancellation Policies Does Booking.com Offer?
When it comes to flexibility, Booking.com sets a great example. They offer a fully flexible policy and a customized policy that works as follows:
Each service provider sets their own cancellation policy, which is detailed in the service provider's cancellation policy and can be found on the service provider information pages. These pages provide critical information about cancellation terms, age requirements, deposits, and other booking-related policies.
The fully flexible policy allows guests to cancel their reservation free of charge up to a certain date, while the customised policy may include partial refunds or non-refundable options.
Important details about cancellation terms, price components such as deposits and additional fees, and refund eligibility are often found in the fine print. It is essential to review the fine print before completing your booking to understand your rights and obligations.
Keep in mind that changes to a booking, such as dates or guests, may require you to cancel and rebook, depending on the service provider's terms.
Fully flexible policy
With this cancellation policy, free cancellation is possible. Guests can cancel, without having to pay a cancellation fee, as long as it’s done during a specific time frame before the check-in date. It’s important for guests to review their booking details to understand the exact cancellation window and any applicable fees. While hosts will lose the money they would’ve received for the booking, they can set this time frame, giving them some control over the refund policy.
Customised policy
As the name suggests, this option gives hosts more options. In addition to deciding how long before the check-in date they qualify for free cancellation, they can choose the payment method and terms and set the cancellation fee amount. Guests must provide accurate credit card details to ensure successful transactions and avoid issues with non-refundable payments or cancellations.
How Do Booking.com’s Special Conditions Policies Work?
In addition to these cancellation policy options, the booking platform also lets hosts set special conditions with the following policies: Special conditions may include additional supplements for services such as extra beds, breakfast, pets, or group bookings, and may also specify age requirements for guests.
Partially refundable
The partially refundable policy states that a guest will have to pay a set amount if they wish to cancel their booking, which means they’ll receive only a partial refund. The cancellation fee is 50% of the total amount or the sum of the first night’s stay. As for refund terms, that’s up to the property to decide.
Non-refundable rate
As the name suggests, the non-refundable rate offers no refund. If guests decide to cancel under this policy or make changes (like a date change), accommodation providers will still receive a guaranteed payment for these non-refundable bookings.
How Flexible Should Your Cancellation Policy Be?
When it comes to selecting your cancellation policy, there’s no correct answer. Each option offers a set of unique pros and cons.
The main benefit of implementing a fully flexible policy is that you can attract more bookings. Some suggest that you should avoid offering a full refund during the peak season, though. During this time period, you’re usually charging the maximum realistic rate. This means that if guests need to cancel during these months, the financial knock will be that much greater.
That being said, for most properties, it can be easier to find a new guest during this time.
Another key factor to use as a guideline is your price. If you’re willing to offer a partial refund instead of a full refund, you can afford to make the nightly rate lower. From a guest’s perspective, it’s riskier, but they have the benefit of paying a lower price.
The only thing that’s certain is that cancellations are bound to happen. You’ll need to learn to approach them with the necessary tact and professionalism. In fact, Booking.com recommends that hosts choose flexibility over strict, non-refundable policies.
All in all, flexibility leads to better customer satisfaction, which can work in your favor in the long run. For example, if you don’t make a big deal about a guest cancelling a booking within 24 hours after the initial booking, the same guest will be more likely to book your property for their next vacation.
At the end of the day, choosing a cancellation policy will require an open mind and willingness to experiment. Play around with your different policies and rates and measure the effect to find the ideal balance.
What Are Smart Flex Reservations?
For hosts interested in taking a more flexible approach, there’s the Smart Flex option. Previously called Risk-free Reservations, it helps hosts to appeal to guests who prioritize flexibility.
Not only can it help you to appeal to travelers with a specific need, but it can also boost overall bookings. In the event of a cancellation, Booking.com will take it upon itself to find a replacement guest.
To do this, they can give your ranking a boost or add a discount. If they apply a price incentive, you can rest assured as they’ll cover the costs. In other words, the discount won’t affect your bottom line.
If no replacement was found, they’ll compensate you, ensuring customer satisfaction even when guests cancel bookings. This, though, excludes cancellations attributed to force majeure, like lockdown regulations. In cases of overbooking or unforeseen events, Booking.com may help guests by arranging alternative accommodation, ensuring they are relocated to a comparable or better property.
This option uses traveler behavior insights to help identify trips that are less likely to result in cancellation. Based on this risk assessment, the algorithms will then offer flexible options only to this group of guests.
The only thing that hosts need to do from their side is to ensure that booked rooms that were canceled remain open. Also, you’ll need to remove restrictions like the minimum length of stay to make it easier to get rebooked.
Depending on the location of your property, you’ll be enrolled in this program automatically. If you want to opt out, you have the option of doing it temporarily (for up to three months at a time) or opting out for an unspecified time.
Booking.com recommends that property managers keep their calendars updated to avoid overbooking and ensure accurate availability.
How to Set Up Your Cancellation Policy
While Booking.com offers different cancellation policies, hosts still need to set it up and add specific details. Here’s how to go about that:
- Log in to Booking.com extranet.
- Click on the Property tab and select Reservation policies.
- Click on the option to Create a new cancellation policy.
- Select if you want to offer free cancellation.
- If you’ve opted for free cancellation, specify how long before the check-in date they can cancel free of charge.
- If you don’t want to go the route of free cancellation, specify how much you’ll charge as a penalty fee for cancellations or no-shows.
- Click on Save.
Guests can view and modify their reservations through the booking page, where they should also ensure their contact details are accurate to facilitate communication and support.
Next, you’ll have to connect your newly created cancellation policy to a rate plan. This step is essential so that guests can study your cancellation policy before booking a property. To do this, you’ll need to complete the following steps:
- Log in to Booking.com extranet again.
- Click on Rates & Availability and select Rate Plans.
- Select the Rate Plan that you wish to link to your cancellation policy.
- Click on Edit.
- Select Policy and click on Edit.
- Select the relevant policy and click on Save.
- Click on Apply changes.
For further information about your specific cancellation policy, consult your booking confirmation email or the 'Bookings' section of your Booking.com account.
How Do Cancellations Work for Hosts?
When a guest cancels a booking, hosts can let Booking.com know either via the Pulse app or its extranet. This way, you can avoid being charged commission fees.
Guests need to arrive on time for their reservation and provide a valid phone number to ensure smooth communication. Guests should keep their phone accessible and contact booking or the property if they expect to arrive late, as failure to arrive or notify the property may result in penalties or cancellations.
Considering that Booking.com charges commission fees on all non-refundable bookings, partially refundable bookings, and confirmed stays, it’s worthwhile to take this extra step.
Apart from no-shows, hosts can also initiate a request to cancel under the following conditions:
- The guest provided an invalid credit card.
- You haven’t received the prepayment.
- You have received a double-booking.
If a customer requests to change their booking, the property manager can process the change if the booking is not marked as an overbooking and the new check-in date is not in the past.
5 Tips for Reducing the Number of Cancellations
You can’t prevent cancellations. However, there are measures that you can put in place to discourage guests from choosing this option. The person making the booking is responsible for ensuring all information is accurate and for managing any claims work if issues arise.
If you encounter issues with a refund, contact the property as soon as possible. If problems persist, escalate the matter to Booking.com Customer Service for further assistance.
Study your cancellation rate
Booking.com offers a valuable report (it can be accessed via its extranet) that offers an overview of the cancellations you’ve received thus far. This report can be a useful resource for identifying trends. For example, it could be that weeklong stays, group bookings, or specific room types typically result in cancellation. Reviewing all price components, including deposits and additional fees, can also help you identify if unexpected costs are contributing to higher cancellation rates.
Delve deeper to figure out if there’s a reason for this trend that you’ve identified. For example, it could be that your property isn’t geared for longer stays or you need to add extra beds to make it more attractive to group bookings. Or, it could be that your guests are looking to mix business with pleasure and realize only after booking that there’s no dedicated workspace or that Wi-Fi isn’t included in the total price.
Do competitor research
Apart from researching your own performance, also turn your attention to similar listings in your area. The goal is to remain competitive.
If you have only a one-bedroom apartment and you’re charging significantly more money than a hotel room, don’t be surprised that guests make a hotel booking instead. Aside from the number of rooms, also look at the amenities on offer. After all, guests are searching for more than simply extra beds. A similar property might be able to accommodate the same number of guests, but if it includes extras like a swimming pool, free Wi-Fi, and laundry facilities, guests can easily cancel their booking only to make a new reservation with one of your competitors.
Leverage prepayment policies
Booking.com also offers other policies, like a prepayment policy that can help deter cancellations. By opting for a prepayment policy, a guest will be charged for their stay in advance.
You can still use this option, even if you don’t accept credit card payments. In this case, you’ll simply message your guest requesting them to pay the bank directly via a bank transfer.
Guests are less likely to cancel if they know that they’ve already paid for the reservation. There’s a good chance that they’ll find it easier to change their travel plans so that they can still make the trip than going through the effort of requesting a refund and waiting for the refund to clear.
Join the Genius program
Aside from the different policies, you can also check if you’re eligible to sign up for the Genius program and become a Genius partner. The advantage is that it offers you exclusive visibility to the platform’s most frequent bookers.
While it will mean that you’ll need to offer a discount, you can still make enough money. In fact, according to their website, hosts can grow their revenue by 40% (and that’s after the discount has been applied). Note that additional purchases, such as car seats for rental cars, do not benefit from Genius discounts.
Allow last-minute bookings
Many hosts guard against accepting last-minute bookings. However, last-minute bookers are less likely to cancel.
If your cancellation rate is exceptionally high, you can help fill those empty units by shortening your last-minute booking window and even allowing them to book your property on the same day.
Useful Features to Help With Refunds and Cancellations
Aside from reaching out to Booking.com’s help center, there are also features that hosts can use to streamline the booking process and deal more effectively with cancellations. Managing reservations and refunds is made even more convenient through the booking app, which allows you to access policies, request changes, and handle cancellations on the go.
These include:
- Automated messaging to guests about cancellation policies
- Calendar sync to avoid double bookings
- Direct access to refund and cancellation options
If you need to resolve a payment or refund issue, you may be asked to provide a bank statement as proof of transaction.
The auto-replenishment feature
This feature will be activated for new partners by default. Basically, whenever a booking gets cancelled, the room or property will be set as available again automatically. This means that the property will remain visible without any manual effort required from the trip providers.
Data and analytics
As mentioned earlier, it’s key that you put time aside to study trends and patterns. Using the extranet and the booking app’s activity feed, you can gather valuable data about your market.
Aside from uncovering which cancellation policies are the most popular, you’ll also gain insight into guest demographics and the average search booking window.
For insight into your sales, you can check out the Analytics dashboard. What makes this real-time business report so useful is that it also lets you compare your results to your competitors.
Payment and Refund Methods
So you're booking a trip on Booking.com? Smart choice. But here's the thing—when you're picking how to pay for that perfect getaway, you're not just choosing convenience. You're actually setting yourself up for how any potential refunds will work down the line. There's definitely more to it than just clicking "book now."
What Payment Options Do You Have?
Most places on Booking.com will take your major credit cards and debit cards without a fuss, and you'll often find they've got extras like PayPal or bank transfers thrown into the mix.
However, each property's got its own setup, so you'll want to check what they actually accept on the property page, during booking, or in that confirmation email they send you. Trust me, there's nothing worse than getting to the final step and finding out your card won't work.
How's That Refund Going to Work?
If you end up canceling and you're lucky enough to get some money back, the cash is going straight back to whatever you used to pay in the first place.
Paid with a credit card? That's where it's heading. The timing can be a bit of a waiting game depending on your bank or credit card company, but you're typically looking at about 7–12 business days before it shows up. Used a debit card or bank transfer? The timeline might shift a bit, but it's usually in that same ballpark.
What If a Host Has To Cancel?
Should you have to cancel a reservation, you need to contact customer service, which will then refund the guest right away. Booking.com typically issues a refund to the customer immediately if the property owner cancels the reservation.
The hard truth is that guests aren’t the only ones subjected to unforeseen circumstances. Sometimes hosts need to cancel a reservation. Whether it’s a last-minute burst pipe that leaves you with no hot water or severe storm damage that requires substantial home repairs, the guest experience and their safety remain the most important.
Another instance in which the platform allows hosts to cancel a reservation is if the property is overbooked. Not only is it costly, but also time-consuming as you’ll have to find guest accommodation that offers the same standard (or better). In any cancellation situation, it is important to confirm the cancellation with both the guest and Booking.com to ensure clarity and a smooth refund process.
The good news is that double-bookings are preventable. Unlike weather conditions, you can have total control over your calendar when you add a reliable vacation rental software like iGMS to your tech stack.
FAQs
How does Booking.com’s damage deposit work?
Booking.com offers two damage policies: the damage program and damage deposit. With the damage deposit, hosts will need to manage the payment process on their own. However, with the damage program, the platform will facilitate the damage payment process. That said, they discourage guests from charging one as it usually leads to more cancellations and fewer bookings.
Do hosts pay commission on cancelled bookings?
It depends. Hosts need to pay commission on any confirmed stay. If a guest was charged for a non-refundable booking or received a partial refund for a cancellation, a commission will still apply.
Do Booking.com guests have to pay a cancellation fee?
It depends on the service provider’s cancellation policy. Some bookings allow free cancellation before a deadline, while other bookings charge a cancellation fee.
