As the vacation rental industry has been growing, certain policies are gaining momentum and acceptance amongst other industries.
Traditionally, hotels have been known for their ability to cancel a reservation within 24 hours of checking in. This cancellation policy is attractive to business and leisure travelers as it allows for great flexibility and customization. However, Skift.com reports that this has left hotels with lower night occupancy rates, missed revenue opportunities, and a logistical room inventory nightmare.
In response to this cancellation challenge, major hotel chains such as Marriott, Hilton, and InterContinential Hotels Group have implemented new cancellation policies that reduce the amount of time guests have to cancel their reservation. The 24-hour cancellation window has shifted to 48 hours or even 72 hours. As a byproduct of this policy change, according to Skift.com the occupancy rate rose 2% from 2016 and the hotel industry is forecasted to generate $2.7 million from fees in 2017. The correlation between shortened cancellation windows and increased occupancy rates alongside an inflation of revenue streams hints that this trend will snowball towards vacation rental cancellation policies.
Vacation rental cancellation policies are left up to the host and vary from 24 hours to 30 days prior to check-in. Airbnb and VRBO hosts have multiple cancellation policies to choose from that range from 1 to 60 days prior to check-in. SkyRun Vacation Rentals cancellation policies vary by location and generally require the cancellation to be at least 30 days prior to check-in.
From a business standpoint, shortening the time to cancel a reservation is financially beneficial. From a customer satisfaction standpoint, it may create mixed feelings. Either way, it is becoming clear why the hotel industry is embracing this vacation rental policy. So, when an industry trend is adopted, it's a likely indicator of a successful business tactic.