Listing sites like Airbnb encourage Property Managers to offer more lenient cancellation policies by incentivizing them with lower host fees and the promise of more bookings. Unfortunately, most Property Managers have fixed contracts with their owners that lock them into cancellation policies that include penalty fees for last-minute cancellations.
Which poses the questions:
- Does offering more lenient cancellation policies really get you more bookings?
- If so, how does that affect cancellation rates?
- Is the increase in bookings worth the penalty fees to owners in the event of a last minute cancellation?
Leavetown COO, Emmanuel Lavoie will present data collected from over 13,000 Airbnb listings to answer your questions about whether or not adjusting cancellation policies affects your conversion ratios for the better.
The effect of cancellation policies will be explored from two angles:
- Conversion: The platforms tell us that relaxing cancellation policies will lead to a higher conversion and more bookings. We explore this assumption by looking at both the “Search to View” (listing appearance in Search) and “View to Book” (how many guests book after looking at the listing) metrics
- Host-Fee Analysis: Airbnb charges a different host fee based on the cancellation policy of the listing. Listings with a Super Strict 30 or Super Strict 60 policy are charged a 5% host fee whereas listings with Strict With Grace (14 days), Moderate or Flexible are charged a 3% host fee. When all cancellations are factored in, is there more money to be made by exploiting that 2% gap?
During this webinar we will uncover:
- Do more lenient cancellation policies really get you more bookings?
- Will the increase in bookings from a more guest-friendly cancellation policy pay for the increase in owner payments outside of the contracted cancellation policies?
- Is it worth bridging the gap between owner contracts and the desire to be more guest friendly on Airbnb?
- What is the median time between guest-initiated cancellation and booking check-in date by Cancellation Policy type and how can this help us pick the best cancellation policy for our benefit?