How to Handle Guest Cancellation Requests and Refunds Related to the Coronavirus

In this article, I am addressing some of the issues we need to consider relating to COVID-19 guest cancellations and refunds.

The good news is, not all guests will cancel.  Depending on your area, some guests may choose to continue your vacation because it feels safer than staying in their own city.  Some just need the break and the reward outweighs the risk of coronavirus exposure.

These COVID-19 guest cancellations and refunds tips for vacation rentals will help you get a plan in place for handling the issues you may encounter.  Follow these tips to maintain great guest relationships, while also minimizing your financial impact.

For more Coronavirus tips for vacation rentals, read:  COVID-19 Coronavirus Tips for Vacation Rentals

Determine Ahead of Time How You Will Handle Coronavirus Refunds

Due to the social distancing recommendations and the numerous event/venue cancellations, most vacation rental owners will be facing guest cancellations. 

Obviously, vacation rental owners already have some version of a cancellation policy.  Do you plan to follow your normal cancellation policy or will you be doing something different?  

The voluminous human impact the coronavirus epidemic has is raising moral issues with sticking to a strict cancellation policy.  Some owners are choosing to deviate from their normal policy and are opting for a more lenient version.

So for coronavirus-related cancellations, It’s important to plan ahead with how you will be handling guest refunds.  Having a plan in place will allow you to respond more quickly with clear and concise instructions and options for your guest. 

You may also want to consider how you’ll handle cleaning fees.  Keep in mind that your cleaning service is going to take a financial hit from these cancellations as well.

For more tips on how to handle cleaning service issues during the Coronavirus epidemic, read:  COVID-19 Coronavirus Tips for Vacation Rentals

Coronavirus Cancellation and Refund Policies

If you are listed with one of the OTAs (Airbnb, Vrbo, etc.), your refund policy may be predetermined for you.  Policies are changing rapidly, so it’s important that you check your OTAs policy often (a few times per day) in order to stay up-to-date.

Airbnb

As of 03/14/20, Airbnb is providing a 100% refund to guests and has extended the eligible refund window for reservations through 04/14/20.

The owner has no option but to provide a 100% refund for these Airbnb guests, even though their cancellation policy may be more strict.

Vrbo

As of 03/14/20, Vrbo is recommending owners to refund 100%, but they have not yet made it a requirement.

The vacation rental owner still has the option of overriding the 100% refund recommendation and choosing a stricter refund policy. 

Note:  The option for changing the 100% recommendation to a stricter policy may be difficult to do on a cell-phone.  You may have to log-in from a computer to be able to see the option to change the refund amount.

Direct Bookings

For direct bookings, owners will have to decide how they handle the cancellations.  Some are choosing to refund, some are partially refunding, and others are not refunding at all. 

If you get frequent repeat guests, you may want to consider offering a more lenient cancellation policy and/or offer a larger refund.  This shows your VIP guests that you value their customer loyalty and helps strengthen your business relationship even further.

Keep in mind that guests will remember how they were treated.  And some will tell their friends and family of your thoughtful consideration during this time of need.  

You can treat someone hospitable even if you’re sticking by your strict cancellation policy.  Not all owners are choosing to issue refund, and that’s okay.  Each one of us has a different business model and financial plans.  As long as you show hospitality, concern, and consistency, your guests will likely understand and respect your policy decision.

We have chosen to share the financial burden with our guests.  You can see details of how we are handling refund in the section below.

Respond to Coronavirus Cancellation Requests Hospitably

Whether you’re sticking to your strict cancellation policy or offering a refund, it’s important to be courteous in responding to cancellation requests.

Keep in mind that your guests are concerned, confused, and disappointed with having to cancel.  At the least, extend an invitation for them to book again at a later date.

The components of a hospitable response to a cancellation inquiry or request may include the following:

1. Greeting using the guest’s name
2. Acknowledgement of your guest’s concern
3. A reminder of the benefits of not canceling, but postponing their vacation instead.
4. Current local coronavirus status, regulations, and closures.
5. Cleaning/property preparedness plan
6. How you are choosing to handle cancellations
7. Options for refunds and/or transfer of reservation to another time
8. Thank the guest for their business and offer to answer any additional questions
9. Include contact information

Following is my “canned” response to cancellation inquiries and requests.  Feel free to copy and edit my version to meet your needs.

Sample Coronavirus Cancellation Response:

Hi “Guest”,

Thank you for reaching out to us regarding your vacation.  We certainly share your concern about traveling during these uncertain and rapidly changing events.  I know it’s disappointing for you to consider cancelling your Smoky Mountain vacation.

At this time, Pigeon Forge, Gatlinburg, and Sevierville are asking guests not to visit the area.  Although there are no travel bans, the area officials are strongly recommending that everyone follow the “safer at home”/”shelter in place” guidelines. 

Many of our guests are choosing to postpone their reservations instead of canceling. 

However, we do understand if you feel more at ease with cancelling your reservation.

Normally, our cancellation policy does not provide a refund if the reservation is canceled less than three weeks before the arrival date. In addition, our guests have the option to purchase travel insurance during the booking process. However, due to the situation with the COVID-19 virus we want to be as accommodating and fair to our guests as possible. During this difficult time, we are offering our guests a couple of options in which we are sharing the financial burden. 

1. We understand if you decide to cancel your reservation. During this time, we are offering our guests a 50% refund (minus the $100 initial booking payment).
2. We’d love to have you as our guest, even if you can’t make the trip right now. We are offering our guests the option to transfer the reservation to later available dates through March 31, 2021. With this option, we will credit 75% of the current reservation (minus the $100 initial booking payment) towards the new dates. 

Our cleaning service provided us with these details: Neatly Maid values our guests and want you to know that we are closely monitoring the developments regarding the spread of coronavirus (COVID-19) especially in the areas we work. I know that our guests need to be educated about this virus and not to be fearful of their scheduled vacation. Our cleaning team is taking proactive measures in all our cabins for the health and safety of the guests and ourselves, thus implementing additional sanitizing practices in the high-use areas ( bathroom, door knobs, living room, dining area) just a few to name. 

Most of our cleaning products are Clorox based which readily eliminates existing germs from surfaces and frequently used areas. This outbreak should be taken seriously and modification to our daily hygiene should not be neglected. We all need to be vigilant and use common sense and not panic.

As always, we thank you for your business. We consider our guests to be part of our family. If you have any additional questions, please give me a call or email me.  

Blessings,

Connie Johnston

Check out this article for additional vacation rental tips for handling cleaning issues and other issues related to the coronavirus.

Other Ideas for Handling Coronavirus Cancellations and Refunds

We are all learning together as we navigate these rough coronavirus waters.  If you have additional ideas for handling COVID-19 guest cancellations refunds, I’d love to hear them.

Please leave your comments below or feel free to email me with any questions you may have.