Are Your Cancellation Fees Unreasonable?

Cancellation FeesLet’s face it, the nature of travel means that it’s quite common for travellers to have to change their travel bookings.  Yet there still seems to be some inflexible and ludicrous fees involved with making changes or cancellations – particularly with airlines.

One rather extreme example was discussed on Campbell Live.  This complaint involves someone who simply wanted to change the passenger name (not even cancel) with Emirates – because she had the foresight to get an early bird booking for a cheaper price she was faced with considerable fees to make the change. See the story video here.

How do you treat travellers who need to change or cancel their booking?  I’d suggest that in such a competitive environment where travellers have a choice and can complain online about unreasonable fees you should think twice about how strict your policies are.

For airlines I think that differentiating fares based on cancellation policies is a rather unfair approach – the passengers still all get the same service if sitting in the same class of travel, so shouldn’t price be differentiated based on service differentiation, lead time of booking, supply and demand, and value added components rather than something that leaves your customers vulnerable to the situation described in the Campbell Live story?

Yes you should be compensated for last minute cancellations where you can’t replace the booking but any situation where you won’t necessarily face revenue loss a more lenient approach should be taken.

Whatever decision you make can have a long term impact on your business reputation and repeat business which has the potential to cost you a lot more than the impact of a booking change.  What do you think?

2 Comments

  1. Ann-Marie April 14, 2010 at 2:46 pm #

    Yes they are ridiculous!

    I wanted to change a date for flights, and it was actually cheaper to go ahead and buy brand new flights. I didn’t cancel my first booking as I didn’t want the airline making even more money from another sold ticket!

  2. Motella April 22, 2010 at 12:05 am #

    We have a few simple rules about cancellation fees in our accommodation businesses.

    We hate charging these fees and will do everything in our power to avoid being put in this situation.

    If we are able, we will cherry pick and not take reservations from certain segments that have a higher risk of changing/canceling their travel plans last moment.

    We have done away with the strata of different cancellation windows according to season. We now have one simple, easy to understand cancellation window.

    Our policies are easily found on our websites etc and are disclosed to our guests. Using 3rd party booking engines makes this process very easy and transparent.

    If we are running short of rooms we will often ring/TXT a pending guest as a courtesy to reestablish arrangements on the day.

    The most important rule that we follow is that we try and take some responsibility on behalf of our guests AND this means that we hardly ever need to charge.

    For the consumer, booking travel should be easy, painless and stress free. For the operator, the long game always pays off in the end.

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