Smart Cancellation Policies: Support Today & Protect Tomorrow
Here are some tips for adventure companies on how to re-think, refine and communicate about your adventure company’s cancellation policies in the context of this unprecedented coronavirus pandemic that is disrupting us all on two fronts:
1) Human health – with varying levels of risk from mild to fatal (and that range can be within the same family)
2) Financial – with partial to total disruption of income earning abilities (from hourly workers to business owners.)
Let’s just pause to recognize that our individual and collective fear factor here could not be greater. Health and financial well being. These things support life as we humans know it.
In the midst of this, we can make clear-eyed and proactive assessments and decisions about how to move forward with cancellation policies that support our customers and our businesses. (And our staff, so that they have future trips to lead and operations to run.)
Our Cancellations Policy Goals Are To:
- Reassure Guests
- Demonstrate Warmth + Competency
- Share the Current Context for Your Company
Tell the story of what’s going on right now, what we have control over, and what we don’t.
- Frame Your Company within the larger Travel Industry
Help travelers understand that your policy is actually even more reasonable than standard, accepted global practices. Hint – use the airlines.
- Calmly Convey the Actual Impact of Postpone vs Refund
Let guests feel really good about how postponing their travel during the coronavirus epidemic “more than doubles their positive impact”, without any donations required.
- Postponement means: staff get paid, company doors stay open, lines of credit don’t blow up (beyond typical preseason levels), communities can pay rent/mortgages, AND guests STILL get the amazing adventure that they had booked, at a later, safer date.
- Help travelers realize that they could unwittingly cause the adventure company they love to go bankrupt. Instead of moving their trip to 2021, there could be no trip at all.
- Add facts: Adventure travel companies are small to mid-sized businesses with limited resources. 67% report they can’t survive more than 3 to 6 months without operating their trips or getting assistance. (Stats are pulled from this 3/19/20 America Outdoors survey)
- Create No-Fail System & Process for Documenting Postponed Trip “Vouchers”
- Get your accountant to help make sure these trips are reflected on your books and in your reservation system. This is unearned revenue and a liability for your company until the trip is completed.
- Work with your reservation system’s functionality or outside of it in an email program, to set up no-fail communications to these guests. Consider an automated email series to support maximum trust and loyalty for your guests, and let you sleep at night since your system and process will do all the heavy lifting:
- Series 1 Automated Email: confirming their postponed trip, and indicating whether or not they have a new booking date yet. If not, restate how long they have to decide on a new date.
- Series 2 Automated Email: A friendly reminder that their voucher is safely in your system, is valid for (1,2 or 3 years – your call) and you can’t wait to see them when they are ready to rebook. Be sure to send the reminder once a quarter. Remember: Warmth + Competency!
- Series 3 Automated Email: If you have an end date for their rescheduled trip, this reminder should go out several weeks or months before, depending on if its a day trip (easy to get to and plan) or a multi-day adventure (longer planning timeframe and maybe flights to buy. Pro tip: 2 months out on flights ideal, and 21 days out to still get best rates.)
- Spread Out Cash Flow Impact
Make sure your timeframe for postponed trips supports your cash flow – over 1 or 2 or even 3 years.
- For example: If you reschedule all your multi day, fully paid, postponed trips into a few months of 2021, – can your cash flow handle that? It may be better to move those trips out over several months and at least 2 years. You will know best what your company can handle.
- Another example: Group rafting trips in the spring. Can you handle all those groups with no revenue (if they are fully paid up at this time), and still pay your guide staff and rent next spring at this time? Better to get a mix of voucher groups and new paid groups, at any given time, and spread those groups across spring, summer and fall if possible.
- Preserve Cash
Minimize refunds to less than 10%. Why that number? Because specific goals enable specific results.
- Your % goal may be different. Aim for what you want, not what you think you can get.
- Why preserve cash? To stay in business.
- If coronavirus goes on longer than 3 months, many of us are in jeopardy of closing our doors.
- Optional: Educate about Trip Cancellation Insurance:
You may want to give guests information about trip cancellation insurance for multi day trips.
- This is an opportunity for a good blog post that demonstrates your warmth and competency with lessons learned by travelers from COVID-19, along with information on different travel insurance companies, and what insurance typically covers.
- “Cancellation for any reason” insurance is not typical, but is available for greater cost.
- In the case of the coronavirus, trip cancellation insurance did not cover guests who cancelled out of concerns, but before an actual trip was cancelled or flights were disrupted, etc.
- Some outfitters offer trip cancellation insurance for day trips, too, so customers can cancel easily and the company is protected. You might want to explore that for your company, if you don’t have it in place already. It’s a reassurance to guests and protection to your company.
Example Cancellations Policy Communication:
Below is a modified example of a customer communication we created for one of our international clients. It’s always easier to edit than write from a blank page – please feel free to adjust and edit this template for your company’s needs.
This communication can be used in four ways. This ensures maximum coverage to customers using various channels and even automates your Warmth + Competency response that works for you 24/7. This can help free up your staff to handle those customers who will want special exceptions or have more questions.
- Send out in a personalized email (first name personalized in subject line and/or body of email) to all booked customers.
- Add to a new website landing page – for booked customers.
- Link that landing page to a new FAQ post on Cancellations due to COVID-19 on your Facebook page.
- Create a new automated FB messenger response with a warm message and the link to your website landing page for detailed information.