What are spread bookings?

It’s been a tough 12 months for many individuals and businesses, and the hospitality industry including B&Bs, has had a particularly rough time. Several lockdowns, lasting for months in the UK, have seen B&Bs having to shut their doors, invest heavily to reopen safely and then have to shut again.

As I write this, we are hopefully moving forward to the end of the 3rd lockdown in England. The current roadmap shows English B&Bs probably opening from 17th May. And the media are all predicting a boom in bookings and a bumper staycation summer. And fingers crossed that happens. 

But we’re also seeing reports of a phenomenon called spread booking. Potential guests book several properties, then decide at the  last minute which one to stay at, cancelling the others, leaving them empty with little chance of rebooking.

Tina Boden, Micro Business Specialist and Campaigner, is campaigning to raise awareness of the negative impact the spread booking has on the livelihoods and lives of small business owners. You can read Tina’s blog post here.

We have to hope that the message of how damaging this can be, to an industry already in crisis, will sink in with potential guests. But what else can we do as an industry to protect ourselves?

For this blog post, I went out to the Facebook Group for people who have taken my courses and asked how they are approaching this. I have kept the comments anonymous - in italics with quote marks. But have referenced everyone who didn’t  want to remain anonymous at the bottom. Thanks everyone!

Offering more flexibility

One of the side effects of the Lockdowns, and subsequent reopening, then closing again and uncertainty, has seen guests being, understandably, more nervous to book  and commit financially to a stay at a B&B.

For this reason, many B&Bs have offered much more flexibility to their guests, reducing their cancellation periods or having no penalty at all for cancellations.

This provides more flexibility to guests, who may be worried about losing their deposit if travel got curtailed again. But, in turn, puts the B&B at more risk of guests cancelling at the last minute.

What can B&Bs do to protect themselves from spread booking cancellations?

First all, I think there is no one ideal solution that suits everyone. It may well depend on your B&B, how big it is and where it’s located. You also need to ask yourself the following questions:

• Is it easy for you to fill a room last minute? 
• What’s the impact of cancellations on your business?
• What are other businesses doing in your area?
• How much repeat business do you have?
• How many nights are your bookings on average?
• How dependent are you on the Online Travel Agencies such as bookingdotcom?

You’ll need to do a risk analysis for your own business, and determine if spread booking is actually a problem for you. If it is an issue, how likely it is to happen and then decide what you need to do about it.

Using the Online Travel Agencies

Anecdotally - I have no data to back this up, just feedback from B&B owners - it would seem that last minute cancellations happen more with bookings made through the OTAs.

A couple of years ago I did see a statistic that, for accommodation offering completely flexible cancellation, the average cancellation rate on the OTAs was about 50%

For this reason, quite a few B&B owners I know offer different terms on the OTAs, such as non refundable balances paid in full at time of booking. This will most likely mean a reduction in the number of bookings through the OTAs, but also protects against the 50% of potential guest that were most likely to cancel anyway.

Some B&Bs have decided to take themselves off the OTAs completely.

“In normal times it was the first night as a deposit, that was up to 14 day refundable.

With OTAs it was always non refundable on any booking, and I took the whole payment then. The cost on OTAs was always £10 per night more than direct, but we've now removed ourselves from OTAs completely, so we'll see how that goes…”

Have a cancellation policy

Whatever you decide, it’s important that you have an up to date cancellation policy, made clear to guests before you agree to their booking.

It’s recommended that this cancellation policy is included in your booking terms and conditions, which guests should agree to on booking.

Make sure that, if you change your cancellation policy, you have updated it on your website, your booking engine and on the OTAs.

You can find full details of the english  rules surrounding cancellations and no shows here.

Taking a deposit

At my own B&B, I have nearly always taken a deposit for the first night’s stay for new guests. This is refundable up to 7 days before the booking commenced. 

Some B&Bs take a deposit when booked direct, but offer a different cancellation period:

“One night deposit or at present usually £100, refundable in line with cancellation policy of 4pm one day prior to arrival. OTAs are nonrefundable and exclude breakfast”

Before I took a deposit, in the very early days of running a B&B, before online booking and credit card machines, I used to see more last minute cancellations and no shows. The nature of the business round here means very few last minute bookings.

As a 2 room B&B, a last minute cancellation puts a hefty dent in my turnover. And the deposit acted as a deterrent to those few guests who weren’t that serious about staying.

When lockdown was announced, probably the most painful part financially  was returning deposits. Some guests were happy to carry deposits forward to a future stay but some asked for a refund.

“I don’t take deposits now - did take 10% but got too complicated with refunds. Now have a 7 day cancellation policy. Yet to see how that works in practice but stripe does flag problem cards”

Before COVID, I’d also put in a place a non refundable full payment option for a slightly lower price. This was surprisingly popular with guests. Many people said that they liked to get the payment out of the way. Of course, these had to be refunded as well.

If you take a deposit, then you will need to decide how much it will be for and at what point it becomes non refundable.

Will it be for the first night of the stay or a percentage of the booking?

Will it be fully or partially refundable before the stay?

Pre authorising cards

Apart from taking a deposit, one option is to take the guests’ credit card details and pre authorise their card. Only charging it if they cancel within any cancellation period you have.

Or pre authorising the guests’ card details and charging the full balance a set period of time before the stay - e.g. 7 days before the guests are due to stay.

“We don’t take deposits any more as we always felt like the guests were staying for free and we’d already spent the money. So now we take credit card details to secure the booking and pre authorise it 1 week prior to arrival (our cancellation period).”

“We have a cancellation policy of 3 days before arrival, we don’t take deposits but may pre authorise cards, Stripe usually flags up if there is incomplete card details as well. Prior to the pandemic we would have taken deposits or non refundable bookings - when things settle down we will probably go back to non refundable on OTA’s.”

Storing Card Details Safely

If you are storing guests’ card details you need to do this in a PCI DSS compliant way. Storing card details via your online booking system is usually the simplest and safest way of doing this.

Conclusion

I hope you found this blog post useful. I think as B&Bs we need to take a 2 pronged approach; 

• Raising the awareness of the impact of spread booking on small businesses and
• Identifying what we can to protect our businesses without putting guests off from booking

We also  need to continue to monitor the situation and adapt our policies as necessary. 

B&B Owner Quotes 

Here are the comments from the members of the Facebook Group. Many thanks to everyone for taking the time to feedback.

I’ve left the typos and grammar errors in there - bear in mind these are quickly written facebook comments!

“We are currently not taking deposits but ask for payment one week before whilst there is so much uncertainty. BC seem to have their own agenda and overrun what you put. Pre Covid it was first night as deposit.”

“We don’t take deposits any more as we always felt like the guests were staying for free and we’d already spent the money

So now we take credit card details to secure the booking and pre authorise it 1 week prior to arrival (our cancellation period).”

“In normal times, at times of booking I take a deposit for the value of 1st night of stay. That deposit is refundable as long as the guest cancels 35 days before they are due to check in. The balance is due 48 hours prior to check in.

In COVID times I wasn’t taking a deposit to encourage bookings. But then after Boris’s roadmap announcement I contacted all pre booked guests to ask for a deposit (same as before, 1 night), and asking everyone to please confirm their plans to stay with us. This helped me weed out the spread bookers.

In the event of lockdown being extended, I will refund all deposits.

I always stick by my 35 day cancellation period because although it feels long, it gives me the best chance of re-booking the room.

(All our bookings are direct now so I’m not worrying about dealing with OTAs).”

“We have a cancellation policy of 3 days before arrival, we don’t take deposits but may pre authorise cards, Stripe usually flags up if there is incomplete card details as well. Prior to the pandemic we would have taken deposits or non refundable bookings - when things settle down we will probably go back to non refundable on OTA’s. French bookers don’t particularly do the multiple bookings, for them making a booking is seen as a pledge, I often take bookings by text, phone and don’t request card details, their word is usually good enough and they are suspicious of giving card information on the phone.”

“I stopped taking deposits due to COVID, but I have started again now. 0ne night’s stay at time of booking. Refundable up until 2 weeks before arrival date, but not after that.”

“I'm not taking deposits until 3 days before arrival now. It was 5 days last year after cv19, but changed it to 3 when there were changes to tiers. I may change that back to 5, once I see how the opening up is going.

In normal times it was first night as deposit, that was up to 14 day refundable.

With OTA it was always non refundable on any booking, and I took the whole payment then. The cost on OTAs was always £10 per night more than direct, but we've now removed ourselves from OTAs completely, so we'll see how that goes…”

“I don’t take deposits now - did take 10% but got too complicated with refunds. Now have 7 day cancellation policy. Yet to see how that works in practice but stripe does flag problem cards”

“Currently not taking deposits. 48 hours cancellation atm. I’ve blocked off OTAs until August and may extend that

We don’t take deposits but do pre-authorise cards. 7 day cancellation at the moment when we take the first night. In theory we would charge the full stay if cancelled within 24 hrs of check in or no show but we’ve never had to. Monitoring very closely with the potential for spread booking/ holiday hogs”

“In normal times we offer free cancellation 15 days or more before arrival, don’t take a deposit on booking but pre authorise first nights payment 14 days before arrival and charge first nights stay if cancelled 14-3 days before arrival and full booking cost if cancel with 2 or less days notice. We are essentially still doing the same but being flexible due to circumstances and carrying bookings forward etc.”

“We don’t take deposits anymore. If booked through b-con it’s non refundable. If booked direct it’s cancel up to 14 days before arrival. We take payment 14 days before arrival.”

“We've never taken deposits. We have free cancellation up to 14 days before check in. We then pre authorise (for the full amount) the card given at the time of booking and take full payment at check in. This gives us enough time to rebook the room if there is a problem with the card and also offers the booker a degree of flexibility.”

“We just don't take deposits, never felt comfortable taking them, found it a pain on the accounting front and with the advent of on line bookings and taking card details with T&C for No show events I just don't feel the need on direct bookings. Terms on B.con bookings are very different. Also it was sort of the thing that kept me sane last year...not having to refund deposits...we only had 2 bookings in March with pre pay b.con cards where they carried the booking on (both sets staying when we did open) and another No Show where the guy had "forgotten about the booking" so agreed to hold it against a stay this year (that was in October when the chaos of tiers commenced here - Scotland).”

“We take the whole amount the day of arrival, keeps it simple, before Covid offered a reduced pay in full at time of booking non-refundable rate.”

“At the moment we’re taking a one-night deposit for new bookings (online or by phone) but if repeat guests phone us to book we won’t take a deposit. Our terms currently state that deposits are fully refundable except in the case of a no-show.”

“We've never taken deposits unless the booking is worth over £500, in which case we take 10% non-refundable. We sometimes get guests who want to pay up front, typically companies paying for staff, but not often. We feel it keeps things simple and means we never have to faff around with refunds.”

“One night deposit or at present usually £100, refundable in line with cancellation policy of 4pm one day prior to arrival. OTAs are nonrefundable and exclude breakfast”

“We take card details and process full payment 5 days before arrival. If in 'uncertain time' with news on changes to lockdown expected, take full payment during stay after a phone call 5 days before to see what they are thinking of doing..... not been an issue at all.”

“Booking system still automatically takes 1st night as deposit, which we would return without quibble, regulars who telephone don’t pay deposit, and Otas we charge full booking amount....deposit requirements clearly shown so no one would want to spread book #hopefully ....with refunds work on under promise, over deliver x”

“Presently we are not taking deposits. Before the pandemic we asked for a £25 per room per night deposit. Our cancellation policy stated that if a cancellation was made within seven days of arrival, the deposit would not be refunded but we would offer to move the booking to a future date.”

Thank you to the following B&B owners for contributing to this post:

Catriona Haskell Ward Millburn bed and breakfast

Brian Crosse Merrydale Guest House

Teri Baker Exmoor House Bed and Breakfast

Julia La Vielle Maison dAurin

Isabel Barnard The Old Rectory

Fiona Elise Potts Gwaenynog Farmhouse Bed and Breakfast 

Julie Dell Morlea Bed and Breakfast

Ziz Coltart Sheriff Lodge Bed and Breakfast

Chris Rinder Fossil Tree Hotel 

Colin Pratt Weatherdene Guesthouse

Wayne H Jones No. 27 Brighton

Fiona Dodds The Rumblie

Alistair Levie Haven House 

Clare Wright The School House B&B

Mark Lardner Crossways Guest House

Robert Stone The Bay Tree Hotel

Caroline Howarth The Mount

Debbie Fraser Walford Court B&B

Steph Hollier Spurwing Guesthouse