This article will show you the step-by-step to cancel direct reservations created from within the system (walk-in, phone, email, Cloudbeds Booking Engine) or manually added third party reservation (wholesaler, corporate client, offline travel agent, etc).
Important highlights
- Changing the reservation status to Cancelled does not automatically zero out the reservation balance due.
- The amount of pending transactions (charges scheduled for future dates) remaining in the balance due doesn't affect revenue reports.
- Cancelling the reservation does not automatically refund any payment processed for the guest.
Depending on your property's policy, there are different ways to settle the cancellation:
- Charge your guest for the cancellation
- Refund the deposit back to the guest for refundable reservations
- Zero out the balance due in the folio if you don't charge anything for a canceled reservation
Inform your guests about your Property's Cancellation Policy and whether or not they will be charged when they cancel their reservation. Follow the instructions to set up the Cancellation Policy: How to set up the Cancellation Policy.
1. Charge your guest for the cancellation
- There are 2 ways to add a charge for cancellation:
- Cancellation manual revenue (recommended)
- Cancellation fee
- Cancellation Revenue will be considered in reports as part of room revenue/RevPar, while cancellation fee will be considered as a separate item and won't be included in room revenue/RevPar.
A - Add a cancellation revenue
- Go to reservation folio and click Add Adjust/Charge
- Select Add Room Revenue
- Select revenue type (Cancellation) and fill in all the necessary information. You can also apply a tax/fee on top of this charge.
- Click Continue
- The charge will appear in the folio (Room Revenue - Cancellation) and will affect the balance due
After that, add the guest payment as necessary. Follow the instructions on How to Process Payment in Cloudbeds PMS.
B - Add a cancellation fee
Before getting started:
Create a fee on the Taxes and Fees page, and name it as Cancellation Fee. Learn how here: Create, edit, or delete taxes and fees.
- Once the Cancellation Fee is created, go to the corresponding reservation Folio
- Click Add Adjust/Charge
- Select Add Exclusive Tax/Fee
- Select Cancellation Fee and enter the amount of the fee
- Click Add
- The fee will be added to the folio (Cancellation fee) under the debit column and will affect the balance due
After that, you can add the guest payment as necessary. Follow the instructions on How to Process Payment in Cloudbeds PMS.
2. Refund the deposit
Your property may have a policy to return any collected deposit (payment) when the guest cancels within the free (flexible) cancellation period.
You can refund the deposit the same way you collected it:
Option 1 - Refund the deposit using the payment gateway
If you charged the guest's credit card using the payment processor, you can refund the payment by using the same method. Follow the step-by-step in this guide: How to Process Refund Through Payment Gateway.
Option 2 - Refund the deposit without using the payment gateway
If the deposit payment was not processed by using the payment processor but only recorded in the system, you shall refund it using the same method by following the instructions in this article: How to Add / Post Refund to Reservation as a Record (Without Using Payment Gateway Processing).
3. Zero out the balance due
Although the amount of pending transactions (charges scheduled for future dates) remaining in the balance due doesn't affect revenue reports, some properties prefer to zero the balance out so that their property staff is aware that the guest shouldn't pay for his stay since he cancelled the reservation.
- Amount of pending transactions (room rates) remaining in balance due won't affect the revenue reports.
- Amount of pending transactions (room rates) remaining in balance due will still be displayed when exporting reservations to file and in Account Balances report.
- If the reservation at any point was changed to In-house before it was Cancelled, any posted transactions including debit (charges) will remain in the folio and balance due.
- Open the reservation and go to the Accommodations tab
- In the Edit column ( ⋮ ), click Edit Price
- Put 0.00 as the price for all dates
- Click Save Updates
- Now, the balance due equals 0.00. Proceed to Step 2 below.
Important to note:
- If the room rate has a percentage tax/fee, the balance will go to zero after you cancel it.
- On the other hand, if the reservation has taxes/fees based on per room/per person, the balance won’t go to zero. However, there’s no need to worry. If you check the Folio, you will not see any pending or posted transactions. Therefore, the amount indicated as Balance Due will not appear in your reports.
- Open the reservation and change its status to Cancelled
- Click Continue and select how to proceed with the cancellation (whether you'd like to email the guest):
- Confirm Cancellation
- Cancel and Email Guest
- Cancel and Email Guest (without rates)
Edit the Cancellation email on the Email Templates settings.
- The reservation status will be updated accordingly. After confirming the cancellation:
- The reservation will disappear from the calendar.
- All pending transactions (charges scheduled for future dates) will be removed from the folio BUT will remain in the balance due.
- You can check the date of cancellation by moving your mouse toward the Cancellation # field on the reservation details:
- The amount of pending transactions (room rates) remaining in the balance due won't affect the revenue reports.
- Amount of pending transactions (room rates) remaining in balance due will still be displayed when exporting reservations to file and in Account Balances report.
- If the reservation at any point was changed to In-house before it was Cancelled, any posted transactions including debit (charges) will remain in the folio and balance due.
In case you are not using Cloudbeds PMS and have chosen to work with the Cloudbeds Booking Engine only (together with Cloudbeds channel manager or not) the cancellation process is different.
In this case, restrictions are applied, and you will not be able to change the status of a reservation to Cancelled. If you receive a cancellation request for a reservation that was imported through your website, you will have 2 options:
Option A: Add one extra room to the availability
- Go to the Availability Matrix, and find the period of the existing reservation and add one extra room available, i.e, if current availability is 0 , you will have to change to 1. If the current availability is 2, you will have to change it to 3.
- Double-check if it's correct and save it
Learn more about the Long Term Interval Settings here.
If you are not using any PMS, it is recommended you create an internal process for cases like this so your reception team knows that the booking was canceled.
- Since you are adding an extra room available, this will cause a fake overbooking because you are saying that you have more rooms available than your total inventory.
- Because of that, if you choose to work with option A, you will have to allow overbookings. Click here to learn more about the Allow overbooking option.
Option B: Delete the reservation
If you don't feel confident working with overbookings, to delete the reservation could be the option for you. Follow the steps described in this guide and remember double check the reservation details to make sure you will delete the correct one.
Important:
- By deleting the reservation, all the information related to that guest from your database will be lost, and it cannot be recovered.
- If a reservation is canceled with the payment already processed through the payment processor (gateway), it will not be automatically refunded. Canceling a reservation doesn't affect transactions that have been processed and posted in the folio, meaning that the posted transactions will remain there.
- Only scheduled payment (pending transaction) will be voided when the reservation is cancelled since the scheduled payment is not yet processed and posted in the folio.
Comments
Just needing to clarify the following statement :
point 3 says "any posted transactions including debit (charges) will remain in the folio and balance due." Can you confirm that even if a reservation status was changed to in house and then cancelled - the transactions charged will remain in the folio BUT WILL OR WILL NOT be included in financial reports.
point 1 would indicate that they are not included but point 3 is not clear ...
Thanks
Simon
Hello, Simon,
We have already created a ticket for you, so that our Support Team can take a closer look and offer dedicated assistance with this request.
Kind regards!
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