Cancel direct reservations

Juss Reyes

Updated October 03, 2024 16:10

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.

Step 1 - Settle cancellation

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 cancelled reservation

Inform your guests about your Property's Cancellation Policy, whether or not they will be charged when they cancel their reservation. Follow the instructions to set up Cancellation Policy: How to set up 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 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 fee
Click Add
The fee will be added to the folio (Cancellation fee) under the debit column and will affect balance due

After that, you can add the guest payment as necessary. Follow the instructions 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 cancelled within the free (flexible) cancellation period.

You can refund the deposit the same way you collected them:

Option 1 - Refund the deposit using the payment gateway

If you charged the guest 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 balance due equals to 0.00. Proceed to Step 2 below.

Step 2 - Change the reservation status to cancelled

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):
1. Confirm Cancellation
2. Cancel and Email Guest
3. 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 folio BUT will remain in the balance due.

You can check the date of cancellation by moving your mouse towards the Cancellation # field on the reservation details:

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.

Canceling reservations for a property that uses only the Cloudbeds Booking Engine

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 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 to create an internal process for cases like this, so your reception team know that the booking was cancelled.

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 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 cancelled with the payment already processed through the payment processor (gateway), it will be NOT automatically refunded. Cancelling 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.