Set up Smart Policies

Introduction

Smart Policies allow your property to define financial rules for guaranteeing reservations, collecting payments, and applying cancellation and no-show fees.

Once configured, Cloudbeds automatically follows these rules for eligible reservations, helping reduce manual work and maintain consistent payment and cancellation conditions across your property.

This guide explains how to create and configure Smart Policies, set a default policy, assign policies to rate plans, and review how policy information appears to staff and guests.

Before Getting Started

Before configuring Smart Policies, review the following requirements and limitations:

• Feature availability: Smart Policies must be enabled for your property.
• Eligible reservations: Smart Policies apply to direct reservations created through:
  • The Cloudbeds Booking Engine.
  • Manual reservations entered in Cloudbeds PMS.
• OTA reservations: Reservations received from online travel agencies continue to follow your existing Channel Deposit rules. Smart Policies do not replace OTA deposit settings.
• Channel Collect reservations: When the booking channel collects the payment, Smart Policy payment rules do not apply.

Set Up Your Smart Policies

Follow the steps below to create your Smart Policies, configure their financial rules, and assign them to the appropriate rate plans.

Step 1 - Access the Policies Configuration

1. Go to the Property page in the Settings menu.
2. Open the Policies tab.
3. Select Payment & Cancellation.

Step 2 - Create or Edit a Smart Policy

On the Payment & Cancellation page, choose how you want to configure your policy:

• Create a custom policy: Start from scratch by clicking .
• Edit a preconfigured policy template: Open the more-options menu next to the policy you want to modify.

The policy editor allows you to configure payment guarantees, remaining balances, cancellation conditions, no-show penalties, and additional information displayed to guests.

Configure the Payment Rules

In the Payment tab, configure the following:

1. Policy internal name: Enter a name that helps your team identify the policy.
2. Guarantee Method: Choose how the reservation is secured. Available methods include:
   • Charge an amount.
   • Authorize an amount.
   • Capture credit card details.
   • Do not collect a guarantee.
3. Remaining Balance Payment Plan: Define how and when any outstanding balance is handled. Depending on your configuration, you can charge an amount, authorize an amount, or collect payment manually.

Configure a Fixed Payment Amount

When using Charge amount or Authorize amount, the Amount dropdown determines how the prepayment is calculated.

• Fixed amount per night: The configured amount is multiplied by the number of accommodations and nights. This option was previously labeled Fixed amount; its calculation has not changed.
• Fixed amount per reservation: The configured amount applies once to the entire reservation, regardless of the number of accommodations, nights, or guests.

Example: You configure a $50 deposit for a reservation with two accommodations and three nights.

• With Fixed amount per reservation, the deposit remains $50.
• With Fixed amount per night, the calculated deposit is $300 ($50 x 2 accommodations x 3 nights).

To collect one flat deposit, select Fixed amount per reservation, enter the amount, and save the policy.

Include Taxes and Fees in the Remaining Balance

The Include taxes and fees checkbox does not change a Fixed amount per reservation prepayment. Instead, it determines whether applicable taxes and fees are included in a subsequent Remaining Balance rule.

Example: A reservation has a $100 subtotal and $65 in taxes and fees, for a total of $165. The table below shows how the fixed prepayment and remaining balance work together.

Configure the Cancellation Policy

In the Cancellation Policy tab, define the rules that determine how much a guest owes when canceling a reservation.

1. Select the cancellation type:
   • Non-refundable: Guests are charged 100% regardless of when they cancel.
   • Partially refundable: The amount charged depends on when the guest cancels.
   • Fully refundable: Guests can cancel for free within the period defined by the policy.
2. Configure cancellation windows and fee amounts: Define when each cancellation condition applies and the corresponding fee. You can configure up to three tiers in one policy.

Example: A cancellation policy could allow free cancellation until seven days before arrival, charge a 50% fee between seven and three days before arrival, and charge a 100% fee within three days of arrival.

The existing fixed penalty option is now labeled Fixed amount per reservation. Its calculation has not changed.

Configure the No-Show Policy

Under How do you handle no-shows?, choose how the no-show fee should be calculated.

• Same as cancellation policy: This is the default option. The no-show fee follows the applicable cancellation policy. Cloudbeds displays the amount that applies to a no-show and keeps it aligned when you update the cancellation terms.
• Custom amount: Configure a no-show fee independently from the cancellation policy. Available calculations include:
  • A percentage of the total.
  • Fixed amount per reservation (previously labeled Fixed amount).
  • The first night's price.

Configure Taxes and Fees

On the Cancellation tab, use the separate Taxes and fees cards to determine which taxes and fees may be included in cancellation and no-show penalties.

Configure the cancellation and no-show selections independently, even when the no-show amount follows the cancellation policy.

Choose one of the following options for each fee type:

• All applicable taxes and fees: Includes all taxes and fees that apply to the reservation and its booking source. If an applicable tax or fee is added to your property later, this option includes it automatically.
• A specific set: Select the taxes and fees you want to include. The selection remains fixed. If you add a new tax or fee later, return to the policy and select it if you want it included.
• None: Do not add taxes or fees to the cancellation or no-show penalty.

When a card is collapsed, it displays a summary of the selection, such as All taxes and fees collected, 5 of 10 collected, or Not collected. The policy summary reflects the same selection.

Understand How Taxes and Fees Are Calculated

The policy configuration determines which taxes and fees may be included in cancellation or no-show penalties. The final amount also depends on the reservation and its applicable settings.

• Booking source: A tax or fee is included only when it is also enabled for the reservation's booking source. Selecting it in a Smart Policy does not override booking-source restrictions.
• Current applicability: Deleted, disabled, or no-longer-applicable taxes and fees are excluded, even if they were previously selected in the policy.
• Existing reservations: Editing a policy does not change the policy assigned to reservations already booked. For those reservations, a specific tax and fee selection remains as it was when the reservation was booked. However, the All applicable taxes and fees option can include applicable taxes and fees added later.
• Tax rate changes: If a tax rate changes between booking and cancellation or no-show, Cloudbeds uses the rate in effect when the fee is posted.
• Policy Exceptions: When a date-based Smart Policy Exception applies, its tax and fee selection takes precedence over the standard policy's selection.

If a selected tax applies to a selected fee, both can be included when calculating a percentage-based or first-night cancellation or no-show penalty.

Taxes excluded from the policy are not added back to the base fee. Consequently, a percentage cancellation fee may be lower than the same percentage of the amount the guest originally paid.

Understand Tax and Fee Display and Automation

In the Cloudbeds Booking Engine, cancellation and no-show policy information includes a general plus applicable taxes and fees note. The exact tax and fee selection is available in the policy editor.

When a reservation has a connected payment gateway with full Smart Policy automation, the configuration indicates whether the cancellation or no-show fee will be posted to the folio.

Posting a fee to the folio and processing a card charge or refund are separate actions.

Add Additional Policy Information and Save

Use Additional Policy Information to provide any extra details you want guests to see in the Cloudbeds Booking Engine and confirmation emails.

Keep this information consistent with the configured payment, cancellation, and no-show rules. Additional text does not override the policy configuration. Any conditions that differ from the configured rules must be handled manually.

When you finish configuring the policy, click Save.

Step 3 - Set Your Default Smart Policy

Your default Smart Policy determines which rules apply when no other policy has been assigned.

Cloudbeds automatically applies the default policy to:

• Your Base Rate.
• Any rate plan without another Smart Policy assigned.

Set the Default Policy

1. Go to Settings > Property > Policies > Payment & Cancellation.
2. Locate the policy you want to use as the default.
3. Open the more-options menu next to the policy.
4. Select Make default.

Step 4 - Assign Policies to Your Rate Plans

If your property uses multiple rate plans, you can assign different Smart Policies to each one.

This allows you to apply different payment and cancellation conditions while retaining your default Smart Policy for rate plans without a separate assignment.

1. From the Cloudbeds main menu , open Rate Plans & Packages .
2. Find the rate plan you want to update.
3. Open its more-options menu and select the option to edit the rate plan.
4. Scroll to the Cancellation field, labeled Which cancellation policy do you want to set for this rate plan?
5. Select the Smart Policy you want to assign from the Policies dropdown.
6. Click Save.

Repeat these steps for any additional rate plans that require a different policy.

Step 5 - View Policies in Reservations and the Booking Engine

After configuring and assigning your policies, review how their conditions appear to staff and guests.

For Your Staff (Cloudbeds PMS)

When staff create a reservation in Cloudbeds PMS, the assigned Smart Policy name appears for each room and rate plan.

Staff can hover over the policy name to review a summary of:

• Guarantee rules.
• Remaining balance payment schedule.
• Cancellation conditions.
• No-show conditions.

For a Fixed amount per reservation prepayment, the payment schedule reflects the configured flat amount, subject to the reservation subtotal limit.

If the reservation's dates, number of nights, or accommodations change, Cloudbeds recalculates payments that have not yet been collected using the updated subtotal.

Payments already collected are not automatically changed or refunded.

If the guest cancels, the applicable cancellation policy determines whether the paid deposit is retained, refunded, or adjusted against the cancellation fee.

For Your Guests (Cloudbeds Booking Engine)

Guests can review the applicable payment and cancellation conditions when booking through the Cloudbeds Booking Engine.

Depending on the configured policy, guests see:

• Policy label: For example, Non-refundable or Fully refundable.
• Payment schedule: A breakdown of the applicable payment amounts and timing.
• Cancellation and no-show conditions: The applicable rules, deadlines, and penalties.
• Additional policy information: Any extra text entered in the policy configuration.

Cancellation and no-show information includes a general plus applicable taxes and fees note rather than listing the policy's exact tax and fee selection.

In Confirmation and Cancellation Emails

Cloudbeds automatically includes applicable Smart Policy information in confirmation and cancellation emails when the supported policy information is used in the email template.

This includes the applicable cancellation and no-show conditions. No changes to your email templates are required when using the supported policy information.

Step 6 - Review the Channel Deposit Configuration (Optional)

When Smart Policies are enabled, deposit settings for OTA reservations are managed separately from the policies applied to direct reservations.

You can review these settings in the Channel Deposit tab on the Policies page.

1. Go to Settings > Property > Policies.
2. Open the Channel Deposit tab.
3. Review the deposit settings that apply to reservations received from your connected channels.

If your property previously configured Channel Deposit rules, those settings remain unchanged when Smart Policies are enabled.

No additional changes are required unless you want to modify your existing Channel Deposit configuration.

Your Smart Policies are now configured and ready to use for eligible direct reservations. Before relying on them in daily operations, review the assigned policies and confirm that their payment and cancellation conditions match your property's intended rules.

Next Operational Step

Once your Smart Policies are configured and assigned, consider whether your property needs different cancellation conditions for specific dates, such as holidays, special events, or peak seasons.

If so, you can use Smart Policy Exceptions to apply date-specific rules without creating additional rate plans.

Learn more: Use Smart Policy Exceptions to Override Cancelation Policies for Specific Dates.