Set up Smart Policies

Smart Policies allow your property to define clear financial rules for guaranteeing reservations, collecting payments, and applying cancellation and no-show fees. Once configured, Cloudbeds automatically follows these rules for eligible reservations, reducing manual work and improving consistency across your operations. You can assign policies to multiple rate plans at once using bulk actions and preview policy details in real time while configuring rate plans. Learn in this guide how to configure your Smart Policies.

Before Getting Started

• Smart Policies must be enabled for your account. 
  • Reach out to our support team if you're interested in this feature.
• Smart Policies apply to direct reservations created through:
  • The Cloudbeds Booking Engine, and
  • Manual reservations entered in the PMS.
• Reservations received from OTAs continue to use your existing Channel Deposit rules. Smart Policies do not replace OTA deposit settings. 

Set up your Smart Policies

Step 1 - Access the Policies Configuration

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

Step 2 - Create a Custom Policy or Edit Policy Templates

In the Payment and Cancellation page, choose if you want to:

4. Create a custom policy from scratch by clicking
5. Edit a pre-configured policy template as you prefer in the menu

In the Payment tab, configure:

6. Fill out the Policy internal name
7. The Guarantee Method: how the booking is secured (charge amount, authorize only, capture the credit-card details, or don't collect guarantee).
8. The Remaining Balance Payment Plan: how and when the rest of the balance (if any) is collected (charge amount, authorize or collect manually).

All scheduled automations are processed at 12:00 AM (midnight) in the property’s local time zone.

Configure the cancellation policy

In the Cancellation Policy tab, configure the rules that determine the amount a guest owes when a reservation is canceled.

9. 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.
10. Set the cancellation windows and fee amounts. You can configure up to three tiers in one policy. For example, cancellation might be free until seven days before arrival, incur a 50% fee between seven and three days before arrival, and incur a 100% fee within three days of arrival.

Configure the no-show policy

Under How do you handle no-shows?, choose one of the following:

• Same as cancellation policy: This is the default option. The no-show fee follows the applicable cancellation policy. Cloudbeds displays the amount that will apply to a no-show and keeps it aligned if you update the cancellation terms.
• Custom amount: Set a no-show fee independently from the cancellation policy. You can configure the fee as:
  • A percentage of the total;
  • A fixed amount; or
  • The first night's price.

Configure taxes and fees

On the Cancellation tab, use the separate Taxes and fees cards for cancellation and no-show fees. Choose one option for each:

• All applicable taxes and fees: Includes every tax and fee that applies to the reservation and its booking source. If you add an applicable tax or fee to your property later, this option includes it automatically.
• A specific set: Select the taxes and fees you want to include. This selection stays fixed. If you add a new tax or fee to your property, 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 fee.

Set the cancellation and no-show options separately, even if the no-show amount follows the cancellation policy. When you collapse a card, it shows a summary such as All taxes and fees collected, 5 of 10 collected, or Not collected. The policy summary shows the same selection.

The policy selection controls which taxes and fees may be included in the cancellation or no-show fee. The final amount also depends on the reservation:

• Booking source: A tax or fee is included only if it is also enabled for the reservation's booking source. Selecting it in the policy cannot add a charge that the source does not allow.
• Current applicability: Taxes and fees that have been deleted, turned off, or no longer apply to the reservation are left out, even if they were selected in the policy.
• Existing reservations: Editing a policy does not change the policy assigned to reservations already booked. For those reservations, a specific set stays as it was when they booked. The All applicable taxes and fees option can include applicable taxes and fees added later.
• Tax rates: If a tax rate changes between booking and cancellation or no-show, the rate in effect when the fee posts is used.
• Policy Exceptions: If a date-based policy exception applies, its tax and fee selection is used instead of the standard policy's selection.

If a selected tax is configured to apply to a selected fee, both can be included when calculating a percentage or first-night cancellation or no-show fee. Taxes you leave out are not added back into the base fee. As a result, a percentage cancellation fee may be less than that percentage of the amount the guest originally paid.

On the Booking Engine, guests see a general plus applicable taxes and fees note with cancellation and no-show policy information. The exact selection is shown 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 the fee and processing a card charge or refund are separate actions.

Add any Additional Policy Information you want guests to see on the Booking Engine and in confirmation emails. Text that does not match the configured policy rules must be handled manually; it does not override those rules.

Save your changes.

Step 3 - Set your Default Smart Policy

Your default Smart Policy will be applied automatically to:

• Your Base Rate, and
• Any rate plan that does not have another policy assigned.

Best Practice: It is recommended that you choose the policy that is the most commonly used at your property. 

• You can change your default policy at any time.

To set the default policy:

1. Locate the policy you want to set as your default in the Policies Payment & Cancellation tab
2. Open the menu next to the policy
3. Select Make default.

Step 4 - Assign Policies to your Rate Plans

If you have multiple rate plans, you can assign different Smart Policies to each one.

1. Access the Rate Plans & Packages page in the main Cloudbeds menu
2. Search for the rate plan you want to update and click to edit it in the side menu .
3. Scroll down to the Cancellation field (Which cancellation policy do you want to set for this rate plan?) and select the Policy you want to assign from the Policies dropdown.
4. Click to Save.

Repeat the same steps for any additional rate plans requiring a different policy.

If you need different policies for specific dates (such as holidays or peak seasons), you can use Smart Policy Exceptions instead of creating additional rate plans. Check Use Smart Policy Exceptions to Override Cancelation Policies for Specific Dates for more details.

Step 5 – Viewing Policies in Reservations and on the Booking Engine

For your staff (PMS)

• When creating a reservation, the policy name is displayed on each room/rate plan.
• Staff can hover over the policy name to view a simple summary of:
  • Guarantee rules
  • Remaining balance schedule
  • Cancellation details
  • No-show details

For your guests (Booking Engine)

Guests will see:

• A policy label such as Non-refundable or Fully refundable;
• A full breakdown of the payment schedule;
• Cancellation rules, applicable no-show terms, and any additional information you added. Cancellation and no-show policies show a general plus applicable taxes and fees note rather than the policy's exact tax and fee selection.

In confirmation and cancellation emails:

Cloudbeds automatically includes the applicable Smart Policy information using the supported policy information in the email template. This includes the applicable cancellation and no-show terms. No updates to your email templates are required when using the supported policy information.

Step 6 - Review the Channel Deposit configuration (optional)

After enabling the Smart Policies feature, your channel deposit settings will be split from the policies applied to direct reservations. 

• You can view and set them up in the new Channel Deposit tab available in the Policies page. 
• If you had previously defined channel deposit settings, no changes are required in this page, and your existing payment processing configurations for OTAs will remain unchanged.

Your Smart Policies are set and ready to use.