Work out cancellation rate impact instantly with clear inputs, formula shown and shareable results.
The cost of cancellations is not the gross value cancelled but the portion that could not be resold. A high resale rate makes a high cancellation rate tolerable, which is why cancellation policy and lead time have to be considered together.
Cancellation rate
Rate % = Cancellations and no-shows / Bookings received x 100
Net loss
Net loss = Cancelled value x (1 - Resold share %)
It reduces cancellations but also reduces bookings, since flexible rates convert better. Test the trade-off rather than assuming.
Because online travel agents encourage speculative multiple bookings, whereas direct and corporate bookings are typically more committed.