Non-refundable rate: how to price it and set it up

Booking.com describes it as a rate on which guests pay the full price if they cancel, make changes or don't show up. Expedia's non-refundable policy charges travellers who cancel at any time, no-shows included, the whole booking amount.

• A flexible rate: free cancellation until a deadline, at the higher price.
• A partly refundable rate: a fee, such as the first night, if the guest cancels after the deadline.
• A non-refundable rate: no refund at any time, at the lower price.

Booking.com notes that guests who book far ahead often want the freedom to change their plans, while those booking close to their stay care more about price and are readier to commit. A non-refundable rate is for the second kind, offered beside a flexible one.

There is no one right discount. Set it against what late cancellations cost you on your flexible rate: rooms released too late to resell, and nights left empty.

Use your own figures: count how many flexible bookings were cancelled after the date you could still resell the room, over the last few months, season by season.

1. 1On Booking.com, first create the policy: sign in to the extranet, go to “Property”, then “Reservation policies”, click “Create new cancellation policy”, choose no free cancellation, and save.
2. 2Then the rate plan: go to “Rates & Availability”, then “Rate Plans”, click “Add a new rate plan”, and under “Non-refundable” click “Add rate plan”.
3. 3Answer the short list of questions, click “Review”, then “Activate rate plan”.
4. 4Add prices and open dates for it in the calendar: Booking.com says a new rate plan may not be bookable until you do.
5. 5If you use a channel manager, map the new rate plan there too.

On Expedia, go to “Rooms and rates”, then “Cancellation Policies”, create a non-refundable policy and attach it to at least one rate plan. Expedia links a standalone non-refundable rate plan to its standalone rate plan automatically, so its price follows the main one.

• Booking.com charges commission on non-refundable and partly refundable bookings whether or not the guest stays.
• If you choose to waive the fee for a guest who can't come, Booking.com charges no commission on it; mark a no-show in the extranet within 48 hours of check-out for this.
• Agoda says a hotel pays its compensation when it charges a guest for a non-refundable or partly refundable booking, and nothing when it waives the fee.
• Collect the money the rate promises: Booking.com's prepayment policies let a hotel charge part or all of a booking before arrival, and a card that fails can be marked invalid, so the guest is asked for new details.

Booking.com lets hotels allow one date change on non-refundable bookings, to dates of the same or a higher price, with the booking's conditions unchanged. Turn it on under “Property”, then “Policies”, then “Date changes for non-refundable bookings”, and limit how close to check-in a change can be made, three, five or seven days, or block dates.

If a guest asks to cancel and you agree to refund them, use “Request to cancel reservation” in the extranet: Booking.com says it cancels the booking free of charge with zero commission, and that it works up to 48 hours before check-in.

• Offer it beside a flexible rate, not instead of one. Booking.com suggests starting with one flexible and one non-refundable plan.
• Keep the gap small enough that guests who need flexibility still book the flexible rate.
• On nights that sell out anyway, a deep discount gives money away.
• On Google, a rate is marked refundable only if it meets Google's rules: a full refund, taxes and fees included, to the original payment method, with the deadline shown on the booking page.
• Say plainly on your own booking page that the rate can't be refunded, so guests choose it knowingly.