Hotel No Show: Causes, Impacts, and Solutions

It's a Thursday evening when your hotel management software buzzes with confirmed reservations.

To your surprise, on the same day, you noticed that 3 guests had ghosted you for no reason. They didn’t come up or inform you about their cancellation plan.

This last-minute disappearance hit hard: disappointed staff, lost revenue, and shrinking profits.

But you’re not alone. Other hoteliers are also facing a similar issue of growing hotel No shows.

Even research backs this up by saying that the no-show rate for hotels ranges between 1-5%. Infact, it has become a COMMON challenge for hoteliers who struggle to maintain their occupancy level and recover revenue lost from these NO SHOW guests.

This guide is about what no show in the hotel is, it's possible causes, and how you can handle them.

What is hotel no show?

No show in hotels occurs when a guest neither appears at the hotel nor cancels the reservation. It means that the guests didn’t arrive on the check-in date.

It’s like throwing a party for an occasion and at least half of your guests don’t come. Isn’t it frustrating enough?

Shocking for hotels as well.

This is different from WASH DOWN where you experience a reduction in the number of bookings made. However, no shows are quite common with leisure or individual bookings as against a group booking.

One research study states that when the number of hotels with noshows is multiplied by the average room rate, then it brings significant losses to them ($50 to $100 million) per year.

Usually, hotel no shows occur when there is a change in traveler plan, travel disruption or guests simply forget about the trip, they might get the best deal closer to the date of stay.

No shows represent the lost revenue or opportunities that a hotelier might face. In addition, it creates a challenge for them to manage room allocation and availability.

According to Zonal’s GO technology report, around 5000 British adults were surveyed -

When asked, one of the guests surveyed said that one reason for not arriving was primarily because the hotel was expensive.

Hence, it becomes a headache for the hotelier as they have to struggle in terms of loss of revenue, face reputational damage, and how to increase their occupancy rate.

What are the causes of hotel no shows?

There are different reasons that explain why no show in hoteloccurs-

• Often, it happens when the guests change their plans because of any reason or an unforeseen circumstance such as sudden illness, work commitment, or a delay in flight arrangement.
• Sometimes travelers get a better stay option at different hotels that too at cost-effective rates. They would go for a better option.
• Travelers have opted for the wrong reservation date and day when booking online as they were in a hurry.
• There might be a case when guests overbook for the same day because they simply forget about the past reservation.
• A lack of communication between guests and travel agents can result in a hotel noshow. Sometimes guests forget about informing them and at times they don’t realize that there is a need to contact the service provider.
• The absence of the no-show charge policy doesn’t bother guests informing the hotel staff about changes in travel arrangements.

According to hospitality.net, there are several reasons that are responsible for no show in hotels including -

• 9% of guests decided to stay inside their houses 
• 8% forget about the booking 
• 5% of guests didn’t show up because of lack of babysitters 
• 6% of guests didn’t come back because there was no dog sitter 

Furthermore, Zonal GO technology research states that you can’t blame guests every time they don’t show up. The research backs this up by saying that these guests are generally high spenders and are frequent visitors.

Impact of no show on hotels

When guests don’t show up on the reservation date, the hotelier faces several issues which are as given below-

1. Loss of revenue

Every lost booking result in revenue loss during PEAK season or a major event planned near the accommodation.

Such no show in hotels happens when guests change their travel plan, any personal emergency arises, or they might get a better accommodation option. As a result, it affects the hotel’s revenue and impacts their profitability.

2. Wastage of resources

Hotel Noshow results in wastage of resources. During a peak season, hotel owners notice that guest demand increases. So, they will prepare the resources accordingly such as allocating extra staff, meal preparation, or any other services.

To their surprise when guests don’t appear, it results in wastage of food and other resources.

As a guest doesn’t appear on the confirmed date, it results in inefficient utilization of resources such as understaffing during the period of high demand and overstaffing during low demand. 

3. Affects the staff morale

The impact of No show in hotels is not only in terms of revenue and profit margins, but it also affects the morale of staff.

Imagine the time your hotel staff invested in preparing everything for one guest who didn’t show up. It means their time is not valued, which affects their efficiency level. Thus, it makes them less productive than ever. 

Ways to handle hotel no show

Here are a few strategies for reducing the hotel No show -

1. Keeping a non-refundable deposit or charging a NO show fee

When you keep a deposit or implement a No-show fee, guests are more likely to show up on the confirmed date.

However, if they feel that any emergency or personal commitments arise, then they can either notify the hotel staff if they have a late arrival or cancel their reservation in advance.

Generally, hoteliers charge a certain percentage of the total reservation amount, so guests take their reservation seriously.

By charging a no show fee, hotels can recover some portion of their lost revenue which won’timpact their cash flow.

Khurram Mir, The Cofounder and Chief Marketing Officer at Kualitatem found that there were instances when the income of hotels was affected due to last minute cancellations or sudden changes in guests' plans.

The best way to deal with hotel no shows is by enforcing a pre-payment procedure, meaning providing flexible cancellation choices to guests or offering discounts on non-refundable reservations. Another way is to offer incentives to guests for confirmed reservations.

2. Create a strict cancellation policy

While personal emergencies and unforeseen circumstances push guests into a situation where they have to cancel their reservation plan. If your hotel has a non-refundable cancellation policy, notify your guests at the time of booking.

A clear communication of booking policies ensures that guests can plan their trip accordingly and if any personal emergency arises, they will notify the staff before the check-in date.

All the arrivals, whether it’s individual bookings or group bookings, have to be confirmed before the guest’s arrival.

For Instance – Quality Beach Resort and SPA Patong have a cancellation policy in which if the guest doesn’t appear on the check-in date, all the bookings are NON-REFUNDABLE.

They will not consider guest emergencies, changes in schedule, or weather conditions. They even set the duration before which they need to inform the hotel staff about any cancellation plan such as-

• During low season, if guests cancel the booking less than 72 hrs. before their arrival date, they will incur the cancellation expenses of their first night rates. 
• During high season, guests must inform the hotel staff 7 days before arrival, otherwise a one-night full cancellation fee will be charged.

Klaus Niederacher, the Managing Director at Seekda says that there were instances when he observed that guests forgot about their bookings, and they didn't even bother about the value of confirmed reservations.

So, he adopted a CLEAR cancellation policy to reduce hotel no-shows. He reminded guests about their reservations when the dates started approaching.

He offered flexible options to guests for modifications or cancellations so that guests could communicate the same to the hotel and its staff. By keeping things simple for their guests, they were able to avoid no-shows.

3. Send regular reminders to your guests

There are chances that guests might forget about their reservations so the best way to manage hotel no shows is by sending customized messages to them including day reminders and pre-arrival reminders.

Invest in hotel management software to send regular reminders to your guests in the form of e-mails, text messages, or push notifications.

For instance – BOTSHOT’s eFrontDesk is a contactless check-in and check-out solution that sends regular pre-arrival reminders to guests, so they won’t forget about their booking date.

These reminders should specify information to guests about the check-in date, time, location of the hotel, and any cancellation charges. Once guests confirm their arrival, the hotelier can plan their room allocation accordingly.

4. Create an overbooking strategy

Creating an overbooking strategy is another way to manage hotel no shows. Here, you will intentionally show that you have sold more rooms than are available. You do smart forecasting by considering factors like seasonal demand and customer habits.

This way, you can have more guests in a day, and you won’t have to think about if certain guests disappear on the arrival date.

At the same time, you need to be careful when more guests arrive in a day, and you dissatisfy them as there are no available rooms.

Wrapping up

For hotels and resort owners, hotel no shows can be a real challenge resulting in wastage of revenue and resources. It HAUNTS you for a while when a guest makes a reservation, neither do they arrive, nor do they inform you about the possible reason behind the cancellation.

One of the best ways to prevent a hotel no show is creating a non-refundable booking option or charging a cancellation fee,so guests won't make casual reservations.

So, the next time you face a hotel no-show scenario, you will know the exact strategies to manage it. Guests should be encouraged to confirm their reservations before they check-in.

In addition, you can take a quick follow-up with your guests asking them about the reason for cancellation and why they had to switch their plans. This way, you can stay on top of your guests' minds and fine-tune your offerings.