Best Payment & Refund Structure for taking Direct Booking 6-9+ months in advance?

Question

Hi.

I'm still in my first year as a STR owner, and I'm going to start taking bookings for next spring/summer/fall for our lake house. This past summer (our first season) we had many multi-generational family reunions book stays. Our house is one of the larger lake homes in the area so it caters to large groups.

With that said, my goal with advance booking is to bring-in a decent amount of revenue during the offseason (winter), but don't want to scare anyone away with a large initial deposit, and of course I'd like to discourage cancellations. We currently take bookings on Vrbo, AirBNB, and Direct. But I'm hoping to lead guests to book Direct as much as possible so the OTA's can't sit on the deposits for months! We've been working to build up our FB page and email list (Stayfi user) in order to bring people directly to our site.

I'd love to hear any advice on how other hosts in similar situations do this! Specifically, what is your advanced payment structure and refund policy when taking bookings 6-9 months out or further...and also how do you encourage Direct Bookings?

Thanks!

Nathan Gesner · Answer

There are many ways to skin this cat.

I require 50% at the time of booking. We require the remainder two weeks prior to check-in.

If they cancel more than 30 days before check-in, I keep a $100 processing fee and refund the remainder.

If they cancel 15-30 days before check-in, I keep the 50% they put down.

If they cancel within 14 days of check-in, then I put the rental back on the market and try to fill those days. The original guest loses everything, minus whatever money I recover from a new guest, plus a $100 processing fee.

John Underwood · Answer

I get a non refundable $500 deposit along with copy of Drivers license.

Check, Zelle, PayPal etc.

Then require balance 30 days before stay.

Garrett Brown · Answer

This is exactly what I do.

Patricia Andriolo-Bull · Answer

I take direct bookings but starting to question it. It's a lot of work but I still get very little bookings in return. I'm okay with Airbnb and VRBO (and booking.com), it keeps it easy. I take credit cards, too, which are a bit of a pain and still charge as much as Airbnb does. Similar policies to others, 60 days prior 50% refund less credit card fees. 30 days prior refund of 50%. Nothing less than 30 days. I can't imagine I would ever book direct if there wasn't at least some flexibility in a refund.

Michael Baum · Answer

We get most of our bookings a year to 6 months in advance. We book only through AirBNB and VRBO. Each guest pays the whole freight up front.

Our refund policy is medium. We offer full refund 30 days before then prorated after that.

If you are taking direct, I wouldn't take less than 1/2 down.

Sarah Kensinger · Answer

Always always require 100% payment at booking unless it's an OTA that handles your payments entirely! Otherwise, you'll be chasing down payments left and right! We use the same refund policy across all listing sites, so whatever we use on Airbnb, VRBO, etc., we use direct as well.

Andrew Steffens · Answer

We have recently loosened our cancellation policies on most properties to remain competitive. That said, for all reservations we collect payments on (this includes VRBO since we have an integrated account through our PMS) our charging schedule mirrors the reservation cancellation policy. We have different properties with different policies but it always mirrors. When you do a Credit Card refund you lose the CC processing fee (usually 3%+) which is costly over time.

Lisa Graesser · Answer

I take direct booking for our high season Jan -April, one year in advance and usually to repeat guests. I take 1/2 total upfront and balance due 60 days prior to arrival. Cancellation policy is full refund less cancellation fee of $200 and any credit card fee is cancelled greater than 60 days prior to arrival, 1/2 refund of total if cancelled 60-30 days prior to arrival and no refund if cancelled less than 30 days prior to arrival.

Best Payment & Refund Structure for taking Direct Booking 6-9+ months in advance?

Best Payment & Refund Structure for taking Direct Booking 6-9+ months in advance?

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