What’s the worst possible question a guest could ask? I’ll give you a hint – it’s likely to put you in a situation that’s difficult, awkward, uncomfortable, and ethically challenging. Come up with anything yet? For most property managers, the last thing they want to hear right before check-in is “I have to cancel. Can I have my payments back?”
Even if you have a set of policies on how to deal with last minute cancellations, your relationship with the guest and hope for future business will be quickly tested the second they discover the reservation can’t be filled and their payments (not just deposit!) won’t be returned.
To avoid losing the relationship, there are a couple of alternatives that you might consider. You could give the guest a 25-50% credit for a future booking or make an exception and refund all or a portion of the trip cost. But as you already know, both options put a lot of risk on your company to fill cancelled reservations last minute. A better, long-term alternative is to offer trip cancellation and interruption travel insurance to your guests.
This article should serve as your guide for what property owners and managers need to know about offering vacation rental insurance to guests and thereby protecting their relationships.
Benefits travel insurance provides for hosts and guests
If everything goes as planned, the travel insurance policy will remain unused and the guest has a worry-free vacation. However, if something does go wrong that prevents the guest from taking all or a portion of their trip (e.g. death, sickness, injury, jury duty, bad weather, natural disaster, job requirements, etc.), travel insurance ensures both guests’ money being returned and the host keeping their rental payment.
This resolution is particularly important for those who use third-party websites to list their reservations (e.g. Airbnb), which include an extenuating circumstances clause that protects the guest’s right to a refund, rather than the host’s right to the reservation payment.
Besides protecting guest relationships, setting up travel insurance for your vacation rentals is free with most companies and it can help you increase net profits up to 35% per reservation. This is because they make money on selling insurance, so they want to make it as easy and as rewarding as possible for you to offer travel insurance to your guests. When it comes to licensing requirements, some insurance companies require licensing in your home state, while others avoid licensing requirements entirely. If you can find a company that makes licensing easy for your rental, that’s a huge benefit!
Determine if travel insurance meets your requirements
When determining whether or not travel insurance is the right fit, look at what travel insurance providers can offer and see if it matches your company’s requirements.
One of the most important factors affecting company requirements for travel insurance is your process of taking payments. For example, if you do not take payment at point of sale or only charge a 20% deposit, then offering travel insurance in-path doesn’t make sense and offers limited benefit when compared with post-sale insurance. The ideal scenario to offer travel insurance at the point of sale is if you take the full payment at this time. However, many guests will decline insurance during the original reservation, so it would be wise to consider a post-sale option that will give you the chance to retarget those guests.
Considering the risks your guests face will help determine what you need in a travel insurance policy. Does your business receive bookings from military personnel? Make sure your policy covers active military service and revoked military leave. Are you located in a hurricane prone area? Make sure your policy includes hurricane warnings at the destination as a covered reason. Do you often host elderly guests? Make sure your policy has a pre-existing condition waiver.
Matching company values
Even more important than finding a company and policy that meets your needs is finding a partner that reflects your values.
If protecting guest relationships is important to you, then find a partner who can do the same. Your guests will associate any experience related to their vacation with your business, so you’ll want to ensure that your travel insurance partner is helpful, considerate, and fair to the guest during both the purchase and claims process.
If your business values technology and a seamless customer experience, then find an innovative insurance company that can meet your technology needs. There are some very technical companies that can provide support and tools for customized websites, online advertising, and integrate with your current vacation rental website, while others focus on keeping the technology as simple as possible.
If you simply want the highest return per policy sold, there are certain providers that offer higher affiliate payouts than others. To find out what each insurance company offers, ask around for quote. Each provider will rely on different metrics to determine total fees awarded.
You’re ready, you’re set, now go!
Once you’ve decided that providing travel insurance will be a good addition to your business, contact the vacation rental travel insurance company that meets your needs and matches your values.
Even if you’re still unsure if you’re ready, you can simply reach out and ask for more information. They should be able to provide some basic information about their products, technology and processes, as well as answer any questions you may have.
By the time you’ve integrated travel insurance into your booking process, you’ll be fully prepared to protect the guest relationships that you work so hard to build and maintain, and maybe generate some extra revenue for your business as well!
About the Author
