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How do you deal with shortened Hostelbookers/Hostelworld reservations?

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Hostellier started this discussion 11 years 2 months ago

Hey all,

I have a relatively simple problem but just wanted some input on how everybody deals with it.

So, when you get a reservation from Hostelworld or Hostelbookers, of course the 10% immediately paid is a charge by them and we, as the hostel, gets the rest on arrival. So of course, we make less money on a booking made through these sites but that's fair enough.

Now, sometimes people shorten their stay. It's fine if they shorten one or two nights, however, what do you do when somebody has booked, say 7 nights and then emails to ask that the stay be shortened to just 1 night because their plans have changed. In this case, the deposit initially paid is almost the entire cost of one night's stay, and the hostel maybe only receives a few dollars, which is crazy.

So what is the solution? It's not fair that HW gets so much money and then we only get 7 dollars for a 26 dollar bed! But I don't see any other solution other than to bite the bullet. The 10% deposit is usually non refundable unless they paid for the cancellation insurance, so even if I ask them to notify HW and cancel the whole booking and do the 1 night through me directly, they will not want to because they lose the deposit.

I guess we just have to bite the bullet and hope it doesn't happen too often?

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Rucksack Brian

11 years

A question similar to this was raised once before, but we never came to a definitive conclusion.

In short: you’re damned if you do, and you’re damned if you don’t.

From the guest’s perspective, the right thing to do is to apply their total deposit to what’s left of their reservation. That’s because they’ve been duped by the booking site into think that money went to you. Now you’re screwed.

Despite my policy of always trying to do whatever is in the best interest of the guest, I would still charge them 90% of the booking price for the night that they do stay. Then I would educate them on how the booking sites work, where the deposits go, and why it’s better for them to book directly with the hostel. (They would still have all of their money if they had booked directly)

Then I would expect a nasty review telling everyone how I ripped them off… :sick: Screwed again.

I guess we just have to bite the bullet and hope it doesn't happen too often?

Regardless of which path you take I wholeheartedly agree with that.

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Rucksack Brian

11 years

I just looked back at this. If the guest booked through HB, then the solution above (charging for the night that they did stay) would be okay. If they booked through HW on the other hand, then that solution might technically be wrong according to the new contract.

To illustrate the problem you brought up, here is an example with simplified numbers:

A guest books 1 bed for 10 nights at $10/night. Total price = $100. $10 is paid as a deposit and retained by HW against the service fee. The guest then reduces the stay to 1 night at $10. The deposit paid is technically the hostel’s money according to the new contract, so you have already been paid the equivalent of the first night. Upon arrival the balance due is $0 and you have to accommodate the guest without any additional payment to the hostel. You are now also responsible for paying taxes on the deposit that HW retained.

HW is not required to refund the $9 difference to the hostel for the nights that were removed, because Section 4.1 says the service fee is non-refundable, regardless of whether the guest arrives, cancels or no-shows. There is no exception for changes to reservations mentioned in the contract.

Furthermore, if you had enrolled in the Elevate program and agreed to pay HW a 15% service fee for better search placement, then the deposit for the original booking would still be $10 but the service fee would be $15. When the guest reduces his stay to one night at $10 (already paid to the hostel as a deposit through HW) you will still have to accommodate him with no money paid on arrival, but now you also owe $5 to Hostelworld, plus you owe the taxes on the 10% deposit retained by HW. Not to mention the operational costs associated with hosting the guest...

Awesome, right?

In the end, a hostel will probably still charge the guest 90% from the booking price for the night that they do stay regardless of which site they used to book. Otherwise the costs for the hostel would be too high.

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Hostellier

11 years

Wow, that is wild. Thanks for the help...

I was reading your posts about this change to the service fee/deposit in another thread and about having to pay tax on this... Is it really considered income in anybody's world but Hostelworld's? I cannot imagine any situation where any government would demand tax on "income" that a.) never enters your hands b.) never has any possibility of entering your hands whatsoever c.) is not going to be showing up anywhere in any form whatsoever. I get how complicated they've made it, and I'm no lawyer but it sounds like paying tax on this is not necessary.

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John Moriarty

11 years

I had this situation happen and just advised to the guest that the deposit goes directly to HW and they were ok with it. I dont think that you should take the idea of the deposit as a deposit on the whole stay but a deposit on each night. So in the above case he is paying a 1 dollar deposit on each night. I think also HW even with the new contract couldn't say anything differently. So I would explain that it is 10% deposit per night and not 10% of the whole amount. Then he might be able to understand it better. And in the above situation if he advised you that he would reduce his stay within your cancellation period I think also you would have the right to charge him for the second night.

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slushysnow

10 years

When we have shortened HW/HB bookings we consider the deposit per night.

So for example a room is $100 per night and the deposit paid to HB/HW was 10% so balance is $90. Even if the guest was originally booked for 10 nights and shorten it to 1 night, we still charge them $90.

I'm pretty sure this is the way it actually should be done, looking at HW's contract.

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greenhorn

10 years

well
10% is non refundable deposit for EVERY SINGLE NIGHT of long stay
and should not be combined into single night after cancellation.

In my opinion all booking companies should SHARE collected money equally
with hostel, instead of putting whole burden on people who really provide BED .

Maybe people should have a choice of CANCELLATION INSURANCE .

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Hostellier

10 years

Yeah, so just an official final word on the matter, as per the agreement that the guest sees in small print when booking on Hostelworld:

"2. Cancellation Policies
Please note that any cancellations must be notified directly to the hostel at least 24 hours in advance of your scheduled arrival date, unless otherwise stated in the hostel's conditions. In the event of a no-show, the total of the first night's accommodation will be charged to your credit card. If you cancel any individual night of your reservation, then the deposit for that night will not be refunded or transferred."

So there you go. It's per night and non-refundable so you charge 90% no matter what.

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Rucksack Brian

10 years

Thank you for posting the documentation Hostellier!

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Uli

10 years

In our hostel we charge people always only for the number of days they are actually staying. If they booked through HW/HB they got a discount of 10% per day - following the rules of HW/HB.

E.g. if they booked 10 days (normal price: 10 EUR/day) and stayed only 5 they paid for 5 days 90% of our normal price - in this case: 45 EUR.
Only 3 times in an entire season we had people staying shorter than booked - because they found out that they coundn't get in time to ferries/planes with public traffic - so they had to leave a day earlier.

On the other hand about 50% of our guests stayed much longer than they had booked (the additional days for the normal price). Everybody was happy with that solution.

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