A new campaign led by The Competition and Markets Authority (CMA) is highlighting the importance of being open and transparent with your guests when it comes to your holiday letting terms and conditions.
The initiative, named ‘Small Print, Big Difference,’ is encouraging holiday home owners to ‘check in’ on their small print to ensure it’s fair to guests that have cause to unexpectedly cancel their holiday after booking, and is backed by a number of leading players within the industry including ABTA, The Travel Association, UKHospitality and Specialist Travel Association (AITO).
Are your terms and conditions ‘fair’?
The UK spent an estimated £81 billion on travel and holidays in 2018 alone, with the average family spending up to £3,000 to enjoy a range of destinations across the world and closer to home. The thought of having to cancel a holiday, whether through ill health, bereavement or circumstances outside of your control, and subsequent loss of a deposit or cancellation fee, can therefore be an expensive one.
However, on the part of the holiday homeowner, if you’ve taken a booking and perhaps lost other bookings in order to honour that reservation, you are equally left with the prospect of having to fill that cottage, sometimes with very little or no notice, or be left significantly out of pocket.
It would seem in this scenario there are really no winners; the guest doesn’t get to enjoy your cottage and potentially loses a sum of money, whilst you are left frantically trying to re-book or face losing out on potential rental income.
The answer therefore lays in finding a ‘reasonable’ and ‘fair’ solution for all involved.
What is legally reasonable and fair?
Under consumer law, a business may be entitled to ask customers to pay a cancellation fee in order to cover any potential losses. With that in mind, how much should, or could you be asking guests for if they need to cancel a booking?
The key is that the figure must be seen as proportionate to what you are losing.
For example, if you were to ask for the full sum of their holiday and you then had time to re-book for the cancelled period, this would be seen as unreasonable.
On the other hand, if you incurred costs in advertising and administrative time in order to re-book for the cancelled period, then asking for some of this to be covered would be more fair and reasonable if clearly communicated and stated within your terms and conditions.
How about non-refundable deposits?
If you include a blanket “non-refundable deposit” demand or cancellation fee in your terms and conditions then this could be an unfair contract, not legally binding, and unenforceable if that figure doesn’t correlate to your potential losses – even if the customer has signed it.
What do guests currently expect?
A recent survey conducted by CMA found that:
- 89% felt they should get all, or most, of their money back if they cancel and the business re-sells their booking.
- 85% felt that it’s unfair if they have to pay part of the cost of a booking when they cancel
- 66% felt that travel and holiday businesses do not always make it as easy to cancel a booking as they should
- of the people with experience of cancelling a booking, 1 in 5 felt that they had been treated unfairly
The key to fair conditions
When it comes to the law, the key is to ensure that any figure you request on cancellation correlates to the potential loss. However, at the heart of good customer service is great communication, so always make sure that your holiday letting terms and conditions are not only fair, but that your guests have seen them, read them, understand them and have easy access to them at every point of their booking with you.
For more information on the ‘Small Print, Big Difference’ campaign please visit: https://fairterms.campaign.gov.uk/
Boshers offer specialist holiday home insurance to owners across the UK. Need an insurance quote for your holiday let? Give us a call on 01237 429444.