Should I return some of the deposit?

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declanja
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Should I return some of the deposit?

Post by declanja »

I would like some opinions on what I should do in this situation. I took a 4 night booking with a deposit of €132 (30%) for dates in early May . The guests had to cancel due to health issues a few weeks ago. I advised guests that I would re-advertise and refund deposit minus any discount I would give to a late booker. I have now received a booking for 7 nights (€530) that includes 3 of the 4 nights in question. It leaves me with one empty night at the end. I had reduced my rates in order to get bookings as late April - early May was still available. So for the 4 nights that were cancelled I am now receiving €228 (3 nights) If I add this to the withheld deposit of €132 it gives me €360 which is less than the €440 that I would have originally got.
I know it is complicated as the booking I have got is not for the exact dates that were cancelled. I would be interested knowing how my LMH friends would deal with this both on a business and moral basis, Thanks Declan
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Post by FelicityA »

I am someone who tends to give all back when someone is ill and then I regret it because I should have had my business head on but being perfectly rational and fair and looking from the outside at your situation, I would say that you have lost 80 Euros and you should be able to keep that and refund the difference, without feeling bad about it, as you have had the extra hassle of cancelling, rebooking and now refunding. On the basis that the deposit is theoretically non-refundable, I think they will be pleased to get anything back.
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PW in Polemi
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Post by PW in Polemi »

And of course, there is always their holiday insurance to cover their losses ...
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Post by FelicityA »

PW in Polemi wrote:And of course, there is always their holiday insurance to cover their losses ...
Hmm. Yes I hadn't thought of that. Yes, that is obviously the answer all round and no one loses.......if they had the foresight to insure.
declanja
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Post by declanja »

Thanks for the replies, I will have lost €80 even if I don't refund anything on the four night booking. However I now have a 7 night booking that is paying me €530 which I would not have been able to take if the original didn't cancel. My thinking is to email them and explain that I am still at a loss as my daily rate is lower and I now have an empty night. Am I being reasonable?
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Post by declanja »

I had offered to supply them with whatever documentation they might require for an insurance claim when they cancelled but they didn't get back to me on that. They did email me recently to enquire if I had secured a booking and I had answered that I had reduced my pricing in an effort to do so.
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Post by Essar »

I wouldn't have offered a refund of a deposit; as they are non-refundable.

If they have insurance I would offer to provide them any documentation they need to help make a claim.

If you do decide to refund because you have a new booking that covers the dates; only look at the days that converge and not the overall week/period that replaces the original cancellation dates.
So, if they had booked 3-nights paying a £100 per night and for the same three nights you only received £60 per night; I'd refund them £180 (3 x £60) less an admin fee of £45 to cover your time.
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Post by Bunny »

declanja wrote:My thinking is to email them and explain that I am still at a loss as my daily rate is lower and I now have an empty night. Am I being reasonable?
I agree. Regardless of the reason for cancellation, they cannot expect any refund even if you have managed to relet, as it still puts you at a loss compared to what you would have received for those nights if they had gone ahead.
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Post by petitbois »

this has happened to us before & we have kept the money but given the client the option to book for following year at this year's rate.....most people take us up on the offer.....
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Post by Guest »

:?:
Last edited by Guest on Thu Jul 16, 2015 9:13 pm, edited 1 time in total.
declanja
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Post by declanja »

Thank you all. The maths are very clear. I was concerned that it might look mean. I will go ahead and explain the maths to them. I will offer dates for next year at a reduced rate if they are interested. Declan
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Post by Bunny »

+1 This is how I worked it out too. Thus keeping the £132.00 deposit you will still be £83.00 down.
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Post by greenbarn »

declanja wrote:Thank you all. The maths are very clear. I was concerned that it might look mean. I will go ahead and explain the maths to them.
Before you do - one thought. It's very rare that a self-catering let is calculated on a nightly basis as I'm sure you know; your expenses are loaded up front and are virtually the same for one night as for seven. In that situation, dividing the total by the number of nights and using that value as the base for further calculations simply doesn't work - as we constantly try to explain to guests who think they should pay 3/7 of the weekly rate for a short break.
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Post by declanja »

I agree Greenbarn but is there a better way to do it? Even allowing for your valid point it looks like I am still losing on this cancellation.
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greenbarn
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Post by greenbarn »

declanja wrote:I agree Greenbarn but is there a better way to do it? Even allowing for your valid point it looks like I am still losing on this cancellation.
Yes, you're still losing, but unless you genuinely work on a multiple of a nightly rate the guests are quite likely to see the detail of the argument as something to challenge, particularly as it probably inflates the amount.

If you offer full week as well as short breaks, presumably you can calculate the incremental charge for additional nights, or have a standard formula for doing so which may be as simple as additional night = 10% of full week rate (which works if you reckon a 4 night break is 70% of a 7 night break, which is typical).
If there hadn't been a discount involved, you'd have missed out on one night, ie 10% of the full week rate. Because you had to discount, you've lost quite a lot more than that at which point my head starts to hurt and I'll pass back over to those who enjoy this sort of thing! The admin charge for sorting it all out is currently running at about £500 I'd say......

Oh, and they should have had travel insurance.........
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