Hotel Cancellation Policy Revenue Calculator

Cancellation fees + no-show capture add ancillary revenue while managing booking risk.

Annual bookings

Cancellation rate %

Fee captured on cancellations %

No-show rate %

ADR

Annual fee revenue

$680,000

No-show revenue

$400,000

Cancellation revenue

$280,000

How the math works

Cancellation $ = bookings × rate × ADR × capture %. No-show = bookings × rate × ADR.

40k × 10% × $200 × 35% + 40k × 5% × $200 = $280k + $400k = $680k.

How to Use

Enter bookings / year.
Enter cancellation rate %.
Enter avg cancellation fee.
Enter no-show rate %.
Enter avg no-show charge.
Enter ADR.
Read annual revenue.

Frequently Asked Questions

Cancellation policy types?

Flexible (free cancellation 24 hrs before): common on rack rate. Semi-flexible (48-72 hrs): mainstream. Strict (7 days + non-refundable deposit): peak season, group. Non-refundable (prepaid, discount): 10-15% discount typical. Cancellation fee: 1 night room charge most common; full stay in peak periods. Consistency across channels important.

No-show revenue?

No-show rate: 3-12% of bookings typical. Peak season: lower (3-5%). Off-season: higher (7-15%). Weekend/event dates: volatile (3-15%). No-show policy: charge full first night + release room at 6pm. Captures otherwise-lost revenue. Revenue: on $250 ADR × 5% no-show × 30k bookings = $375k/year. Material stream.

Policy trade-offs?

Flexible policy: more bookings (lower abandonment), more cancellations (6-18%). Strict policy: fewer bookings, fewer cancellations (2-6%). Net revenue: depends on overall booking + cancellation mix. Resort seasons + corporate events: stricter policies stick (guests commit). Leisure + last-minute: flexible wins bookings. Different rate plans offering multiple policies: captures both segments.

OTA impact?

OTA-booked reservations: cancellation policy set by hotel but enforced by OTA. Hotel charged by OTA for no-shows depending on terms. Booking.com's strict policy enforcement helps hotels capture no-show revenue. Expedia similar. Non-refundable bookings: greater guaranteed revenue but require discount. Chargeback rate: 1-3% of direct bookings (payment disputes).