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Understanding Cancellation Risk Scores

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  • Updated

What is Cancellation Risk?

Cancellation Risk is a predictive tool that helps you understand which bookings are more likely to cancel before arrival. It analyses your property's historical cancellation patterns and applies them to current reservations to give each booking a risk score from 0% to 100%

Think of it like weather forecasting - we can't predict with certainty whether a specific booking will cancel, but we can identify patterns that suggest a higher or lower likelihood based on similar bookings in the past.

How Risk Scores Work

Risk Levels

Each booking is assigned one of three risk levels:

  • 🔴 HIGH RISK (20% or more) - Bookings with strong indicators that match past cancellations

  • 🟡 MEDIUM RISK (10-19%) - Bookings with moderate cancellation indicators

  • 🟢 LOW RISK (Below 10%) - Bookings with characteristics similar to those that typically stay

What We Analyse

The system looks at your property's historical data - specifically the last 2 years of bookings - to identify patterns. For each current reservation, we examine:

  1. Booking Source & Channel

    • How was this booked? (OTA, Direct, GDS, etc.)

    • What's the guest segment? (Leisure, Business, Group)

    • Which source did it come from? (Booking.com, Expedia, Direct, etc.)

  2. Timing Patterns

    • How far in advance was the booking made?

    • When is the arrival date?

    • What time of year is the stay?

  3. Booking Characteristics

    • What room type was booked?

    • Has the booking been modified?

    • How many times has it changed?

  4. Historical Context

    • What happened to similar bookings in the past?

    • How many similar bookings have we seen?

    • What percentage of them cancelled?
       

Understanding Your Scores

Why a booking might show 100% risk:

A 100% score means that historically, every booking matching this profile has been cancelled. However, this doesn't guarantee this booking will be cancelled because:

  • The pattern might be based on a small sample size

  • Past behaviour doesn't always predict future behaviour

  • Guest circumstances vary

  • Booking conditions may have changed

Example: If you only had 5 advance-purchase OTA bookings for a specific room type in winter, and all 5 cancelled last year, the system will flag similar bookings as very high risk. But this year's guest might be completely different.

Why a "guaranteed" booking might show high risk:

You might know certain things about your guests that the system doesn't:

  • Personal relationships with repeat guests

  • Advance deposits or guarantees

  • Special event bookings

  • Corporate contracts

  • Local context or guest communication

The system only knows what's in your booking history. It can't account for:

  • Prepayment status (unless tracked differently)

  • Guest loyalty or VIP status

  • Personal guarantees

  • Recent communication with guests

Best Practices

✅ DO:

  • Use risk scores as one indicator among many in your revenue strategy

  • Pay attention to high-risk bookings approaching arrival dates

  • Review patterns over time to understand your property's trends

  • Combine risk data with your direct guest knowledge

  • Use risk scores to prioritise which reservations need attention

❌ DON'T:

  • Treat any score as a guarantee (neither 0% nor 100%)

  • Cancel or release rooms based solely on risk scores

  • Ignore your personal knowledge of guests and circumstances

  • Assume the score knows information not in your booking system

Questions & Configuration Support

To adjust your property's risk settings:

Contact your Right Revenue support team with:

  • Your property ID

  • Which thresholds you'd like to adjust

  • Your reasoning (helps us give better recommendations)

Common questions:

Q: Can I exclude certain booking types from risk scoring?
A: Currently, no, but this is based on your feedback being considered for future updates.

Q: Why do some bookings show "N/A" for risk?
A: This typically means there isn't enough historical data for that specific combination of characteristics.

Q: How often are scores updated?
A: Risk scores are recalculated daily at 2 AM UTC using the most recent data.

Q: Can I see why a specific booking got its score?
A: Yes, each booking's risk details include the factors that contributed to its score.

 

 

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