“We just can’t manage with one-day cancellations.”
This comment, shared in a tour operator group, says what many in the industry feel daily. On the surface, a cancellation feels simple. To the customer, it’s just a click. To the operator, it’s a seat that’s already cost time, effort, and money—gone, without a chance to recover it.
The hidden cost of flexibility
Customers often expect flexibility, especially when booking through major OTAs. And that’s understandable. Plans change. Flights get cancelled. Friends back out. But when that flexibility is unlimited and unconditional, it creates serious challenges for operators.
A single cancellation can mean:
- lost revenue
- wasted staff time
- unused partner slots (like guides or buses)
- no opportunity to resell the space
And for group tours, that one seat might affect the experience for everyone else.
Two refund costs that never come back
Some costs aren’t dependent on how your business is structured. They apply to nearly every operator:
1. Commission that doesn’t come back
Many OTAs or resellers don’t refund their commission or booking fee, even if the customer gets a full refund.
Impact: You lose the revenue and still pay for a booking that never took place.
Example: A €100 tour is refunded to the customer, but you still lose €20 in commission.
2. Refund processing fees
Depending on your payment gateway, you might be charged a transaction fee—even for a refund.
Example: PayPal and Stripe typically keep the original transaction fee, even if the payment is reversed.
These costs add up. And the more volume you do, the more you feel it.
Where OTA policies become the standard
The real challenge is that OTAs set the tone. Platforms like Airbnb, Viator, and GetYourGuide determine the refund window, and if you don’t agree with the policy, you’re off the platform.
Operators aren’t just navigating one set of rules—they’re adjusting to several, often with little control. When every OTA enforces a 24-hour refund policy, you either adapt or opt out. One operator put it simply: “It’s not up for negotiation.”
At Palisis, we don’t take sides. We’re a channel manager, and we work with OTAs every day. But we also believe operators need more control. Your policies, your rules.
Trust, but at whose cost?
As Greg Fisher pointed out in a recent discussion, international travellers rely on OTAs for trust. They want to see reviews, book in their own language, and compare prices in their own currency. And for that reason, they’ll often skip the operator’s direct website—even if the price is the same.
But that trust comes with a cost. Operators carry the weight of those last-minute cancellations, no-shows, and booking reshuffles. As one operator described, some guests hold spots with no intention of confirming, just because they know there’s no cancellation fee.
So what can you do?
You may not be able to change the policies of every OTA, but you can:
- Use tools that give you more visibility, like tagging OTA bookings
- Set your own cutoffs for things like pickup selection or direct refunds
- Flag and cancel incomplete bookings early, as some operators do
- Balance flexibility and fairness across your direct and indirect channels
At Palisis, we’ve been building features to support that balance:
- One-click PayPal refunds from the back office, no extra logins
- Pickup blackout windows, so no one can select a hotel stop too close to departure
- Audit trails for refunds and reprints, to protect your team and your margins
These aren’t silver bullets, but they help you stay in control—even when platforms set the pace.
The refund isn’t the end of the story
Many guests won’t return to your destination. But they might book with your brand again in another city. They might leave a review. They might share your name with friends.
The moment when things go wrong is often the moment they remember most.
If your tools give your team the power to respond quickly, clearly, and fairly, you can turn a refund into a reason to trust you—even if the customer never takes the tour.
Want to see how we help operators manage cancellations and customer experience?
Get in touch with our team.