Group requests are some of the most valuable business a property can get, and some of the riskiest. The rate gets all the attention. The terms around it, when the group pays and what it costs them to cancel, decide whether that revenue is real.
The Rule Most Group Policies Break
You can only keep what you already hold. If a group cancels and you have not collected the money yet, a cancellation fee is a letter you send, not revenue you keep.
Yet many group policies are written as two separate lists: a payment schedule in one place, cancellation terms in another. Put them on one timeline and they often contradict each other.
In this example the deposit is only due 60 days before arrival, but the policy says a cancellation from 90 days costs 50%. For a whole month, the property is charging money it does not have. The same happens again between 30 and 14 days before arrival.
One Ladder for Payment and Cancellation
The fix is to write each policy as one ladder: for every point in time, how much has been collected and how much has become non-refundable. Build the two together and they cannot clash.
Here the group pays a 30% reservation deposit when it confirms. The deposit counts towards the total, is refundable until 60 days before arrival and becomes non-refundable after that. A second payment brings the total to 60% at 30 days, and the balance is due 14 days before arrival. At every point, the cancellation charge is covered by money already in.
A Small Menu Beats a Blank Page
Revenue managers need options. A wedding party booking a year out needs different terms from a sports team arriving next month. But a blank form invites mistakes. What works for us:
- A set of eight ready-made policies, from fully flexible to non-refundable, each one a coherent ladder
- A custom builder for the exceptions, which checks every new ladder against the rule above
- Group size changes as a separate setting. How much the group may shrink, and until when (say 10-20% until 30 days out), depends on the group, not on the payment policy
- One offer text that brings together the rate, what it includes (meals, VAT, city tax), the payment ladder and the cancellation terms, so the client reads one consistent offer
Before You Send the Quote
- Is the cancellation charge on every date covered by what has been collected by then?
- Is it clear, in plain words, whether the deposit is refundable, and until when?
- Does the rate state whether meals, VAT and city tax are included?
- Is the allowed reduction in rooms written down, with a date?
- If it is a returning group, did you check last year’s dates and rates first?
And then the bigger question: is the group worth more than the individual guests it will displace? We answer it in Displacement: When a Group Is Worth Saying Yes To.
Need help with a group quote? Book a free Performance Assessment Call.