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How to use business rules to reduce risky reservations

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Business rules are specific instructions implemented within a company to dictate how day-to-day actions should be performed.

Whether or not you realize it, every company has a set of rules that guides their business decisions. For short-term rental operators, this can range from using a list of preferred suppliers when restocking your properties to training your team on how to handle new and repeat bookings.

These rules ensure day-to-day operations run smoothly, but they can also play a bigger role. When implemented properly, the right rules can help you reduce the risk of incidents at your properties. In other words, your business rules can act as an added layer of security for your company.

Here’s how to start making your business rules work for you:

Determine your risk tolerance

First things first. Before using business rules to mitigate risk, you need to determine your risk tolerance. In other words, what level of risk you’re comfortable accepting when it comes to reservations. To guide this decision, figure out what constitutes a risky reservation for your company.

Risk tolerance varies from business to business—some property managers have issues with specific OTAs, while others are more concerned with the length of stay. The threats you face and the types of reservations you’re willing to accept might also depend on the property type, where it’s located and the proximity of your neighbors. Know what sorts of threats are out there and figure out what’s most relevant to you.

Start by thinking about which reservation characteristics pose the greatest threat to your business. (Note: A reservation with a “risky” characteristic isn’t necessarily risky. It’s important to review all of the details attached to the reservation to assess its risk level.)

Example characteristics include: 

  • One-night stays

  • Last-minute bookings

  • Large groups

  • Payment issues

Once you have these outlined, it’s time to train your team on how to interact with reservations of varying risk levels. Highlighting potential red flags makes the vetting and check-in process smoother, safer and more manageable for your team.

Train your team

To get started, document your internal process for handling different reservations. Your business rules need to be systematic and well-defined to ensure every team member feels confident in handling every type of reservation.

This could include your team asking the guest for further verification any time there’s a one-night stay or sending stricter instructions to large groups who’ve booked one of your properties.

Keep everyone up to date on current threats and trends in the industry by holding regular meetings and training sessions. Encourage your team to ask questions and get clarification on anything uncertain.

Tailor your communications

Just like you’d tailor the guest experience to the reservation, it’s important to tailor your communications with the guest to the reservation’s risk level. 

No two guests are the same, so don’t treat them as such. Use your messaging as an opportunity to verify your guest and confirm their reservation details. By using customized language, you can build trust with good guests and deter bad actors from moving forward with their reservation.

Setting it up

Within your PMS, write and assign automated message templates to send to guests depending on the perceived risk level of their reservation. Consider at least two different types of messages: strict and relaxed. 

If a reservation has some red flags (or characteristics that you’ve determined to be risky) send the stricter message. Use the interaction as an opportunity to set expectations and reiterate your house rules. More importantly, explain the consequences of breaking these rules.

If the reservation appears risk-free, such as a family booking your lake-side house for the long weekend, send the relaxed message. When a reservation presents little to no risk, you want the guest to experience minimal friction throughout the check-in process.

These messages can be introduced before the stay and used to open an ongoing line of communication between you and the guest. They can be scheduled to go out at the time of the booking, pre check-in and post check-in. To make your life easier, leverage the automation capabilities of your PMS. You can make the messages condition-based, meaning they're only sent if specific conditions are met, i.e. the guest booked a one-night stay.

How to assess the risk level

While pinpointing risky characteristics is a good way to determine which reservations require more of your attention, it’s only part of the battle. To properly assess the risk level of a reservation, you need systematic guest screening, which combines behavioral analysis with ID verifications, payment validation, among other checks.

Implement a process for guest screening, then use your business rules as instructions on how to handle the findings.

Business Rules in Autohost

If you use Autohost, our Business Rules ensure you flag the risks that matter most to your business. You can assign actions for certain reservation conditions, such as adding additional verifications for booking conditions like one-night stay.. Set up the Business Rules to flag characteristics that have caused issues in the past. You can even request a notification to be sent so that your team is aware.

Regardless of your process, ensure your business rules are well-documented and well-communicated to minimize missteps and reduce risk in your operations.