No hotel likes cancellations, but a sensible, well-measured policy can have a big positive impact on revenues. And a knee-jerk, unmeasured policy can have a big negative impact.
Cancellation policies should not change frequently, but they should vary by season. In the high season, you naturally want it to be stricter, to minimize last-minute cancellations. But if you rarely sell out in your low season, then you can afford to be more lenient, and it can get you a lot more reservations. Non-refundable rates can be surprisingly good revenue as well.
Consumers that are shopping around will compare the cancellation policies, so this is a pretty key item after pricing, reviews and photos. This short video will show a real example of how Cancellation policies can affect booking volume, so take a quick look and think about whether it applies to your property.