UK: Insurtech vacation rental specialist Pikl is launching a new, insurance-backed, flexible cancellation product specifically for the vacation rental market that will enable operators to offer the same or very similar cancellation policies to those that customers are used to with hotel bookings.
The product is believed to be a first-of-its-kind solution for the vacation rental industry.
Alongside this, Pikl is also introducing a small damage deposit product in addition to its existing products, which protect against significant property damage and liability in the vacation rental sector.
Traditionally, hotel bookings have offered more attractive and flexible cancellation policies than vacation rentals, enabling customers to cancel, without charge, up to 24 hours before their booking starts. These cancellation policies have led to hotels and online travel agencies [OTAs] achieving higher booking and conversion rates, resulting in greater profitability.
Pikl believes its flexible cancellation product could prove to be a ‘game-changer’ for vacation rentals because there will be little or no difference in flexible cancellation policies between vacation rentals and hotels, allowing both vacation rental agencies and OTAs to drive up more business from the vacation rental sector. The product can be offered as either an opt-in or inclusive proposition and is backed by A credit-rated insurers.
Louise Birritteri, founder and CEO of Pikl, said: “The vacation rental market has enjoyed rapid growth over the last ten years and is now a mainstream choice. But, until now, it’s cancellation policies have lagged behind those of hotels.
“Customers have become used to free and flexible cancellations offered by hotel bookings and are prepared for that to be reflected in a higher price. But without such cancellation policies, the vacation rental market has been operating at a disadvantage.
“Our flexible cancellation product taps into that customer expectation and will take away the disadvantage allowing vacation rentals managers to gain from a new revenue stream with higher booking conversions.
“We are really excited about this launch as these are the first Pikl products that are available to clients globally. Not only should it create new markets and partnerships for us but it will genuinely help to grow the vacation rentals market.
“We have been working in collaboration with a number of industry partners and large insurance providers to bring them to market,” she added.
Having a flexible cancellation policy will undoubtedly increase cancellations, which can be volatile, but the important element is that the risk will not be carried by the vacation rental agency but transferred to Pikl’s product within a regulated structure. Pikl will work behind the scenes and so there is no need for customers to be transferred to a third party.
Here is a summary of the key benefits for operators in the vacation rental market that Pikl’s new flexible cancellation product is expected to deliver:
- Increased booking conversion and revenue per booking
- Increased direct bookings
- Reduced risk when listing with OTAs
- Option to allow cancellations up until time of check-in
- Integrates seamlessly into customer terms and conditions
- By working with an insurer [Pikl], it provides confidence that they are not taking on a regulated, risk-carrying activity
The small damage deposit product replaces the refundable damage deposit that guests usually pay upfront, which can sometimes be off-putting to customers. It can be offered as an opt-in for guests or inclusive at the point of booking a vacation rental.
The product provides a new revenue stream to vacation rental managers, whilst reducing the friction which can occur when accidents happen which traditionally are deducted from damage deposits.
Both products are being launched on 1 May and will be available on Pikl’s website. People can find out more by visiting Pikl at Stand 28 at the Short Stay Summit on 24 April.
