Dealing with Complaints and Refund Requests

How do I deal with complaints from my holiday lettings guests? What do I do if they request a refund?

Secure Piggy BankThere are no official industry guidelines on when a holiday rental guest is due to receive a refund. This means a lot of owners are anxious about complaints and requests for refunds. The subject is ambiguous; so many owners worry that a self interested guest might try to get a free holiday by "looking for something to complain about". Similarly refusing to refund or compensate a guest who has been let down, may lead to damaging feelings of animosity or actions.

Every refund request has to be dealt with on a case by case basis. However, we have created some basic guidelines, to help you make a fair and informed decision.

The 24 hours rule

One of the first rules of managing a holiday rentals is that as soon as a guest reports a problem, you should do everything within your power to fix it as soon as possible. Not only is this the level of professionalism you should be striving towards, it is also a way of safeguarding yourself against having to argue the toss over refunds.

You should create a 24 hours rule. This means both parties agree that it is the owner’s responsibility to resolve a problem within a reasonable amount of time (for example 24 hours). If the problem remains unresolved then the guest is due a partial refund as appropriate.

Please consult the downloadable Welcome Letter & Arrival and Departure policy. This document requests that guests check the holiday property on arrival, and report any problems to the owner or housekeeper. We recommend you modify your Rental Contract to include these policies that guests must:

Inspect the property on arrival and report any immediately problems to you or your housekeeper.
Report any problems with the property they find during their stay to you or your housekeeper.
Acknowledge that if you solve the problem within the said time (say 24 hours) they are not due a refund. If you do not solve the problem they are entitled to an appropriate refund.

When a refund is due

1. Minor refunds

One of the first rules of managing a holiday rentals is that as soon as a guest reports a problem, you should do everything within your power to fix it as soon as possible. If you are unable to solve the problem in a reasonable amount of time, then you should consider some partial compensation, based upon how severely the guest’s holiday experience was affected. If you are unable to resolve any of the following problems, giving a partial refund as a gesture of good will is an option.

Extra expenses occur:
If a guest has to pay extra because of a problem with your holiday home, reimbursing these expenses is a good customer service practise. This will usually be something minor. For example if the electricity is cut off, and the guests have to pay for a takeaway because they can’t cook, then offer to pay for it. However if the guests went out to a Michelin star restaurant when they were planning to have microwave meals, they might be taking the Mickey.
Essential piece of equipment is broken:
When a guest books your home, they are paying for the quality of the equipment and facilities you advertise. If an essential “deal breaker” item isn’t working, for example your LCD HDTV and entertainment system are broken, and you can’t get a repair person to come in due course, a small refund would be an act of good will.

Swimming pool is unavailable:
Guests are required to pay extra for desirable facilities in your home, such as a private swimming pool.  If this is closed or out of order during your guest’s stay, you should disclose this information to your guests as soon as possible. The 2010 Rental Rate Setting Guide (which you can download when you use The Rental Income Calculator) explains the extra value a swimming pool adds onto your property, depending on the size and location. You could refund your guests this amount as a good will gesture to encourage repeat bookings in the future.

Cleaning problems:
Your cleaning expenses (the fees for between rental cleaning, or a weekly cleaning service) will be covered by the rental income you make. If your guests arrive at the scheduled time, and your holiday home has not been cleaned yet, you could refund your guests the cost of the cleaning fee as compensation, to keep them happy. If the guests arrive before the scheduled time, then you are not at fault.

2. Full refunds:

Most disputes can be resolved easily if the owner acts quickly, or compensates the guest a small portion of the holiday rental fee. However there are a few extreme examples whereby your guests should be entitled to a full refund if you don’t or are unable to resolve the problem.

The property is double booked:
You should never double book your property. If this does ever happen it’s due to incredibly poor organisation on the part of the owner, or property manager. However if this happens you should give your guests a complete refund, or pay for them to stay in an equivalent holiday property. Remember holiday rentals are usually 50% cheaper than the cost of a hotel. So if you can’t book a local holiday rental for them, you could be really shelling out. If the double booking was the fault of your property manager, make sure they pay out accordingly.

The holiday home must be vacated:
If your home has to be closed for major repairs, or a serious maintenance problem occurs due to major neglect on your part, then it’s most likely your guests will have to leave the property, and make other holiday accommodation arrangements. If this occurs your guests are entitled to a full refund.

Stop disasters before they start:
The Cleaning and Maintenance Checklist
lists all the essential seasonal maintenance checks you should make, to ensure your second home is kept to standard. 

  Download Now

When you should stay firm

Most problems that occur when owners rent holiday homes are relatively minor, and can be resolved quite quickly. However if:

a) You were not told about, or given a chance  to rectify the problem
b) The issue can be classed as an “Act of God” then it should be acceptable not to refund or compensate your guests, under most circumstances.

Complaints received after departure time:
If your guests complain after they depart their holiday rental then you are not obliged to give them any compensation. First of all there is no way of proving when the problem occurred. Secondly they did not give you a chance to rectify the problem. Be sure to explain this in your Rental Contract.

The guests choose to leave:
Whilst you should always do your best to ensure your guests have a comfortable, enjoyable stay, if the guests choose to leave over a subjective issue they must take responsibility for their decision. For example complaining that the beds aren’t comfortable enough is a subjective opinion, because a magical bed that is going to keep everyone happy simply doesn’t exist. We recommend you include a no-refund policy clause, in your Rental Contract, if guests choose to vacate the property.

Airline strikes:
A lot of things can go wrong on a holiday. Airline strikes and bad weather being amongst two of them.  Including an Act of God clause on your Rental Contract means you’re protected from having to pay out. One method of keeping everybody happy is recommending guests take out travel insurance, to cover any such occurrences. Explain that by signing the contract, they acknowledge that it is their responsibility to take out travel insurance, should any circumstances beyond your control spoil their holiday.
Copyright, July 2010