A cancellation fee can be charged when a product (internal or external) is cancelled in the Reservation System. When this occurs, a cancellation fee transaction is added to the travel file. Cancellation fees can be applied to all standalone services, and there are more complex options which are enabled for flights, dynamic packages and bundled packages.
Cancellation fees are defined in two locations in the system:
Cancellation Fee Policy module: These are general rules that allow you to define how cancellation fees are charged by the travel company.
Price list: These are cancellation fees charged by the supplier, which you define in the individual contract, and pass on to the customer.
The cancellation fee transaction includes the following elements:
Service type: General.
Transaction name: The name of the cancelled service is preceded with the service name defined in the Cancellation Fee Policy module.
For example: if the service name is Cancellation fee for, the name of the transaction will be Cancellation fee for Grand Hotel
Supplier: The cancellation fee supplier. This can be the supplier defined in the contract or returned from the interface, or it can be the supplier defined in the Cancellation Fee Policy module.
Amount: The cancellation fee amounts for either a supplier cancellation fee or a company cancellation fee (described below).
Note that the cancellation fee amount is calculated and displayed to the user during the travel file process.
If the cancellation fee is 100%, in the Reservations System it will appear as non-refundable, and the full cancellation fee amount will be used in the travel file.
There are three option in which cancellation fees are charged:
Option A: Cancellation fees are charged by the supplier and not the travel company. With this option, there is a supplier price in the cancellation fee transaction.
Option B: Cancellation fees are charged by your company and not by the supplier. With this option there is no supplier price in the cancellation fee transaction. The selling price of the cancellation fee transaction is the amount your company is charging.
Option C: Cancellation fees are charged by the supplier, and your company adds an additional amount as markup on top of the supplier's cancellation fee. With this option, the difference between the supplier price and the selling price in the cancellation fee transaction is the amount your company is charging.
The cancellation fee amount for both the supplier and your company can be a fixed amount, a percentage, or a number of days or nights in the travel product.
In price lists, cancellation fees can be defined for the entire price list or each specific season. In the Cancellation Fee Policy module, the cancellation fees can be defined for specific time periods. When booking a transaction that extends across multiple seasons or cancellation fee periods, the system always applies the most stringent set of cancellation fees. The most stringent set of cancellation fees are the cancellation fees that start earliest from the service start date.
Definition of the cancellation fee rule:
For an internal product: the cancellation fee rule is defined in the product contract.
For an external product: the cancellation fee rule is returned by the interface which supports a cancellation fee policy, and enabled in the Cancellation Fee Policy module.
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In order for the cancellation fee to appear in the Reservations system in the booking process, and for the cancellation fee to be triggered in the travel file, in the Cancellation fee policy module, the Enabled field needs to be selected. |
Supplier cancellation fee options:
Supplier dictates selling price of product:
If the supplier dictates the selling price of the product, the cancellation fee amounts are determined according to the supplier and selling price amounts of the original transaction. The cancellation fee can either be a commission or markup (depending on how you work with the supplier).
Selling price is determined by your company:
If the selling price of the product is the supplier price and markup defined in the Markup Definitions, the cancellation fee amount is also calculated from these amounts.
If the supplier does not charge a cancellation fee:
For both internal and external products: the business rule defined in the Cancellation Fee Policy module applies.
In the transaction, the supplier price of the cancellation fee transaction is zero.
The selling price of the cancellation fee transaction is calculated according to the relevant rule in the Cancellation Fee Policy module.
If the supplier charges a cancellation fee:
For internal products, the supplier cancellation fee policy defined in the product contract is used. If markup from the Markup Definitions is added on top of the supplier price, when the cancellation fee is applied the profit margin is maintained.
For external products, the cancellation fee policy is returned by the interface, and the business rule defined in the Cancellation Fee Policy module is added on top of that amount.
In the cancellation fee transaction, the supplier price is the amount charged by the supplier to which you add the amount charged by your company to create the selling price.
With flights, the cancellation fee logic is as follows:
The cancellation fee is calculated according to the GDS flight class that appears in the Flight Details tab of the flight transaction.
The system searches the cancellation fee rules for a rule with a Category that matches the class of all the legs in the flight transaction.
The category with the most stringent conditions is applied and updated in the flight transaction, in the More details tab, in the Category field.
If no specific rule has been defined for that flight class, and there is a general cancellation fee rule for flights, that rule is applied.
The system searches for the rule with the most stringent conditions, which is defined as the cancellation fee with the earliest cancellation dates. If the dates for different classes are identical, the system applies the highest cancellation fee rule.
With dynamic packages and event led packages, the cancellation fee is the total sum of the cancellation fees of the individual package components (flight, hotel, event activity and transfers).
With event led packages the activity component cancellation fees is included in the calculation of the total package cancellation fee.
The cancellation fees for each component can be taken either from an external interface or from the Cancellation Fee Policy module.
Cancellation fees for additional services and the car component of Fly and Drive packages are added separately.
The cancellation fee is displayed in the Search Results page under the hotel service and in the Hotel Details page (if cancellation fees for all components are returned), and in the Travel File Details page.
If the cancellation fee for any component is not returned in the search results (which sometimes occurs with the Hotelbeds interface), the cancellation fee for the entire package is only displayed on the Travel File Details page, and in the Hotel Details page, the following message is displayed:
Final information about the cancellation fee policy will be displayed in the check-out page prior to finalizing the booking.
If one of the components is non-refundable, the cancellation fee for the package will include the full (100%) cost of that component. For example, if a hotel is non-refundable the different cancellation fees applied to the package will be the sum of the flight cancellation rule + the full cost of the hotel service.
If a cancellation fee is a percentage, the fixed amount is calculated and then added to the package cancellation fee.
The cancellation fee of each component is calculated according to the selling price formula of the dynamic package. In other words, if the dynamic package selling price is defined as supplier price + x% markup the cancellation fee for the package component is also calculated from the selling price + x% markup.
In the Cancellation Fee Policy module, rules created for the Package service type, apply to Static Packages and package contracts.
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