A cancellation policy is your set of rules about when and how guests can cancel or reschedule their bookings, and what fees (if any) they'll pay for changes. It's the balance between being flexible enough to keep customers happy and firm enough to protect your business from last-minute revenue losses that leave you with empty tours and unpaid guides.
Why You Need Clear Cancellation Rules ↗
Without a clear policy, you'll constantly face difficult judgment calls: Do you refund the family whose kid got sick? What about the group that wants to cancel because the weather forecast looks iffy? How do you handle no-shows who claim they "never got the confirmation email"?
A good cancellation policy removes the guesswork and awkward negotiations. It sets expectations upfront, protects your revenue, and actually makes customers more confident about booking because they understand exactly what happens if their plans change.
Plus, adventure activities have unique challenges – weather dependency, guide scheduling, small group dynamics – that make cancellations more disruptive than canceling a hotel room or restaurant reservation.
Quick Win: Make Your Policy Easy to Find and Understand ↗
Most operators bury their cancellation policy in fine print or make it so complicated that customers (and staff) can't understand it. Put your key points in plain English right on your booking page: "Cancel 48 hours before your tour for a full refund. Cancel within 48 hours and we'll keep 50% to cover our costs."
Clear communication upfront prevents disputes later and actually increases bookings because people feel more comfortable committing when they understand their options.
Common Cancellation Policy Structures ↗
Tiered refunds based on timing – Full refund if canceled 7+ days out, 50% refund for 48-72 hours notice, no refund for same-day cancellations. This gives you time to try to fill the spot while being fair to guests.
Weather-based exceptions – Many operators offer full refunds or free rescheduling for weather cancellations since that's beyond anyone's control. Just be clear about who makes the weather call (spoiler: it should be you, not the customer looking at their phone weather app).
Medical/emergency exceptions – Some operators offer partial refunds for documented emergencies or illness, especially for expensive multi-day trips.
No-show policies – Clearly state that no-shows forfeit their payment. This protects you from people who just don't show up and then claim they should get refunded.
Balancing Flexibility with Business Protection ↗
Consider your actual costs – If you can fill a canceled spot, your loss is minimal. If you can't, you're out guide wages, vehicle costs, and permit fees. Price your cancellation fees accordingly.
Think about customer lifetime value – Sometimes eating a cancellation fee to keep a good customer happy is worth it, especially if they're likely to book again or refer others.
Offer alternatives – Instead of just "refund or no refund," consider offering credit toward future bookings, which keeps the revenue in your business while giving customers flexibility.
Make rescheduling easier than canceling – Encourage people to move their booking rather than cancel entirely. This keeps your revenue while accommodating their needs.
Your cancellation policy works best when integrated with your booking system so it's automatically presented during booking, and supported by clear guest communication that reminds people of the policy before their tour.
For templates and policy examples, check out our guide on creating fair cancellation policies for adventure operators ↗.
Keep Learning ↗
Cancellation policies connect to several other business areas. You might want to explore revenue management to understand how cancellations affect your profitability, or learn about overbooking strategies that help offset cancellation losses.