The parts of a cancellation policy that prevent disputes: deposits, a charge scale by date, changes and name changes, no-shows, supplier terms, events outside your control and refund timing, with an example scale.
1. Why your policy must follow your suppliers
Your hotels, airlines and ground suppliers each have their own cancellation terms. If your policy is more generous than theirs, you pay the difference. Build your charge scale from your strictest common supplier terms, then add your own costs.
Consumer and package travel laws in many countries set minimum rights, for example on cancellations caused by events outside anyone's control. Check yours with a lawyer and make sure your policy doesn't contradict it.
2. What to include
Cover each of these in plain language.
3. Example cancellation scale
An illustrative scale for a land-only package. Set yours from your own supplier contracts.
| Notice before travel | Cancellation charge |
|---|---|
| More than 60 days | Loss of deposit |
| 60 to 31 days | 30% |
| 30 to 15 days | 50% |
| 14 to 4 days | 75% |
| 3 days or less, or no-show | 100% |
4. Make it clear and agreed
Show the policy in every quotation and on the confirmation, and get the client's acceptance before taking a deposit. Tell clients early when a component is non-refundable, and recommend travel insurance that covers cancellation.
Frequently Asked Questions
Can a travel agency keep the deposit if the client cancels?
Often yes, if the policy the client accepted says so and local law allows it. Many agencies make deposits non-refundable because they pay suppliers at booking.
Should cancellation charges match supplier charges?
They should at least cover them. If your charges are lower than your suppliers', you pay the difference on every cancellation.