How to write a cancellation policy for tours and activities

Why your cancellation policy matters more than you think

A cancellation policy is one of the few pieces of small print that travellers actually read. Before they pay for a day tour, a week-long trek or a family activity, most people want to know one thing: what happens to my money if my plans change? A clear answer helps them book now rather than later. A vague answer, or no answer at all, sends them to a competitor whose policy they can understand in five seconds.

The policy also protects you. When a guest cancels the night before a private tour, you have already turned away other enquiries, booked a guide and perhaps paid for permits or a vehicle. A written policy that the guest accepted at checkout turns an awkward argument into a simple reference to terms they agreed to.

Finally, the policy shapes your cash flow. A generous policy brings in more bookings but more late cancellations; a strict policy protects revenue but can reduce conversion. The right answer depends on your real costs, which is where every good policy starts.

Start with your real costs

Before you write a word, list what you lose when a booking is cancelled at different points before the start date. This turns the policy from a guess into a reflection of your business.

For each product, ask yourself three questions. Which costs are already spent and cannot be recovered? How far ahead can you realistically resell a freed seat? And at what point does a cancellation leave you with an empty seat and no chance of filling it?

• A two-hour city walking tour has almost no fixed cost per guest and you can resell a seat the same morning, so a short free cancellation window of 24 hours is usually safe.
• A whitewater rafting trip may need a minimum group size, a guide booked a week ahead and equipment hire, so a 48 to 72 hour window protects you better.
• A 14-day Himalayan trek may involve permits, domestic flights, porters and teahouse reservations paid weeks ahead, so a tiered policy measured in weeks makes more sense than one measured in hours.
• A private charter or a sunset dinner cruise with a fixed vessel cost often justifies a non-refundable deposit, with the balance refundable up to a set date.

Common policy structures, compared

Most operators use one of five structures, or a mix of them across different products. Here is how they compare in practice:

• Free cancellation up to a set time: simple to understand and strong for conversion; best for day tours and activities where seats resell easily. The risk is late cancellations just inside the window.
• Tiered refunds: for example a full refund up to 60 days, 50% up to 30 days, nothing after that. Fair to both sides and well suited to multi-day trips, but you must explain it clearly.
• Non-refundable deposit with a refundable balance: you keep enough to cover early costs while the traveller keeps flexibility on the rest. Common for treks, expeditions and private tours.
• Fully non-refundable, usually paired with a lower price: suits fixed-cost products or flash sales. It can deter cautious travellers, so it works best as an option alongside a flexible rate.
• Credit or a date change instead of a refund: protects your cash while giving the traveller something of value. Useful as a later tier, but make sure it does not conflict with consumer law where you sell.

A worked example: what a tiered policy really costs you

Imagine a 10-day trek priced at 1,500 dollars per person, with a 300 dollar deposit taken at booking and the balance due 45 days before departure. Your unrecoverable costs are about 150 dollars per person by 60 days out (permits and staff commitments) and about 700 dollars by 14 days out (flights, lodges and porters).

A policy of 'deposit non-refundable; balance refundable in full up to 30 days before departure; 50% of the balance refundable from 29 to 15 days; no refund within 14 days' lines up with those costs. A traveller who cancels 40 days out loses 300 dollars, which covers your 150 dollars of spent cost with a margin for the admin and the risk that the seat goes unsold. A traveller who cancels 20 days out has paid 1,500 dollars and receives 600 dollars back (half of the 1,200 dollar balance), so you keep 900 dollars against roughly 400 to 700 dollars of spent cost. Within 14 days you keep the full price because you can rarely resell the place.

Now compare a day tour at 80 dollars with free cancellation up to 24 hours. If one guest in twenty cancels inside the window and you resell half of those seats, you lose very little, while the visible 'free cancellation' promise is likely to win you more bookings than it costs. Run the same simple sum for each of your products before choosing.

Sample wording you can adapt

Good policy wording says exactly what happens and when, using dates or hours rather than phrases like 'reasonable notice'. Keep the summary short enough to fit next to a booking button and put the full terms on a separate page. Adapt these examples to your own products and check them against the consumer law where you trade:

• Day tour: 'Cancel up to 24 hours before the start time for a full refund. Cancellations within 24 hours, and no-shows, are not refunded.'
• Activity with equipment: 'Free cancellation up to 72 hours before your activity. From 72 to 24 hours before, we refund 50%. Within 24 hours there is no refund, but you can move to another date once, subject to availability.'
• Multi-day trip: 'Your deposit of 300 USD per person is non-refundable. Cancel 30 days or more before departure and we refund everything else you have paid. From 29 to 15 days before, we refund 50% of the balance. Within 14 days of departure, no refund is due.'
• If we cancel: 'If we cancel because of unsafe weather, a closure or too few travellers, you can choose a full refund or a free move to another date.'
• Changes: 'You can change your date free of charge up to 7 days before the start, once per booking. Later changes are treated as a cancellation.'

Rules for when you cancel, and for situations outside anyone's control

Travellers judge your policy as much by what you promise when you cancel as by what you charge when they do. State the reasons you might cancel (weather, safety, minimum numbers not reached, a road or park closure) and what the traveller receives each time. A full refund or a free date change is the norm, and saying so in writing builds trust.

Be specific about minimum numbers. If a departure needs four people to run, tell travellers at booking and say how many days before departure you will confirm it.

Think about events outside anyone's control, such as natural disasters, strikes or government travel restrictions. You cannot predict every case, but you can say what you will do: offer a date change or credit, refund what you have not already spent, and recommend travel insurance for the rest. Avoid promising blanket refunds you could not afford during a major disruption, and avoid wording that tries to remove rights travellers have by law. If you sell package holidays in places with package travel regulations, those rules may require refunds within a set period when you cancel, so check them.

Show the policy everywhere it matters

A policy only works if travellers see it before they pay. Hiding it in a footer link invites disputes and one-star reviews from people who genuinely did not know. Put a short summary in each of these places:

• On the tour page, near the price and the booking button, ideally as a one-line summary such as 'Free cancellation up to 24 hours before'.
• On tour cards and listings, as a short badge when free cancellation applies, because it is a strong reason to click.
• At checkout, with a tick box or a clear line stating that the traveller accepts the terms.
• In the confirmation email and on the traveller's booking page, so they can find it again without searching.
• In the feeds and listings you send to resellers and marketplaces, so the policy a traveller sees elsewhere matches yours.

Mistakes to avoid

Most cancellation disputes come from a small number of avoidable mistakes:

• Vague timing such as 'with reasonable notice' or 'close to departure'. Use hours or days, and say whether they count from the start time or the date.
• One policy for every product. A sunset kayak and a three-week expedition have very different costs; give each its own policy.
• Different wording in different places. If the tour page says 48 hours and the confirmation says 72, travellers will hold you to the more generous one.
• Forgetting time zones. 'Twenty-four hours before' should mean 24 hours before the start in the tour's local time.
• No rule for no-shows, late arrivals or partial cancellations, such as one person in a group of four dropping out.
• Refunds that depend on one busy person remembering to process them. Decide who approves refunds and how quickly they go out.
• Never reviewing the policy. Look at your cancellation and resale figures every season and adjust the windows if they no longer match reality.

Cancellation policies in Tourtify

In Tourtify you set a cancellation policy on each tour: free cancellation up to a number of hours you choose, non-refundable, or your own custom wording. The summary appears on the tour page, and tour cards show a 'Free cancellation' badge when it applies. With the Deposits plugin you can keep a non-refundable deposit while the rest stays refundable. The Self-service plugin lets travellers move their booking to another date, or cancel it, from their booking page within the rules you set, and the Refund approvals plugin makes refunds above a limit you choose wait for a second person to approve them, with a full record of who asked and why.