The rising cost of booking inflexibility: Why customers expect refund options

Flexibility is no longer a luxury; it’s expected

Over the past few years, the travel and events industries have undergone a significant shift. What was once considered a premium perk, flexible booking options, is now the baseline expectation. Customers have grown accustomed to the idea that life can get in the way, and they want confidence that their money won’t vanish if their plans change.

The impact of this expectation is not just emotional; it’s commercial. Across verticals like transport, hospitality, ticketing, and even financial services, businesses see rigid, non-refundable booking policies quietly eroding customer trust, increasing cart abandonment, and ultimately hitting revenue. So what’s driving this shift, and what can businesses do to keep up?

The True Cost of Inflexibility

Traditionally, non-refundable bookings made sense for suppliers. They reduced uncertainty and helped forecast revenue. However, as customer expectations evolve, that rigid model costs more than it saves.

Consider this:

• Abandoned carts: In a global survey by Expedia, more than 50% of travellers said they’d abandon a booking if there’s no refund option.
• Chargebacks: Customers who feel trapped in a booking they can’t use are more likely to initiate a chargeback, creating financial and reputational risk.
• Lost loyalty: A single bad experience can stop a customer from ever booking again. Especially in highly competitive industries like airlines and event ticketing, customer experience can make or break retention.

Ironically, many businesses still assume they’re protecting their bottom line by sticking with non-refundable fares or tickets. In reality, the rigidity may be undermining long-term profitability.

Why Customers Now Expect Flexibility

A lot changed during the pandemic. Customers grew used to cancellations, postponements, and rebooking policies. But more importantly, they realised they could get flexibility, often at no extra cost.

Now, with the pandemic behind us, those expectations haven’t gone away. They've crystallised.

• Customers value peace of mind: Whether it’s a £40 ferry ride or a £400 hotel stay, customers want to feel protected if life throws a curveball.
• Planning is happening earlier: People are booking experiences and travel well in advance again, which increases the chance that plans might change.
• Younger generations are less tolerant of rigid policies: Studies show that Gen Z and Millennials are more likely to engage with brands that offer choice and responsiveness.

Cross-industry signals: What the data tells us

We’ve seen flexibility take centre stage across industries:

• In air travel, the rise of “fare families” has meant that some refundability is now baked into upgrade options.
• In event ticketing, offering refund protection can increase basket conversion by up to 15%.
• In hospitality, hotels with flexible cancellation policies report better OTA rankings and improved occupancy.

Offering refund options improves the customer experience across the board, and it boosts the bottom line. In a world where margins are tight and competition is fierce, this shift matters.

The opportunity: refunds as a revenue driver

There’s a misconception that offering flexibility always comes at a cost. But with the right approach, it can be a revenue opportunity.

That’s where upgradeable refunds come in; customers can opt for refund protection for a small fee during checkout. They pay for the flexibility they want. The business gains a share of that revenue and strengthens customer trust. Everyone wins.

This approach is especially powerful when powered by AI or behavioural data. Instead of offering one-size-fits-all options, refund solutions can be personalised based on customer type, booking value, and context.

And unlike traditional insurance models, refund-first thinking doesn’t rely on lengthy forms or complex exclusions. It’s quick, contextual, and human.

How Businesses Can Respond

If you’re in travel, hospitality, events, or fintech, the takeaway is clear: customers don’t want inflexible policies. However, offering blanket flexibility might not work for your commercial model either.

Here are some steps to take:

1. Review your refund options: Are you only offering “non-refundable” or “fully flexible”? There’s space for something in between.
2. Consider embedded refund upgrades: Let customers choose flexibility at the point of purchase without redesigning your core product.
3. Monitor customer behaviour: Use data to see where customers drop off and whether refund options impact conversions.
4. Train your teams: Ensure marketing, CX, and sales teams understand how refund solutions fit into the customer journey, not just as a cost centre but as a conversion tool.
   

Protecting Trust Protects Revenue

In a landscape where loyalty is fickle and choices are abundant, refund flexibility is no longer a feature; it’s a signal. It tells your customers that you understand their world, value their plans, and won’t punish them for things outside their control.

Businesses that respond to this expectation with intelligence, care, and smart integrations will win not just more bookings but better relationships.