How to Calculate Cancellation Rate

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Cancellation Rate Calculator

Your Cancellation Rate is:

0%

Understanding the Cancellation Rate Formula

The cancellation rate is a vital Key Performance Indicator (KPI) used across various industries, including SaaS, hospitality, e-commerce, and professional services. It measures the percentage of orders, bookings, or reservations that were rescinded compared to the total number of transactions initiated.

The Mathematical Formula

Cancellation Rate = (Total Cancellations / Total Bookings) x 100

Why Monitoring This Metric Matters

  • Revenue Prediction: High cancellation rates often lead to unstable cash flow and missed revenue targets.
  • Customer Satisfaction: Frequent cancellations may indicate friction in the user experience or dissatisfaction with the value proposition.
  • Operational Efficiency: In industries like hospitality or healthcare, cancellations create "dead time" that could have been filled by paying customers.

Example Calculation

Imagine you run a boutique hotel. Last month, you received 400 total room reservations. Out of those 400 bookings, 32 guests canceled their stay before arrival.

  1. Identify total bookings: 400
  2. Identify cancellations: 32
  3. Divide 32 by 400: 0.08
  4. Multiply by 100: 8%

In this scenario, your monthly cancellation rate is 8%.

Common Benchmarks

While "healthy" rates vary by industry, here are general guidelines:

Industry Average Rate
SaaS Subscriptions 3% – 7%
Hospitality (OTA Bookings) 20% – 40%
E-commerce Orders 1% – 3%
function calculateCancellationRate() { var totalBookings = document.getElementById('totalBookings').value; var totalCancellations = document.getElementById('totalCancellations').value; var resultArea = document.getElementById('resultArea'); var finalRateElement = document.getElementById('finalRate'); var interpretationElement = document.getElementById('interpretation'); var total = parseFloat(totalBookings); var cancelled = parseFloat(totalCancellations); if (isNaN(total) || isNaN(cancelled) || total total) { alert("Cancellations cannot exceed the total number of bookings."); return; } var rate = (cancelled / total) * 100; var formattedRate = rate.toFixed(2); finalRateElement.innerHTML = formattedRate + "%"; resultArea.style.display = 'block'; var message = ""; if (rate < 5) { message = "Excellent! Your cancellation rate is very low."; } else if (rate < 15) { message = "Moderate. This is within a manageable range for most industries."; } else if (rate < 30) { message = "Warning: Your cancellation rate is high. Consider analyzing the cause."; } else { message = "Critical: Over 30% of your business is being canceled. Urgent action required."; } interpretationElement.innerHTML = message; }

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