Wash (Cancellation Wash)

Wash (often called cancellation wash) is the gap between bookings on the books and the rooms that will actually be occupied after cancellations and no-shows have played out. Revenue managers use historical wash rates to "dirty down" their forecasts so they don't overestimate true demand.

Why it matters

A reservation count of 100 doesn't mean 100 occupied rooms. If history shows that 15% of bookings for a given segment cancel before arrival, the manager applies a 15% wash factor and forecasts 85 occupied rooms. Without that adjustment, hotels under-book during periods that look full on paper but won't actually fill.

Drivers of wash

• Cancellation policies — free-cancel rates wash more than non-refundable
• Lead time — bookings made far in advance wash more than near-term bookings
• Channel — OTAs typically wash more than direct
• Segment — leisure typically washes more than corporate negotiated business
• Seasonality — wash rates change across the calendar

How it's used in overbooking

Hotels use wash rates to set safe overbooking levels. If wash is reliably 12%, the property can confidently sell ~110 rooms for a 100-room building knowing the expected occupancy is right around 97.