Hilton Changing Global Cancellation Policy

Several weeks ago, Marriott announced that they would be updating their global hotel cancellation policy as of January 1, 2015.

Through this new policy, guests will have until 11:59PM the day before arrival to cancel their reservations without penalty. This was both good and bad news, depending on the property.

Some hotels previously required you to cancel by check-in time the day before arrival, while other hotels let you cancel all the way through the day of arrival. About three quarters of Marriott properties fit in the latter category, so overall it’s a negative change, in my opinion.

Not surprisingly, Marriott isn’t the only hotel chain to make such a change. Hilton will also be updating their global cancellation policy as of January 1, 2015. Here’s what HHonors Representative posted on FlyerTalk:

I wanted to share a quick update with you. We are updating our reservation cancellation guidelines to a minimum of 11:59 p.m. local hotel time the day prior to arrival, and you will be required to provide a credit card at the time of booking.

These changes will go into effect on January 1, 2015. As always, cancellation policies may still vary depending on the rate or dates of your reservation, and some hotels have more restrictive policies in place, so please refer to your individual confirmations to verify their policy.

We’re making this change so that we can provide you with a more consistent booking process and make more rooms available for when you need last minute travel accommodations.

What’s interesting here is that unlike with Marriott, Hilton isn’t trying to create a new standard cancellation policy, but rather 11:59PM day before arrival will be the minimum cancellation policy. In other words, presumably hotels that made you cancel 24 hours before arrival aren’t changing their policy, but rather only hotels allowing cancellations day of arrival will be changing their policy.

Here’s the current cancellation policy for many properties:

Hilton-Cancellation-Policy-1

While here’s the new cancellation policy for those properties:

Hilton-Cancellation-Policy-2

Bottom line

As much as I’d like to hold this against Hilton and Marriott, I really can’t blame them. I went to a restaurant last night with my parents where we couldn’t get a table, since they were totally booked for the night. So we had dinner at the bar. Throughout our dinner there were at least a dozen empty tables, I guess from no shows.

The same thing is true of hotels. Hotels have a better shot at reselling rooms if they know who’s not going to show the night before, as opposed to only the afternoon of. Yes, they can oversell the hotel to account for the cancellation and no show rate, but that’s also a liability for them, since at times no shows can be difficult to predict, especially for airport hotels.

Of course I’m not happy about this change as a consumer, but I do see the hotels’ perspective on this as well.

Lastly, since Hilton seems so intent on following Marriott’s lead, here’s to hoping they’re also quick to add free wifi for all HHonors members… 😉

Comments

  1. Ben, all of your pro-hotel comments are correct but how about capping late cancel fees at a certain dollar amount ($100?) or room and tax, whichever is less. Heck, even the anti-consumer airlines cap their change fees and cancel fees.

    You forgot to address the fact that if you are a late cancellation at a hotel, they charge you the full nights room and tax and you do not receive either your points or a room credit for that stay. I guess if they happen to resell the room they just collect two nights rates for one room and only have to award points to one customer. How is that remotely fair or even legal?

  2. @RoloT – Like airlines, hotels are allowed to charge non-refundable rates or have cancellation rules that may lead to windfalls on occasion (having two people pay for a room on the same night). I see no reason why that would be problamtic under the law.

    As for taxes, that is a closer question. It differs by state since all hotel taxes are administered by state/county/city/town etc.. However, depending on the type of tax (and there are many many different types), often the hotel must refund the tax. The only way to find out for each hotel is to call them or go on the city/state tax website and see if the website answers the question. I normally try to find out the answer before calling the hotel since even the front desk workers don’t always know.

  3. Are we ever in our lifetimes going to hear something positive from Hilton?
    Its always a devaluation or a negative change that’s worse for its customers
    Never an improvement
    I went from 60 stays a year to 7
    They wont be happy until its 0

  4. @ RoloT — Well it’s legal because their terms are very clear about the rules. But I agree that’s not right at all. That being said, they are upfront about the rules, so don’t think we have too much of a right to be angry about that.

    But agree that it’s frustrating, I just think this change specifically does make sense.

  5. dwonderment…..amen. I will lose 7 year diamond HH status at the end of the year. I have exactly 4 hilton nights so far this year. I doubt I’ll even bother with HH credit card.

    It’s not only hilton that seems to constantly “take-away,” but they sure do seem to be leading the race to the bottom.

  6. Usually when I cancel within 24 hours it is because I’m stuck at an airport or I miss a flight due to a tight connection. So this new policy is not a welcome change for me.

  7. Ben, with all due respect, while your business is travel, you don’t really travel for business. Plans change frequently and often at the last minute. This type of change is simply not friendly to the business traveler.

  8. There is a middle ground here that is being ignored. A reasonable cancel fee would prevent most people from heedlessly making multiple reservations and canceling at the last minute. But the full room cost is excessive. Then to charge the full price and not give points or stay credits is unconscionable, even if legal.

    Unlike restaurants with no shows, where there is a total loss if a table goes empty, hotels charge extra for a cancelable reservation. So if a small proportion of guests no-show, the extra paid by those who do show up helps cover the cost of the empty room.

    The part that really makes my blood boil is knowing that if I cancel at the last minute due to no fault of my own, say a canceled flight or illness, the hotel will charge me the full rate, and then turn around and rent it out to someone else, doubling their profit. I think hotels should be required to do a full refund, no matter when you cancel, if they are able to rent out your room to someone else.

    I will certainly not cancel a reservation that will not give me any sort of refund. I’ll make them hold that room for me all night; no way I’m going out of my way to help them charge twice for the room. So if they are at full occupancy, and the room stays empty, they are going to miss out on any additional spending a last minute guest might have made at their restaurants or bars. I’m angry at being charged for a room I couldn’t use. And a person who wanted to stay there is turned away. That’s lose/lose for everyone.

  9. @ Ryan — Of course it’s not friendly for the business traveler, but at the same time it’s not friendly to the hotel when people cancel day of. I agree it’s not a consumer friendly change. But if rooms are going empty as a result of the policy, can you blame them?

  10. Lucky, unless you have access to numbers to actually indicate that, you’re just guessing. You assume they have good reason for this policy, and that they have rooms going empty. But I see no reason to assume that. They are trying to make more money at the expense of their customers. And yes, I can blame them.

    There is what is legal and what is right. I often get angry about terrible things that are nonetheless legal, because I think they are immoral or unethical, so your counterpoint that “hey, it’s legal, so it’s okay” just doesn’t work for me.

  11. Some of this is obviously intended to mitigate those who use Priceline, Hotel Tonight, or some other site to obtain a cheaper room on the day of travel when they know they don’t need to cancel, and use the reserved room as a contingency in case nothing is available cheaper at the last minute. It also lets hotels decide if they want to cut same-day rates to ensnare a couple of last minute reservations, and not worry about people rebooking.

    The people this will really hurt are not business travelers, but leisure travelers on driving vacations. Sure, some of these people double-book – maybe one hotel 250 miles away and one hotel 350 miles away. But many do not. Now one needs to lock in their travel the day before, without knowing for sure how they’ll feel the next morning or how the weather turned out.

  12. The main question that I want to ask/address is what will the rates look like to the additional room(s) that are now cancelled a day before? Since it is presumably putting more available inventory out there (in advance), will hotels be inclined to make them available/price them at low, ‘last minute’ rates? Or will they be marked at a higher rate? Just curious.

  13. @ Lucky — most hotels that I’ve seen offer a lower rate that is non-flexible and a higher rate that is flexible. When I book the non-flexibile rate (which I always do), I am buying the right to change my plans at the last minute. In other words, the hotel has been compensated for my right to cancel.

  14. @ Ryan — Right, no disagreement there, though hotels have always had cancellation policies of some sort. In other words, there are plenty of hotels that previously made you cancel a day before arrival, yet they still had flexible rates.

  15. From the dinosaur wing of readers…

    What happened to the day when applying a credit card to a reservation was optional, and totally in protection of the customer to guarantee the room past 6pm?

    The room was on “courtesy hold” if not CC-guaranteed, and would auto-cancel at 4pm or 6pm.

    Not bringing it up to whine (or just to wax nostalgic), but just to observe that the CC guarantee has become the norm, especially with on-line bookings. At the same time, the forfeitable “late arrival” guarantee (originally well-intentioned) has now become a de facto deposit which belongs to the hotel and not the customer.

    The guarantee has become for the hotel’s revenue, and not the customer’s late arrival. Because of technology, I never noticed it happening.

    I think they had it right to begin with. Don’t charge the “deposit” and release the room at a reasonable hour. Otherwise, the “double revenue” option is obvious and customer-unfriendly.

    Leave a “no-deposit” option and let the customer choose.

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