Hilton tests $50 “cancellation” fee

Hilton is quietly testing a new $50 cancellation fee for reservations canceled any time after you book a room.

The charges apply to bookings made through the end of business today at 20 U.S. hotels, including Hiltons, Embassy Suites, and Doubletree. If adopted, they could add another layer of complexity to the company’s current cancellation policies, which state that room cancellations made after 11:59 p.m. the night before the stay begins will incur a penalty of one night’s room rate and tax.

The new policy doesn’t apply to Hilton HHonors members.

Hotel cancellation policies have long been a source of contention between travelers and the hotels themselves, and this policy — if adopted chain-wide — are unlikely to help.

No one likes to pay for a room they’re not using. But hotels hate to lose what they thought was confirmed revenue.

Not all cancellation policies are equal, nor should they be. A small hotel may have a much harder time filling a canceled room than a large property, especially close to the arrival date. And holidays and peak convention times justifiably have tighter restrictions.

From the hotel’s point of view, the situation has been exacerbated with various apps offering last-minute discounts. Savvy price-conscious travelers might book a hotel, check just before travel to see if they could get a better deal at another property, and then cancel the first booking.

Last year, Hilton and Marriott decided to implement systemwide rules saying that a room must be canceled the day before arrival or the traveler will forfeit one night’s stay. Now, that addresses the discounter problem, but it does upset travelers whose plans really do change, or who get sick at the last minute.

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I actually only learned about this new test because THOR travel services, one of our agency’s consortium groups, worked out a deal with Hilton to waive the policy for THOR corporate users and sent us an email about it.

Apparently, Hilton still feels like too many travelers are canceling bookings, whether or not it is in search of better rates. And there’s no word on whether the proposed policy would allow a guest not to cancel per se, but to modify the booking down to a lower available rate.

With luck, Hilton will decide these new fees are a bad idea. Or perhaps they will only institute mandatory cancellation fees in high season at certain properties.

On the other hand, how many fees has the travel industry met and decided they didn’t like?

Would you pay a $50 cancellation fee for a hotel reservation?

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Janice Hough

I've been in the travel industry since I graduated from Stanford. Back in the days when computers were new, and air travel was comfortable. These days I'm also a travel and comedy writer. All opinions are strictly my own, and not necessarily those of Elliott.org

  • Resist this now, travelers, or it’s going to stick, and spread.

  • Annie M

    And they will come here to complain about it when a traveler is affected.

  • NotThatBrooklynGuy

    “…holidays and peak convention times justifiably have tighter restrictions.”

    I have to disagree with you. You can rent out a shack in the backyard at peak times so the need for tighter restrictions is lower.

  • Kairho

    This will die in the marketplace as I doubt few other chains and independents will follow, especially with OTAs marketing heavily based on free cancellation (up to a point, of course).

    [Also, fix that second paragraph as it doesn’t say what you want it to say.]

  • Mel65

    I have no problem with a hotel charging a penalty within a certain window, say less than 24 or 48 hours out if a room is cancelled, but charging a fee for cancelling ANY time after booking for cancellation is ridiculously punitive.

  • sirwired

    This is odd; I mean, to avoid it all you have to do is join Hilton HHonors, which is free and takes like two minutes. Since that’s the case, why bother? I mean, people that just sign up for HHonors to avoid the cancellation fee aren’t really going to be worth anything, as it’s unlikely they will magically transform into point-collectors.

  • RightNow9435

    Any hotel (or hotel chain) with a cancellation fee such as that is a hotel I won’t be staying at. Besides being morally wrong to charge such a fee, my plans are too flexible to ever commit to something like that.

  • Grant Ritchie

    Hi Kairho,

    I’ve reread the second paragraph several times, and can’t see what might be wrong. Would you please fill out our Letter to the editor form (at: http://elliott.org/letter-to-the-editor/) and let Chris know what’s wrong so he can fix it? Thanks.

  • Because it’s a foot in the door. You say nothing and sign up for basic HHonors to avoid the fee now, and by next year there will be a requirement that you have to be in a paid high tier of HHonors to qualify.

  • MarkKelling

    I just went to the Hilton web site and looked at reservations. Not a single one of the 15 random choices I made mentioned anything about a $50 cancellation fee.

    There are multiple cancellation requirements depending on the brand of Hilton you choose. Some say cancel by 4 pm day of arrival. Some say cancel 24 hours before arrival Some say the day before arrival (not sure how that differs from the 24 hours option). AAA rates give you until 4 pm day of arrival.

    So I went searching for details. Turns out there are only a total of 20 hotels in the entire Hilton group that this fee is being tested at. Was not able to find a list. But from the comments in the news stories on the ‘net, it appears it is at those hotels with the highest occupancy rates and the highest no-show percentages. I guess it makes sense that if your hotel is running close to 100% occupancy, those no-shows do eat into your sales numbers.

    The hotel is free to charge whatever fees it wants. And just like with Resort fees, if I don’t like them I will choose to stay elsewhere.

  • Rebecca

    My guess would more be that the amount of marketing revenue they collect STILL makes them money. They have all of your personal information, and they ask about your “habits” and track them when you sign up. So they can sell you out I another way

  • RightNow9435

    until, like most airline fees, EVERY hotel chain does it, and the only choice you have is to be a walk-in if your plans aren’t in concrete

  • Jim Daniel

    It’s simple enough to book a hotel that DOES NOT charge a cancellation fee. I will do exactly that, thank you.

    Currently, I may book three or four different rooms for the same trip to get the best advance rates, and then, once I have set my appointments for that trip, cancel one or even two of the three to fit the most appropriate schedule for my business. I do not control my clients schedules, they control mine, and I am not in the business of purchasing extra lodgings just to support the hotels I patronize.

    When I cancel, I do so as far in advance as I can, not to be cavalier about it, I just do what it takes to make a living and service my clients.

  • Jim Daniel

    You are absolutely correct here. I agree that the charge is superfluous and not very business friendly in most cases, but there may also be a sensible time limit.

    I OFTEN have reservations that must be cancelled 24 or even 48 hours in advance of arrival to avoid a penalty. That makes perfect sense to me.

    In fact, I am sometimes surprised when the reservation says must be canceled by 6:p.m. the day of arrival to avoid charges – that’s too short for the hotel in my opinion (even though I have paid for unused nights when things went really wrong and I missed this deadline).

  • judyserienagy

    I’ve been kinda ‘expecting’ this for several years … booking online and changing that booking online is such an easy thing. Booking months out to be sure you get your chosen hotel, then following the rate down over the months is so easy to do. But I doubt if $50 xll fee will fly … people will just avoid booking Hilton properties. Why would you tie yourself into that kind of agreement? And the OTAs will have to pass the xll fee through to the guest. So unless all the major chains take up this policy at once, it won’t work.

  • Fishplate

    ” I just do what it takes to make a living”

    As does the hotel.

  • BMG4ME

    It’s already common practice to have non refundable rooms. Hopefully this new policy would only be for the very cheapest rates. Otherwise all this will do is make people book later, meaning that hotels won’t be able to charge more for last minute bookings (or offer discounts for booking early).

  • doug_jensen

    I am in favor of hotels — AND RESTAURANTS — having a cancellation fee. For hotels, the “before 6 PM” rule was extraordinarily generous, so 24 hours is realistic. But “any time after making the reservation” is pretty onerous, although it is a rational response to the on-line reseller customers who make changes. I consider a reservation at a hotel or restaurant a binding contract, and I expect that if I abrogate that contract–even for reasons beyond my control–I may pay a penalty, or maybe not, depending on the hotel or restaurant and the circumstances. I hope that every hotel and restaurant (requiring reservations) will follow Marriott’s 24 hour cancellation charge policy–and discuss each case with the customer on its merits to decide whether or not the charge is justified.

  • just me

    Risk of doing business is shifted to a consumer again. The $50 for no-show is probably more profit for Hilton than if you did show.
    Will they keep my room available for me until check-out time?
    I have avoided the hotels with such fees and I will add just one more if I loose my Hilton Honors. They will get what they wish so they will have more rooms for those who don;t care.

  • MistarNeutral

    This is an easy one, especially as we run photography tours . . . . we’ll take our business elsewhere.

  • pauletteb

    I noticed this cancellation fee while I was making hotel reservations in DC for my employer last week. The language has been tacked onto the end of the old cancellation notification (1 day, 24 hours, etc.). The notice does say that HHonors members are exempt from the fee.

  • pauletteb

    The reservations I made in DC are definitely NOT for “holiday or peak convention times.”

  • Maxwell Smart

    the cheapest hotel rates, as with the cheapest airfares should always be totally Non-refundable.
    Pay in advance & get best deal.
    Why do hotels even offer, JUST SUPPLY YOUR CREDIT CARD. Charge it & give me a better rate.
    If then, need to change plans, pay for change.
    90%+ of the time, won’t be any changes.

  • LonnieC

    The first part of that paragraph states:”The charges apply to bookings made through the end of business today…” If so, then starting tomorrow Hilton will not be applying this new $50 charge. I don’t think that’s what is meant and I’d guess that’s what Kairho meant.

  • Grant Ritchie

    Thanks guys,
    I think you’re right. I’ve asked the writer to take a look at it and correct as necessary.

  • Grant Ritchie

    Me again,

    I’ve heard from the writer and the wording is correct. In mid-November, Hilton rolled out the new fee as a test which ran until Dec. 21. Insiders say the fee will be rolled over into 2016, but no official announcement has been made yet.

  • LonnieC

    Okay. We’ll have to see how it plays out. Very interesting….

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