When Stewart Sheinfeld redeemed 10,000 Starwood points for a night at the W Chicago Lakeshore, he found a strange new rule at the bottom of his confirmation. It said if he canceled his room after 6 p.m. on the day of his arrival, he wouldn’t just lose his points — he’d also have to pay $689.
“I was shocked,” he says.
Sheinfeld checked the W’s rates on its site, and found that they were $279. That meant instead of forfeiting his points for being a no-show, Starwood was threatening to charge him the rack rate — the hotel equivalent of sticker price — for the room.
“This makes the airlines’ rules look good,” he says.
Has Starwood lost touch with reality here?
I asked. A hotel representative responded with a prepared statement:
At Starwood, we understand that travel plans can change at the last minute and our Starwood Preferred Guest loyalty program has a generous cancellation policy. Our members can cancel their Free Award Nights by 4 p.m. the day prior to their stay. There are NO fees charged for these changes and ALL Starpoints are fully refunded.
We are aware there have been concerns raised about fees associated with the rare occasion when a guest does not show-up for their reservation, or cancels the day of the planned stay. While these fees were communicated at the time the reservation was confirmed, we have heard these concerns and have taken immediate action to better meet the needs of our valued members.
As of this week, guests who are “no-shows” for their reservations will be charged the typical rate for that night. This will be consistent across all hotels and, again, will be communicated upon reservation confirmation.
Does this mean that Starwood was charging its no-shows rack rate, and has changed to what it calls a “typical” rate?
A review of a popular online discussion forum, in which questions about this policy were first raised earlier this summer, suggests that may be the case. (An earlier discussion showed the company’s attitude toward those who question its policies. My favorite exchange is a Starwood rep telling angry frequent guests, “Frankly, I’m done here.” Ah, now that’s what I call customer service!)
But do customers lose both the points and have to pay the “typical” rate? Since each Starwood property sets its own cancellation policy, the answer is unclear.
More to the point, is this policy wrong? I can only imagine what would happen if airlines began charging its frequent fliers a “typical” fare if they missed their flights.
I think these rich cancellation fees undermine the point of a loyalty program. The idea is to reward your best customers — not to punish them.
(Photo: youngdoo/Flickr Creative Commons)
✓ Get the latest travel news, tips and commentary from Elliott’s E-Mail, the subversive newsletter from consumer advocate Christopher Elliott. You’ll travel like a pro. Sign up here. It’s free.
Similar Posts:
- Hotel rewards get generous
- Starwood devalues award points in a “pretty sneaky” way
- Is hotel “deposit protection” program a sign of things to come?
- Tip: for last-minute hotel stays, look online before you book
- No status for hotel stay
Sign up for my
{ 11 comments… read them below or add one }
Do you get your points back? If they keep the points AND charge you, I’m pretty sure this cannot, in any way, be legal.
When a rewards night is not used, the hotels should (and are entitled to) only to deduct the points; whether the room is occupied or not is irrelevant – indeed if they got paid without occupancy – they probably saved money on utilities, room maid /cleanup service and still got their points off their books.
Charging any money is UNFAIR. Period. Let alone ridiculous rack rates.
I would cancel Starwood membership and never go there again!
In defense of the SW customer service rep who monitors that discussion board, the forum is one of the most hostile places to ever try and post. The people on there can be rude and disgusting at times. I stopped using the site, which I used to use frequently, because people have nothing better to do than instigate. I have seen the comments of the SW reps in various other posts and they do the best they can. But just as any other place, when you deal with belligerent customers, there comes a time you just have to get away from them.
Hey – I was talking to a flight attendant the other day. The airline had a 3 hour flight delay which they told the passengers was a ‘ATC’ delay arising because Midway airport was ‘closed.’ Out of curiosity, I checked. Midway was not closed. Now, the weather had closed in to the point where the visibility was between 1/8th and 1/16th of a mile for about 45 min, but it cleared right out about an hour after the sun came up.
Now, I suppose the airline could have told passengers it was as weather delay- since – the REAL reason why the flight did not leave on time was because a) the airline could not service passengers at O’Hare and b) the weather was below the operational dispatch limits in its’ insurance policy – it had NOTHING to do with 1) ATC delays or 2) a closed airport -since the airport never formally closed. The weather was too low for the flight to be covered by the insurance carrier – so – they delayed the flight.
The point is the casual method that the airline lied to the passengers. I realize that the statement “weather is below operational minimums” might be vague to the average passenger – the reality is that if the flight had left on time – by the time they got there – the weather had lifted. the reason the flight did not leave was that they did not want to spend money to divert in the event the weather did not lift.
That all being said – the casual nature of the lie means that the next lie, and the one after that, become easier and easier to tell, or – in the words of famous queen, “let them eat cake”
I don’t know if I’d agree that charging any money is unfair, but charging $700 is ridiculous, as it does not reflect the true cost of the room. It doesn’t matter what the so-called rack rate is, it’s a rate that is probably never used. I can see logic of charging a fee because if the guest doesn’t show, the hotel could have sold that room to a paying customer. But charging a fee plus taking the points is double-dipping and akin to double-charging the customer.
Basic consumer law should cover this, and trump any so-called “policies” — these are retail transactions, not specialized contracts negotiated by lawyers, where weird penalties and contract terms may be acceptable.
The simple fact is that if you purchase/pay for a product, and choose not to use it for whatever reason, the seller’s recourse should be limited to the original price paid (in this case, the points). The hotel suffers no loss from someone not physically occupying the room, since it’s already fully paid for.
Now, if they want to have an option to restore the points for $X dollars, that’s okay, but that requires both the hotel and the customer to approve of the deal.
I absolutely despise this practice. Hilton has adopted it as well. I believe that the forfeiture of points is appropriate but charging the rack rate, or any rate is unethical and should be illegal. Maybe someone will file a class action.
However, we need to understand why this policy exists. Hotels redeem loyalty points with the corporate office. A Starwood category 4 hotel generally gets about $45 per night when a guest redeems points. However, if the hotel is nearly sold out, the property gets more money. The rub is that the property only gets money if the guest actually checks in. If the guest doesn’t check in, the hotel gets $0.00. Thus, the only recourse is to charge the guests.
That happened to me once, and I refuse to ever darken the doors of that particular hotel. But the real villian is the corporate office. They should payfor no-shows.
I think in these desperate economic times, service industry executives forget common sense and just don’t think very well. The bad economy is forcing people to cut back on spending or at the very least allocate limited funds to fewer activites. So, knowing this, any competent and intelligient executive or manager would and should recognize that competition is fierce for these limited funds. So, the goal here is to ATTRACT people to your business not turn them off and push them away. I think people in general are very loyal, even in bad times they tend to stick with their loyal brands UNLESS they feel that they are being cheated or taken advantage of. I know personally that though I may have cut down the number of stays I make, however when I do, I tend to stick with my brand, Hyatt Regency because they don’t leave me feeling like I had just been ripped off. Why would you continue to be loyal to a company that starts to cheat you and steal from you? Would you continue to be friends with someone who stole cash from you just because he is in a dire financial state? That’s exactly what the airliens and some hotels are doing with these so-called “fees.” Airline executives and lately some hotel managers forget the reason why they are in business..to provide a service for customers. Don’t bite the hand that feeds you! There’s no better time than during bad times to treat your customers well. Remember, the customers are also struggling financially.
So, bottome line airline and hotel execs…treat your customers well in good times AND bad and the customers will remain loyal to you!! Don’t become petty and start ripping them off because in the end that $689 is just a short term gain!
I would guess that the reason for this policy is that the hotel gets the money and Starwood gets the points. I wager that Starwood does not pay the hotels for a points room that is a no-show. So, the hotel charges the guest its no-show fee, whatever that may be. I would bet it is the rate they reserved at or the rack rate as a default if there is no rate. That makes some sense, although it is still unfair. It would be fair for Starwood to pay the hotel whatever they were going to pay and keep the guest’s points. That IS what the guest agreed to, X room on X night at X property for X points. Showing up optional. A 6pm same day cancellation IS generous but charging someone the highest possible rate AND taking the points needed for a “free” night is double charging and completely unfair. Starwood should rethink this policy and be aware that having guests who earn enough points for free rooms is a GOOD thing and keeping these customers is as easy as continuing to provide the same products and the same service at the same price.
There is a way to have the hotel claim the points instead of the cancellation fee:
http://www.starwoodhotels.com/preferredguest/legal/spg_terms_popup.html
“9. USE OF STARPOINTS: HOTEL AWARDS
9.1 Participating Property standard guarantee policies and cancellation policies apply for all hotel Awards, as well as all other reservation and use of services requirements. These requirements include standard reservation requirements such as, but not limited to, minimum length of stay requirements, credit card guarantee requirements, and charges for late cancellation, no-shows, and early check-out fees. Cancellation policies vary by property. Failure to cancel a guaranteed reservation within the permitted cancellation time will result in the cancellation fee charged by that property. Participating Properties will charge any fees to the credit card provided withthe reservation. A member may request a refund of such fees and the forfeiture of all or the applicable portion of Starpoints from their award, in lieu of the fee, to satisfy the penalty by e-mailing their request to chargechange@starwoodhotels.com no later than 60 days after the reservation arrival date.”
Make you work for it, don’t they? The paperwork must be a pain in the you-know-where.
{ 1 trackback }