Hilton Wants to Impose 7 Day Cancellation Policies, Charge You More for Flexibility

It was only 3 years ago that Hilton moved from generally allowing same day cancellation of hotel reservations to requiring cancellation the day before to avoid charges.

Last month Marriott rolled out a change to require cancellation 48 or 72 hours prior to check-in and Hilton matched with its own 48 hour check-in requirement.

If Hilton hadn’t matched, Marriott would have been left on its own at a disadvantage against a major competitor. Since Hilton did match, Marriott announced their intention to implement the change more broadly.

  • The goal is similar to airline revenue management. They want to lock customers into higher prices they may book rooms at (offering them the security of having the room at the hotel they want) while being able to dump unsold rooms last minute at a discount without sacrificing revenue from those early booking customers willing to pay more.

  • They’ll pick up some cancellation fees they wouldn’t have otherwise. And those they hope will mitigate revenue given up from lost business.

  • But customers will likely shift towards booking more last minute. It’s hard to expense a business travel room you don’t use. And unless you need to be at a specific hotel for a conference, in most cases it doesn’t really match which hotel in a given city you stay at within a range of options. It’s rare for a city to sell out completely.

  • My own plan is to still book in advance and then evaluate how likely a sellout is closer to arrival. When hotel rates haven’t jumped I’ll probably cancel three or four days out on the chance I need to cancel a trip at the last minute.

Conrad Koh Samui

Deanna Ting at Skift Hotel corporate booking codes may be the answer to retaining last minute cancellation flexibility.

Hilton, though, has a plan to become even stricter with cancellations — and to charge more for flexibility.

Expect Hilton to debut new rate structures that enable more flexible cancellation policies. “We have been testing some other things,” Nassetta noted. “Hopefully sometime in the second half of the year we will layer incremental opportunities on top of that that will start to bifurcate … creating fully flexible and semi-flexible pricing structures that would require a cancellation within seven days.”

Seven day cancellation!

Many resorts of course have farther-out cancellation policies. This is especially true in places where rooms are limited, customers tend to book farther in advance, and it’s difficult to replace last minute cancelling guests.

However it’s not clear how this will all shake out for individual properties across varying markets, and certainly there are many hotel owners nervous about the changes.

Conrad Bangkok

Finally, on Hilton’s new exclusive co-brand credit card deal with American Express, they may benefit incrementally “$50 to $60 million in 2018” and the deal also provides for “lower transaction and processing fees” for hotels.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Meh – I travel regularly for business, am a Hilton diamond, and can’t imagine how this would change my booking behavior. There’s literally no conceivable scenario in which I’d have to cancel within 7 days and that the company would not cover that cancellation fee/charge.

    Heck, I just booked a Hampton Inn that had a 14 day cancellation policy on the HHonors ‘discount’ rate.

  2. I’m Hilton Diamond and IHG Spire and Ambassador. I use a corporate business code. Lately I’ve found that not even my corporate code will allow last minute cancellations at all hotels. It’s getting worse. Many times I do need to cancel, not so much to avoid staying at a hotel but I need to move locations due to business needs.

  3. remember, just move the reservation, then cancel. it doesn’t matter how many days they make the “policy.” problem solved.

  4. I think this will simply mean

    – savvy or veteran customers will simply re-check the prices 21, 14 and 8 days out instead of 21, 14, 8 and 2. I do this with any long term reservation I make. Once a week, at work, on my lunch just go through and see if there is a better price.

    – people who rarely travel will get burned once and not stay at the chain again.

  5. Perfectly fine for resort properties particularly for periods of extremely high demand. As vacation airfare is often non-refundable this will not be a big deal and any loss can be mitigated by travel insurance (sometimes even included in credit cards such as CSR).

    However this will not work for business customers who book business hotels. There is already less incentive to book Hilton due to massive devaluation of HHonors and inferior perks compared to competition. Just one more reason to go with another provider. And yes it is a pain to expense a hotel “no show”

  6. John, Marriott allows this, but some hotel Websites do not. My present Hilton Garden Inn ressie does not, now that I’m inside the 72-hour policy. Then again, I booked it with a special free night cert.

  7. Airlines get away with it so why not hotels?

    Hilton has been my go-to this year above Hyatt (who has disappointed me one too many times). I’m diamond with both anyway, but a cancellation policy change like this would certainly affect me. I don’t know: for me it’s bad news and it will make a difference when picking a hotel.

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