Late hotel cancellation policy can hit the business tourism budget

Published on : Tuesday, July 18, 2017

marriottLast-minute business travel changes can be now a costly affair for the corporate groups, as more hotels will impose 48-hour minimums for cancelling a stay without penalty.


Marriott International, which recently acquired Starwood Hotels and Resorts, was the first to apply this new policy. Last month, it put into effect a 48-hour cancellation policy for new bookings within the Marriott and Starwood brand families in the United States, Canada, the Caribbean and Latin America. Hilton Worldwide in the United States and Canada adopted a similar policy.


However, there are exceptions. Marriott’s policy does not include its Design Hotels or its time-share properties, and Hilton says franchised hotels can opt out of the policy if they choose. Some other, however, might need 72 hours’ notice to cancel and is more applicable in busy cities or resort areas.


In their favour, the hotels say that they have to shield themselves from the travellers who try to manipulate with the booking system. They cancel on short notice in the hope of being able to quickly rebook at a cheaper last-minute rate. This has become a growing issue with the proliferation of sites and apps because booking has become nearly effortless.


The new policies, hotels say, will increase the availability of rooms in locations like New York City, where occupancy is high and rooms can be scarce. However, according to some business travel experts and managers, the new policy will effectively punish them for circumstances outside their control.


Industry experts predict that other brands will consider their own 48-hour cancellation windows — if they haven’t already.


The proliferation of third-party booking tools had made hotels’ jobs more complicated. Since hotels have to contend with a rising number of cancellations, they have to depend on the third-party sites or apps, and sometimes at considerable expense.


Industry experts say big companies will try to negotiate more flexible terms for their travellers when their contracts come up for renewal. (Existing corporate contracts supersede the new policies.) However, entrepreneurs and smaller businesses have less recourse.

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