As Hilton Follows Marriott, 48-Hour Cancellation Policies Become An Industry Issue

Before Hilton followed Marriott down the path to a 48-hour cancellation policy, more than half of corporate travel managers said they believed the new policy would push their travelers to take their business elsewhere. But the point appears to be somewhat moot now, as Hilton followed suit and proposed extending its policy as well.

Marriott made waves in the industry when it extended its cancellation policy to 48 hours’ notice effective June 15; all cancellations beyond the time limit now are being charged a one-night penalty. The new policy applies to all Marriott and Starwood brands in the United States, Canada, the Caribbean and Latin America, and excludes only Design Hotels and time-share properties.

Following the news, 59% of corporate agents said they believed their business travelers would book elsewhere, in a Business Travel Coalition July 11 poll of 216 global travel manager and travel management company executives from 12 countries: the United States, Canada, United Kingdom, Ireland, Spain, Switzerland, UAE, Belgium, Bonaire, Serbia, Scotland and Germany.

Nearly one-third (30%) of the respondents to the poll said they were considering changing their corporate travel policies to restrict their travelers from booking Marriott properties.

“The new policy hurts business travel, which as we all know can change last minute,” one respondent wrote. And to add insult to injury, “Marriott is not even waiving the policy for Platinum Members.”

Numerous respondents shared similar concerns.

“Marriott and Hilton are the two top brands for business travelers in my experience.  I’d like to know what Hilton thinks of this. Might be time for them to run a triple points promotion and steal some business,” said one respondent.

But instead of taking the opportunity to steal market share, it appears to have set a precedent that Hilton quickly followed. Hilton proposed updating the default house cancellation policy to 48-hours for its managed properties.

“There’s certainly no question that the industry is thinking long and hard about different channels customers have to book room reservations,” Scott Berman, hospitality and leisure group leader at the consulting firm PwC, told the Times.

The new policy would affect Hilton hotels in the United States and Canada for new bookings at of the end of this month. Franchised hotels can opt out of the policy if they choose, while some hotels in busy cities or resort areas may require 72 hours’ notice to cancel.

“Corporate travel or group bookings will remain subject to cancellation policies stipulated in their contracts,” a Hilton spokesperson told TMR.

Both Marriott and Hilton first imposed their 24-hour cancellation fees in 2014.

“Hotels whose policy is to allow guests to cancel their room reservations on the day before arrival without incurring a fee are faced with a significant number of unsold rooms due to last minute cancellations,” a Marriott spokesperson told TMR.

InterContinental Hotel Group, parent company of Holiday Inn, also has a 48-hour cancellation policy. Hyatt hotels in the United States range from 24- to 48-hour requirements, but cancellations at the Ritz-Carlton can be made seven days in advance.