On January 1, Hyatt changed its cancellation policy so that guests who cancel bookings less than 48 hours in advance will now have to pay a penalty equal to one night’s stay. The change brings Hyatt in line with the Marriott and Hilton chains, both of which tightened their cancellation policies last summer. The good news for frequent travelers is that members of loyalty programs will not be charged a penalty.
For business travelers, the impact of stricter cancellation policies can go both ways; on the one hand, it could make last-minute bookings easier as hotels have more warning about inventory availability, but on the other hand, travelers often have no say when a client cancels a meeting or sales call, and out-of-pocket expenses could add up pretty quickly.
The Business Travel Coalition polled 216 travel managers and travel management company executives in 12 countries and found that the cancellation policy change is deeply unpopular. Fifty-nine percent said they would choose another lodging company, although 53 percent said they believed that other hotels would follow suit.
Steve Reynolds, founder and CEO of TRIPBAM, Inc., believes that this could be an opportunity for other chains. He says, “If I was a secondary player and I could steal share away from the big guy, I might play that card. I might even get rid of my cancellation policy just to show them some love.” He also points out that travelers from small to mid-size companies will feel the most pain from this policy. They will now have to pay the extra dollars for a refundable room if they believe there is a possibility of cancellation. Reynolds says, “It would be suicide to apply fees to large corporate clients,” noting that they have the option to take their business elsewhere if the corporate rate they negotiate doesn’t include penalty-free cancellations.
Meeting planners will probably not feel much impact from the change in policy. Elizabeth Scudderi, senior meetings manager at the American Association of Pharmaceutical Scientists, says for large group bookings she will negotiate a cancellation policy. But she is also sympathetic to the hotels, she says, “I understand why they are doing this. I was a hotelier for 18 years.” However, when asked if someone from her organization were to incur a late-cancellation fee would she use her leverage from large group bookings to get an exemption, she says, “Yes, for sure.”
Travelers who are not in a loyalty program can still avoid a cancellation penalty by changing the date of a reservation at the last minute, rather than cancelling outright.
