Cancelon: Buy and Sell Non-Refundable Hotel Room Reservations

People book pre-paid non-refundable hotel room rates for the primary purpose of saving money. Depending on the hotel property, the type of room, the location and other factors, the savings could be significant; whereas other times the savings only amount to a few bucks.

Unfortunately, life has a way of being interesting sometimes, causing plans to be changed where the guest no longer needs the hotel room but cannot cancel the reservation without losing some or all of their money which has already paid for the room in advance. Is the guest out of luck?

Not if Cancelon has its way, as this service — supposedly based in Israel — provides an option for people to buy and sell pre-paid non-refundable hotel room reservations. The idea is for the seller to cut his or her losses and recoup some of the money invested in a pre-paid non-refundable hotel room reservation, while the buyer saves money when compared to paying through more traditional channels, such as booking directly from the official Internet web site of the hotel or at a bidding site.

I found a reservation at the Westin San Francisco Market Street where the seller overbooked rooms for his or her wedding and must pay for them whether or not they are used. The seller supposedly paid $297.00 per night for the rooms for two nights, but is selling the reservation at $243.00 per night — a savings of $108.00 over the two nights, right?

Well, not exactly: at the official Internet web site of Starwood Preferred Guest, the room can be secured at a non-refundable pre-paid room rate of $277.00 for the same nights, reducing the savings by $40.00 to $68.00 for the two nights.

Is this service worth saving $34.00 per night in a hotel? I personally would say no, only because there are too many variables — such as whether or not one can take advantage of benefits as an elite member of Starwood Preferred Guest, which can significantly diminish the value of the extra $34.00 per night saved. Can Starwood Preferred Guest frequent guest loyalty program points be earned on this reservation? If not, that also diminishes the value of the savings of $34.00 per night. The room is still non-refundable, which most likely means that if the plans of the buyer changes, the buyer now has the problem of re-selling the hotel room reservation.

Then again, could there be a potential loophole if you purchase a hotel room reservation and sell it on Cancelon but keep it in your name, thereby earning you points on a hotel room reservation for which someone else pays — even if at a loss?

If the offer by the seller is too high, the buyer can submit a more reasonable offer. There is also a “buyer protection” policy to help thwart fraud, although I am unsure as to how effective it could be — especially if the buyer is responsible for attempting to change the name of the reservation in order to sell it, with a chance that the hotel in question may not oblige, regardless of whether or not it charges a fee for changing a reservation on a pre-paid non-refundable room.

There is an occurrence where Cancelon has potential value: purchasing a non-refundable reservation at a sold-out hotel, such as the Westin Peachtree Plaza in Atlanta later this month, selling for $250.00 per night. The room at this particular hotel property cannot be reserved at the official Internet web site of Starwood Preferred Guest, as it is sold out. I suppose that the seller could have an edge here in terms of what to charge if there is enough demand, such as for a major event during the period of the reservation.

Cancelon claims to have support 24 hours per day, seven days per week, and it accepts PayPal, American Express, Visa and MasterCard as payment options. Cancelon receives a 10 percent transaction mediation fee paid by the seller on the final price once the room reservation is sold, so the seller should ensure that this fee is factored into the sale price. All buyers and sellers must first register with Cancelon before engaging in transactions. Buyers may receive new room reservations via e-mail alerts if they sign up for them.

Another problem with Cancelon, however, is that its property offerings are sparse at this time. As I type this entry, there are currently 35 pre-paid non-refundable hotel room reservations from around the world posted on Cancelon — hardly much of a selection.

Still, Cancelon is an interesting idea which could be a potentially useful service once all questions are definitively answered and the concept has proven itself over time. For now, however, I would exercise caution if planning to use Cancelon — and some FlyerTalk members seem to be skeptical as well.

As for me, I do not intend to use this service. In fact, I rarely pre-pay for non-refundable hotel room reservations, as the price difference is usually negligible from refundable hotel room reservations, more often than not. Special offers, American Automobile Association membership and corporate accounts are some of the ways to secure a refundable hotel room reservation closer to the rate of a non-refundable room — and the money not spent to pre-pay for the room reservation can earn interest in the meantime until you pay your final bill at the hotel. Time value of money does play a role here — especially if you book your hotel room reservation months in advance.

Have you used Cancelon? If so, what did you think? Please report your experience here.

Leave Reply

You must be a logged in member to post a comment. Click here to Register.