[Updated] Hilton Says New Booking Cancellation Fee Justified Because It’s “Lower Than Airline Fees”
Jennifer Billock January 14, 2016
Update 1/19/16: Here is an official statement from Hilton:
“At Hilton, we are always testing new initiatives and programs to see what works best for all of our guests and owners. This past November, we began testing a new cancellation policy at select hotels, given late cancellations have historically created challenges for both our guests and owners. At this time, we have collected the data we need from this test and have ended the trial to evaluate the results.”
Hilton is running a trial of a new fee: a $50 cancellation fee regardless of when you book and cancel.
And the nickel-and-diming continues. Travelers tired of extra fees and surcharges for flights can start to expect more at some hotels now. Hilton Worldwide is currently running a trial period of a brand new fee—a $50 cancellation fee, one that doesn’t care when you booked and when you canceled. Someone could theoretically book the wrong hotel on accident, cancel within ten minutes, and still get charged the fee. Of course, members of the loyalty program are exempt.
The trial is in place at 20 U.S. hotels, including the Hilton, Doubletree and Embassy Suites chains.
Customers are decidedly unhappy about this new development. An online poll held by site Elliott.org recently asked readers what they thought, and 94 percent of travelers voting disagreed about the fee.
Hilton executives, though, are fully on board with the charge. One told the New York Times that it was justifiable because it’s “lower than airline [cancellation] fees.” And on the company conference call with investors in October, CEO Chris Nassetta suggested the move was in response to deal-finding apps and websites that allow guests to cancel and rebook to get a better room, without consequence.
“People are trying to game all our systems,” Money reported Nassetta saying on the call.
The hotel chain already had a policy in place that if someone canceled the day of arrival, they would be charged for a full night’s stay.
[Photo: Hilton]
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keloutwest. I'm new to AA from United. All you do is click hold before you buy and you have 24-36 hours from when you book. IT holds the reservation AND doesn't charge your card. It's way better then the current system. The Cancellation policy would only apply to non-refundable rates right? If so, I don't think it's a huge deal.
Personally I think this fee will generate a lot of short term revenue from unsuspecting guests. And when those guests need to cancel and find out there's a $50 fee, they'll never stay at a Hilton ever again. And neither will their friends. Example: I found out the hard way that AA doesn't have a 24 hour cancelation rule for flights within 7 days - even though I tried to cancel within 2 hours of booking because my plans fell through. I'll be avoiding booking with AA for that reason, and so will all of the friends I told about this.
Sounds like Jeff Smisek from United became a consultant for Hilton!
HHeck NO! Sorry, Hitton, you are stupid & hope it costs you lots of travelers. Maybe you should join up w/ Spirit Airlines for an alliance?
Lauren, I hope you take the results found here in the comments to your management as well. I'll add my name as a frequent Hilton guest and HHonors Gold member. I'll also be moving all my stays from Hilton to Marriott and/or Starwood until we receive confirmation that this fee is not going to happen. I enjoy Hilton properties, but I also recognize when someone is trying to see if I'll let them rip me off just because they can. AAJetMan, you're not completely wrong, but the business models really are completely different. The difference in sunk & marginal costs alone completely blows away the theory that they could or should be treated the same. Someone just needs to explain that to the Hilton executives, who apparently want to be just like some of the least popular policy makers in the world (airline execs).