@irishguy28: more people may cancel, but I'm sure that can be used to generate a new stream of revenue. After all, by law reservations are binding. If you cancel, all you are supposed to get back is the amount LH saves because you are not traveling. I.e. fees and taxes, food etc. For hotels the courts have established some percentage values (10-20% for rates with breakfast, 30% with one additional meal, 60% with two meals). All LH has to do is to play along.

And seriously: most people don't buy an expensive fare because they want to cancel again. Most people buy an expensive fare because the low fares have sold out.

All in all a non-issue. Works perfectly with hotels, and hotel prices are not sky-high as some people here try to make them to be. Less so than in the US where non-refundable means non-refundable.

HTB.