Marriott and Hilton to Change Cancellation Policy

In a bold move that seems to be aimed at raising more revenue through fees, hotel mega-giants Hilton and Marriott are changing their cancellation policy to at least 24 hours in advance.

In a change that goes into effect on January 1, guests will no longer have until 6pm on the day of their reservation to cancel.  This policy will be a big adjustment for business travelers, whose plans often change at the last minute.

While the chains are quick to point out that each individual property has its own cancellation policy that should be consulted for every reservation (some will still maintain their 2- or 4-day policies), this blanket policy change is definitely setting a new tone that business is business.

Hilton has told the New York Times that the change came about in order to provide “a more consistent booking process and make more rooms available for…last-minute travel accommodations.”

With Marriott and Hilton making these changes, it could open the door for other chains to follow suit, racking up cancellation fees as a way to bring in more revenue.  But the question should be asked: will it backfire?  Will the chains lose those loyal business customers who enjoyed the freedom of being able to cancel at the last minute?

While that remains to be seen, what we can look at is the success of other fees charged for Internet access and resort fees.  Although begrudgingly, many guests have paid out these fees, helping to account for a nearly doubling in the amount of revenue raised by hotels from fees alone over the last five years ($2.25 billion in 2014 vs. $1.55 billion in 2009).

Perhaps the hotel industry is following the path being blazed by the airline industry, which charges for just about everything these days–from baggage, to extra leg space, snacks to pre-boarding.  You know it’s a system that works when perhaps the most passenger-friendly airline, JetBlue, just this week announced that it too will start charging for bags and will add more seats in planes.  For a company that has prided itself on all of the included extras, and therefore gained a cult-like clientele, this has come as quite a shock.  As long as they don’t take away our free cookies and chips, we’re fine with it for now.

Now that Hilton and Marriott have made these changes to last-minute cancellations, look out for other chains–the JetBlues of the hotel world–to take another look at their own policies.