Last updated: 01:03 PM ET, Mon February 29 2016

'Customers Hated It': Hilton Drops $50 Anytime Cancellation Fee

Hotel & Resort Patrick Clarke February 29, 2016

'Customers Hated It': Hilton Drops $50 Anytime Cancellation Fee

Photo courtesy of Hilton Worldwide

After several weeks of evaluation, Hilton Worldwide has revealed it will not move forward with its $50 anytime cancellation fee.

Hilton began trialing the new policy at select hotels in November 2015 to gauge customers' reactions. While HHonors members were exempt from the 60-day trial, other guests who canceled their reservation anytime after booking were charged a $50 fee.

Speaking during the company's recent earnings call, Hilton CEO Christopher Nassetta confirmed what many anticipated, pointing out that "customers hated it."

"We knew they would, but we did get some nuanced intelligence out of the experience."

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Despite the negative reaction, Nassetta promised Hilton will continue to work to "migrate behavior" in 2016. 

"...We have to migrate behavior from where it is to where we want it to be, and there are some really intelligent things that you'll see us start to do later this year to start to move customers down that journey of recognizing, yes, if you want total flexibility, there's a price for that and if you want a better price, then you're going to have less flexibility," Nassetta said.

On Jan. 1, 2015, Hilton began charging guests who failed to cancel prior to the day of check-in the equivalent to one night's room rate. Marriott International also introduced a similar policy. However those policies only ensure hotels will generate revenue from their reserved rooms if the guests waits until the very last minute to cancel.

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While Hilton's decision to go in a different direction from the anytime flat fee is welcome news for consumers, hotel companies like Hilton clearly aren't giving up in the search for last-minute cancellation deterrents considering the revenue at stake.

The emergence of booking engines has contributed to a rise in room cancellations of late, in turn causing hotels to miss out on more potential revenue than in the past.

Therefore, there's no shortage of motivation for Hilton and others to rethink their cancellation policies.