Hilton Concludes $50 Cancellation Fee Trial
Hilton Worldwide recently completed a 60-day trial at two dozen of its hotels that charged guests a flat rate of $50 for a canceled reservation any time after booking and up until the day before check-in, after which guests would be charged one night's room rate.
Hilton Honors loyalty program members were exempt from the trial, the New York Times reported.
Now the company is evaluating the results of the trial to determine whether the fee affected cancellation rates at the participating Hilton properties. Depending on the results, Hilton could roll out the new $50 anytime (excluding the day of check-in at which guests are on the hook for one night's room rate) cancellation fee across its brands sometime in the near future.
The two-month-long trial was launched in mid-November, roughly one year after Hilton revealed a new cancellation policy that took effect on Jan. 1, 2015 and resulted in guests who failed to cancel their reservation the day before their stay being charged the equivalent to one night's room rate.
"We're making this change so we can provide you with a more consistent booking process and make more rooms available for when you need last-minute travel accommodations," Hilton said in a statement in November 2014.
Marriott International rolled out the same policy as Hilton on Jan. 1, 2015.
As more booking platforms have emerged, room cancellations have been on the rise in recent years, the Times points out. As a result of the growing number of cancellations, many hotel companies have missed out on potential revenue.
For Hilton, the hope is that the $50 fee will deter cancellations. And if a cancellation is made that prevents a room from being available to another guest, the company will at least come away with something.
While rolling out the fee across the board would likely be met with some disappointment and frustration from travelers, Hilton executive vice president Chris Silcock told the Times that the trialed cancellation fee was still "lower than airline fees."
Nonetheless the current trend is a bit concerning for guests. According to a study conducted by Tisch Center for Hospitality and Tourism at New York University professor Bjorn Hanson cited by the Times, the level of fees and surcharges collected by hotels in 2015 was expected to reach a record $2.47 billion, up approximately $120 million from 2014.
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