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New cancelation regulations with Marriott and Hilton. When will the rest of the industry follow?

New cancelation regulations with Marriott and Hilton. When will the rest of the industry follow?

Marriott asks (unfortunately currently only in the US and Canada), that guests need to have canceled at the latest 48 hours before arrival, if they want to avoid cancelation costs. (see article in TravelSkills). Hilton has announced, that they want to follow in Marriott’s footsteps. As expected, the Travel Manager announce great resistance, and even threaten with a boycott. See Travel News.

It is time to take the 6pm booking into the ‘museum for dying travel policies’!

And once the European hotel industry wont snore away in the summer slump, they should follow suit asap.

Hotels (and restaurants) are likely to be the only industries that will take their easily perishable goods out of the distribution for weeks, only to get them thrown back at their feet shortly before the guests’ expected arrival. Best even without reference to the host. And the evolving travel managers are all working for industries where a short-term contract cancelation leads to considerable costs for the customers. Try to cancel a life insurance policy. To repay a loan agreement at an early stage or to cancel the order of a car three months before its delivery (three months before delivery, no one has started production yet…).

Even small OTA are convinced, that they can dictate cancelation regulations…

When I recently explained to a hotel buyer of a young travel start up, that the cancelation requirements were decided by the hotel and not the OTA, he wrote me the following angry reply:
“We can and want to advocate for things that are comprehensible to our customers. It is just not possible to explain to a customer, that cancelation fees will apply 10 days before arrival, despite no efforts have been made, practically. We take over all the administrative efforts with the customer, the customer pays with us (credit card fees), all mailings, consultation, administration, and so on. The hotel has absolutely no efforts with bookings via channel manager. Of course, this is different, once the arrival date comes closer: Planning of the staff, buying of food, etc. Then we can ask for certain fees.”

My reply:

Dear Mr. S.:
The hotel has taken the room out of their sales offer weeks ago, and has possibly not registered several other sales opportunities, maybe even from the group and seminar segment, due to the guests’ reservations. The hotel has administratively worked on the booking, put the guests’ data in the system, paid the channel manager and other mediums. The hotel has also several costs in case of a cancelation, due to the fact that the booking needs to be removed, or, even worse, the room may have to be rented out for a worse price as a ‘walk in’. Moreover, the guest has signed a contract and could secure his justified cancelation reasons through a travel rate insurance. Besides that, we would also give you back part of the cancelation costs, as you had expenses, also.

It is about time, that the hotel industry focuses its unique service oriented hospitality on the guests who are actually on location, and not on the people who are responsible for extra expenses, who never arrive, and think, that a hotel contract is worthless!

 

The recommendation:

  • Enough with the 6pm bookings! No free cancelation deadlines, which ask for less than 24, or better, 48 hours.
  • Begin with cost calculation (at least), which a cancelation entails
  • Begin with clear, higher fees for flexible cancelation opportunities, up until 24 h or 48 h before arrival.
  • And: Dear hoteliers, always read the small print in mediator agreements. The terms and conditions should be written by you alone, and not a mediator without any volume guarantees!

 

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