November 24, 2017

New hotel cancellation policies lead to flexible pricing


Hilton is pleased with the results of the new policies, with the volume of short-term cancellations down significantly. And now, the company is testing a new pricing plan that will reward guests who book early.

“We’re taking it from 48 or 72 hours (cancellation windows) to seven days, and then seven days and beyond, with a flexible or semi-flexible pricing approach,” Nassetta said. “It’s going to help us deal with this issue (of short-term cancellations) in a more meaningful way and a way that drives higher RevPAR growth.”

Executives from hotel ownership groups expressed support for the chains’ efforts at tightening cancellation clauses. Thomas Baltimore, president and CEO of Park Hotels & Resorts, said the impact has been felt the most at the company’s New York City properties.

“If you just take New York, probably 30% of reservations were being canceled in that zero- to seven-day window, and all of that had a rate impact,” he said. “If they want flexibility, customers ought to be prepared to pay for it. There are some situations where an advance deposit or advance purchase makes sense. The airlines retrained all of us, so there’s no reason the hotel industry can’t do the same.”

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