A new hotel scheme for gouging the customer

Industry insider is frustrated over bogus, new cancellation policy
By Amy Bradley-Hole
Travel columnist
Tripso.com
updated 3:42 p.m. ET, Wed., Jan. 16, 2008
I'm interrupting my previously scheduled column to tell you about a hotel policy that really makes me mad. I don't know how long hotels have been doing this or who thought it up, but I think it's fairly new and probably the work of some greedy corporate vice president.

A few weeks ago, my friend Mary Ann made a reservation through the Holiday Inn Express Web site for a room at the Holiday Inn Express in her hometown. She was having some company and was afraid she might not have room for everyone at her house. After one of her visitors canceled his trip, she knew she could accommodate all the guests, so she called the hotel to cancel the reservation. Too bad, she was told. You booked a special rate online, and you can't cancel or change your reservation. Never mind that you called well in advance of the arrival date. You're going to be charged room and tax for all six nights of your reservation, to the tune of about $750.

After letting a few choice expletives fly, Mary Ann called me to see if anything could be done about the situation. At first, I didn't have much sympathy for her. I knew that despite her protestations to the contrary, there were probably several warnings about the cancellation policy on the Web site. And I was right. I checked the site, and there are notices about the policy, and they're fairly obvious, though they are full of industry jargon. Still, fail to read the fine print, and you have only yourself to blame!

I discouraged Mary Ann from disputing the charge through her credit card company, because she was clearly in the wrong. Instead, I suggested that she speak to the hotel's manager in person, admitting her mistake and begging for mercy. Maybe he would agree to some sort of compromise, perhaps charging her for only one night. Alternatively, I suggested she go ahead and check into the room even though she wouldn't be using it. At least that way, the hotel couldn't resell the room and make a double profit and she'd gain some small satisfaction from "sticking it to the man." Otherwise, I was afraid she was out of luck.

But the more I thought about it, the more I sympathized with Mary Ann. Anyone could have made her mistake and, besides, the policy is simply outrageous.

The first time I noticed a "no cancellation" policy like this was back in April, when I was booking a room online at a Doubletree hotel. I was cruising through the booking on Doubletree's Web site when I noticed this:

FULL PAYMENT REQUIRED AT TIME OF RESERVATION. CREDIT CARD REQUIRED AT TIME OF BOOKING AND WILL BE CHARGED IMMEDIATELY FOR THE FULL AMOUNT OF THE STAY AS RESERVED. NO REFUNDS OR CREDITS FOR EARLY DEPARTURE, CANCELLATION OR NO SHOW. NO MODIFICATION ALLOWED ONCE RESERVATION IS CONFIRMED. GUEST MUST CHECK IN ON ARRIVAL DATE OR RESERVATION WILL BE CANCELED AND FULL PAYMENT FORFEITED.

They were going to charge everything upfront — no problem, this policy has been around for a while, and I can deal with it. No refunds or credits for early departure — again, this is a pretty standard policy, though many hotel managers will waive it under certain circumstances. But no refund for a cancellation? Hold up!

In the event of a cancellation, most hotels charge only for the first night's room plus tax — and only when the reservation is canceled on late notice. Faced with the Doubletree policy, I figured: Well, if I needed to cancel and didn't want to lose my money, I could just change my reservation dates to another time, or let a friend check in, right? Nope, this ironclad contract did not allow me to modify the reservation in any way. I went ahead and booked the room, however, because I had to be in that town for an appointment that had been planned for ages and could not be rescheduled, and I had to be there even if I was at death's door. And guess what? At the last minute, something almost forced a cancellation, and I almost lost my money.


When I nearly got stung by this policy, it irked me a little, but I didn't give it much thought. When Mary Ann got burned to the tune of hundreds of dollars, I gave it some more thought. I think this policy stinks, and here's why:

I've booked hotel rooms online for ages, and I've only noticed this policy in the past year, so I think it's fairly new. If a company makes major changes to the way it does business, it had better let its customers know about the change as quickly and as clearly as possible. In my opinion, hotels need to post any no-cancellation policy in huge print in a prominent position on their reservations pages. The Doubletree site does a good job of this. The Holiday Inn Express site does highlight some of its cancellation policy with red font, but many people would need a magnifying glass to read that font. Holiday Inn Express even has the nerve to begin its "Rate Description" section with the phrase "Special Savings!" It should read "Buyer Beware!" And almost all of the hotels' rates policies that I checked use industry jargon that many people might not understand.
The no-cancellation policy is not applied across the board. As far as I can tell, it applies only to certain bookings on the hotels' Web sites. If Mary Ann had called the hotel directly or gone down there to book in person, she would not have been charged for her cancellation; similarly, when I called the toll-free reservations number for a hotel company that applies this policy to online bookings, the operator mentioned only the standard 48-hour cancellation policy. If hotels choose to penalize online bookers, fine. But they need to clearly state on their Web sites that booking in other ways will allow guests to cancel their reservations under certain conditions. Also, if you look closely online, you will often find rates that are only slightly higher that do allow guests to cancel. Again, this should be more clearly explained. I shouldn't have to hunt around for a link to get an explanation of the rate structures.
It's not necessary. Don't get me wrong — I think cancellation policies are valid. If a hotel is sold out one night, and it turns down guests because it's sold out, and then people don't call to cancel their reservations, the hotel has lost business. The hotel shouldn't have to lose the revenue of unsold rooms just because lazy people can't be bothered to pick up a phone and cancel a reservation. But in theory, the hotel should invoke the cancellation policy only when it can't resell the room. If a guest cancels a reservation weeks, or even days, before the arrival date, the hotel has plenty of time to resell. Even if a guest cancels late, he should be charged only for the first night since the hotel has time to sell the room for the remaining nights of the stay. Only in rare circumstances, such as during huge events, should hotels keep all the money for a canceled reservation.
So now when you book a room through a hotel's Web site, you've got to make sure that the cheap rates don't come with restrictions that you might not be able to accept. You've got read the fine print every time you book, because hotels are making secretive changes that they don't want you to know about.

Does any of this story sound familiar to you? Does it sound like booking an airline flight, by any chance? Yes, it seems that hotels have now decided to charge rates and make policies just like the airlines do. Well guess what, hotels? People hate airlines. If you want to emulate a business model, how about one that makes lots of money by providing a great service and a great product, not one that makes money by screwing people over. Next thing we know, hotel chains will make us commit to staying at their hotels exclusively for two years. If we decide to go somewhere else, they'll charge us a $200 "early termination fee."

But here's the worst part, in my opinion, fellow travelers: We have let the travel industry do this to us. Every time we go searching for the absolute rock-bottom rate, we will get what we pay for. Every time we forget to cancel a reservation and then swear to our credit-card company that we did cancel it and the hotel is lying, the hotels will find even more ways to protect themselves. Just as businesses must be responsible and ethical, so must consumers.

The next time you book online, please read the fine print, even if you have to go searching for it. Question everything, and then decide whether the risk of highly restricted hotel rates is worth the reward of saving a few bucks.

Amy Bradley-Hole has worked in the hotel industry for many years in many different positions and at all types of properties — from small luxury boutique hotels to large resorts, both in the United States and abroad. E-mail her or read more of her articles on Tripso.com.


URL: http://www.msnbc.msn.com/id/22686345/page/2/