Hilton Worldwide is testing a new policy where customers will be charged a fee of $50.00 to cancel a reservation at approximately 20 of its hotel properties across the United States; and this fee will be charged at any time prior to the reservation once it is booked with one exception: if a cancellation occurs after 11:59 in the evening the night before the stay is scheduled to begin, then the current policy of a charge of the room rate and tax for one night will still be in effect for all guests.

The more restrictive global cancellation policy of Hilton Worldwide — where you must cancel a reservation as of 11:59 in the evening local time of the hotel property on the day before arrival as the latest time in order to avoid a penalty — became effective as of Thursday, January 1, 2015; and Marriott International, Incorporated and Starwood Hotels and Resorts Worldwide, Incorporated enacted similarly restrictive cancellation policies.

The former policy used to be generally that reservations must be canceled without penalty by 3:00 in the afternoon or 6:00 in the evening on the day of when the stay was scheduled to begin.

Why More Restrictive Cancellation Policies May Be Needed

Cancellation rates have been rising over the last several years and it is a problem which hotel and resort properties across the Hilton Worldwide portfolio of brands are facing, according to this article written by Alexandra E. Petri of Skift, which quoted Chris Silcock, who is the chief commercial officer of Hilton Worldwide. “With record occupancies, many rooms are being held, then not used, meaning other customers who want those rooms cannot book them. This is problematic for our customers because they do not always get access to rooms they want, because they are being held but are ultimately canceled.”

The purpose of the testing of this new restrictive policy — which is expected to last through sometime in 2016, but no specific date was announced — is to see whether or not it is successful in decreasing the amount of cancellations of reservations.

How You Can Easily Avoid Paying a Fee to Cancel a Reservation

If you happen to be staying at one of those hotel properties which is included in the test, you can easily avoid the cancellation fee of $50.00 simply by being a member of the Hilton HHonors frequent guest loyalty program; and it is free of charge to join as a member.

Summary

The most effective way of avoiding paying a fee to cancel a reservation at a hotel or resort property is obviously not booking the reservation in the first place if you are not sure you are going to stay there. Charging guests for stays in advance by lodging companies where no refunds are permitted greatly mitigates the possibility of cancellation by the customer; but those stays are usually sweetened with a discount off of the best room rate available as an incentive.

Regardless, there are legitimate reasons why reservations are booked in advance despite the guest not being completely certain of whether or not he or she will stay at the hotel or resort property…

…but if the test of this policy fails to reduce the amount of cancellations of reservations, what is next?

Photograph ©2009 by Brian Cohen.