The Wall Street Journal shares the experience of one individual, Cy Yavuzturk, who was charged $868 when he cancelled his three-day reservation for a hotel stay in Washington, D.C. He did not even receive the option to change his reservation to a later date. Apparently, this policy is not anything new. The article states that “hotel chains and independent hotels have been adding nonrefundable restrictions to their normal discounted rates for several years, industry executives say.” However, recently this trend has picked up some steam.
Expedia, Travelocity, and Orbitz are a few online travel sites that offer discounted hotel rooms in the form of special deals. When advertising these discounted rates, the nonrefundable stipulation is not mentioned. Another misleading part of the whole scheme is that “Expedia and Orbitz say on their websites that they don’t charge reservation cancellation or change fees. They don’t – it’s the hotels that impose the nonrefundable rules and collect the cash when someone does cancel.” Hotels argue and say that the only way they are able to offer discounted rooms is if they are pre-paid for and nonrefundable. There are some hotel chains that choose not to follow suit and do not charge a nonrefundable rate. They are most likely the same ones not offering discounts.
Some hotel chains should reconsider this cancellation policy, or it might not sit well with loyal customers. Airlines at least offer you the option to change your flight to a later date. Hotels should accommodate this request as well. In a follow up article to the original story, it was reported that in 2010 “U.S. airlines collected $2.3 billion in reservation change and cancellation penalties.” I wonder what 2011’s numbers will be for hotels.
Hotels and online travel sites are pretty much left saying caveat emptor. It’s up to us the customers to pick the rate we want and deal with the consequences. If we want to save 20% on a hotel room, we better not cancel. If we have even the slightest inkling that a change might be needed, we should reconsider and be willing to pay a higher rate with a 24-hour cancellation window. Mr. Yavuzturk thinks that “penalizing a traveler at full cost without the traveler having used any portion of a service is unreasonable.” I agree. Usually when a deal seems too good to be true is because it is. When taking advantage of a discount, be sure not to discount any of the fine print.