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For Business, Corporate Travel & Meeting Buyers & Arrangers

Mystery buyer: hotel hurdles

Some hotels have introduced a new 48-hour cancellation policy

The introduction of 48-hour cancellation is not such a big deal, says our mystery buyer

As i write this, the hotel RFP ‘season’ is in full swing, and I’m wondering whether we’re in danger of over-reacting to the apparent trend towards 48-hour cancellation policies.

Hilton imposed its two-day policy, but only for North American hotels, back in the summer. Marriott followed suit soon after, again only for hotels in the Americas. Then Intercontinental jumped on the bandwagon although, as reported in BBT, there will be variations from region to region.

It’s probably only a matter of time before it becomes an industry standard worldwide, but for most corporates I think it’s just an irritation, not a catastrophe.

I read somewhere an HRS report that indicated that while 17 per cent of corporate hotel bookings are cancelled, only five per cent are scrapped within the 48-hour ‘window’. Certainly, major corporates with a high level of last-minute changes of plan will have cause to complain, but for those with more modest volumes it’s not such a big deal.

Of course, some late cancellations are unavoidable, but if travellers are made aware of the new regime and encouraged to firm up their travel arrangements three or more days out, that could go a long way to improving the situation.

More importantly, this is just another negotiating point. We travel buyers have become very adept at winning concessions from suppliers, whether it’s free car parking or complimentary breakfasts, and while no-one will welcome yet another thing to squabble over, that’s all it is.

There’s nothing to stop hotels from imposing even longer cancellation periods – surely our job is to talk them out of it. It might make the RFP ‘season’ even longer than it is already, but that’s a small price to pay if we end up with an acceptable deal.

The current regional variations are certainly a nuisance. There’s also the question of the different brands. Will the major hotel groups be able to enforce the same cancellation rules across their entire estates? After all, each brand – whether it’s a Holiday Inn or a Ramada, a Moxy or a Doubletree – is a profit centre in its own right. What works for a St Regis may not work for a Sheraton, and the brand managers will surely have something to say if the bottom line starts to suffer. Inevitably, there will have to be some sort of in-built flexibility.

If all else fails, look at smaller destination-specific hotel companies and independent properties. I’ve recently read that only 23 per cent of hotels in Europe are chain properties – so that’s a hell of a lot of inventory you’re missing out on if you ignore independents.

For multinational organisations with huge travel volumes, booking with independent chains is probably not a viable option, but if your company’s travel requirements cover just a few destinations, there’s plenty of choice out there… and scope for savings, too: according to some research, independents can be up to 15 per cent cheaper than their chain equivalents.

Yes, of course, the two-day cancellation period is a pain; an annoying addition to the already-long list of business trip elements that we have to negotiate – but negotiation is what we do. The major chains will publicly insist that these cancellation charges are written on tablets of stone, but that’s never likely to prove to be the case. For hotels whose success is even partially dependent on corporate travellers, surely flexibility is essential.

At the height of the hotel RFP season, extended cancellation charge periods are an irritant, but no more than that. In the corporate market, savvy travel buyers will easily clear the hurdle. Whether we needed another hurdle is a different matter.

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