Hilton tightens cancellation policy at managed hotels

The Hilton Americas Houston

Hotels have historically been lenient with regards to cancellation policies, but Hilton’s cancellation policy is about to get a lot more restrictive.

Currently, Hilton allows travelers to cancel their hotel stay up to 24 hours in advance without any repercussions. However, the company is recommending a new policy to its owners that would enforce a 48-hour advance notice on cancellations, with some locations requiring 72-hour advance notice.

The new policy is expected to go into effect by the end of July, with penalties remaining unchanged. Travelers who fail to submit a cancellation within 48 (or 72) hours will be charged for one night of the booking. This policy will be implemented at the hotels currently managed by Hilton, while Hilton franchises and properties run by other management companies will be able to determine their own cancellation policy.

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The reasoning behind the strategy is sound: Hilton wants to better manage its revenue and reduce the number of no-shows, leaving hotels with too many unfilled—but booked—rooms.

RELATED: Marriott ends its 24-hour cancellation policy

“We regularly review guest booking and cancellation patterns across our 5,000+ properties, and have seen cancellation rates rise the last few years,” Hilton spokesman Nigel Glennie said in a statement. “These insights have led to the proposed update, which will allow us to maximize the number of available rooms for guests seeking accommodation.”

While the change bodes well for Hilton’s booking consistency, hoteliers can expect some backlash from guests. In 2016, Hilton CEO Chris Nassetta said travelers “hated” the change to a 24-hour booking cancellation window, a change that occurred in 2014 as hotels took notes from the airline industry. However, the change will be a boon for guests traveling for events because it conceivably will free up rooms that other travelers don’t intend to use, perhaps leading to more overall bookings.

Hilton isn’t the first to strike out into the world of 72-hour cancellation policies, with Marriott International tightening its own cancellation window last month. At the time of that announcement, many hotels in Marriott’s portfolio were already operating with 48- or 72-hour cancellation policies, prompting little change operationally.