Ridiculous or not? Hotels eye airline-like rebooking fees

I‘m always on the lookout for new fees, so when Katherine Walton emailed me about her recent stay at the Chateau Timberline, a hotel in Packwood, Wash., she had my attention.

Walton needed to cancel her reservation a day before her arrival.

“An agent told me they would charge a $100 fee – the price of one night,” she says. “So even if they are able to rebook the room I will not get a refund.”

Cancellation penalties like that aren’t uncommon. I double-checked with the American Hotel & Lodging Association, and it confirmed that such fees are routinely charged.

“Many times, it is the first night’s room charge,” says Joe McInerney, the association’s president. “It depends when it is canceled.”

What set the Chateau Timberline apart, as far as I could tell, was that it didn’t disclose the fee to Walton, at least not until she needed to cancel. Also, its terms and conditions are a somewhat unusual. Read them for yourself.

Here’s the relevant language in its terms:

CANCELLATION POLICY & LATE PAYMENT: Should Guest fail to pay as agreed, or requests a cancellation, Manager may sell Guest’s dates to any third party.

If Manager is able to re-sell Guest’s dates at net rates of at least equal to those charged to Guest, Manager will refund Guest’s Use Fee less a Re-Booking fee as specified by Manager.

That’s a little vague, according to Walton. It also leaves the door open for other unspecified fees.

“This fee is not listed anywhere online other than saying it is ‘specified by manager’,” she says. “This seems excessive.”

I asked Chateau Timberline about Walton’s cancellation. It didn’t respond.

Here’s what I’m worried about: While it may be a standard practice to penalize guests who cancel their rooms by charging for one night’s lodging, the newer terms and conditions I’m seeing seem to lay the framework for the opportunity for new fees. In addition to charging a night, there’s a possibility of a “rebooking fee” that uses the airline model – and airline logic.

Airlines charge a $150 fee to rebook tickets. Does it cost $150 to change a ticket? No. Airlines say the fee covers the revenue opportunity they lost. Passengers say that’s a money grab.

When I read the Chateau Timberline’s terms, I see a little bit of that logic. They may not be charging $150 for the revenue opportunity, but they’re coming closer. (I could be reading into it; the fine print is confusing.)

Already, hotels charge non-refundable rates – and not always clearly disclosed – so can gratuitous rebooking fees be too far away?

I’d like to think not. I prefer to believe that Chateau Timberline’s terms simply veered a little from the industry standard, but that at the end of the day, it’s still a hotel at heart, not a wannabe airline.

But I’ve been observing this industry for too long to be absolutely convinced of that. I know that any competent hotel revenue manager would love to make every room totally nonrefundable, charge customers a rebooking fee to use what’s left of the credit, and perhaps a mandatory resort fee while they’re at it – and to get away with it.

All the more reason to be vigilant, to read the fine print and to know your rights the next time you reserve a hotel room.

(Photo: lumiere fl/Flickr)

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  • Linda Bator

    So when you DON’T SHOW UP, they should charge YOU 5-10 x the amount too???  Ridiculous answer.  The reason for the overbooking policy is because people historically DON’T show up — so they have to try and maximize the earnings potential per flight.  And they do get you out on the next available, and compensate for those delays over 4 hours.  Some people just want more and more. 

  • Linda Bator

    There is a vast difference between a large hotel, and a small private enclave such as this.  Once of 300 rooms doesn’t make too much of an impact.  But 1 of 10 for 7 days?   HUGE impact.  Especially when the resort is a seasonally-operating one, and only has a short amount of time in which to make its money.

  • Anonymous

    All depends.  I’ve gotten great rates with a fully-disclosed non-refundable rate.  Some stays can be cancelled 24-72 hours before 6 PM on the night of the stay.  Some can be cancelled the same day up to 3-6 PM.

    Now a place that has non-refundable up-front payment is unusual unless you’re dealing with opaque resellers like Priceline or Hotwire.

  • Anonymous

    All depends.  I’ve gotten great rates with a fully-disclosed non-refundable rate.  Some stays can be cancelled 24-72 hours before 6 PM on the night of the stay.  Some can be cancelled the same day up to 3-6 PM.

    Now a place that has non-refundable up-front payment is unusual unless you’re dealing with opaque resellers like Priceline or Hotwire.

  • acproductions

    The hotel has already recouped its “loss” by keeping the first-night charge.  There is no need for them to charge even more.  Life happens; sometimes it’s inevitable that you have to cancel.  I had a family emergency happen last Thanksgiving Friday, and was very grateful that not only did Starwood not charge me a cancellation fee plus the points I had redeemed, but REFUNDED the full amount of points.  They also helped me out at Mammoth when I had to cancel at the last minute, and did the same thing.  It helped it was a big weekend at Mammoth and they were able to rebook my room without delay, but they still went way beyond the call of “duty” to their guests.  And I agree that the two options – refundable vs. lower non-refundable works for many travelers.

  • acproductions

    The hotel has already recouped its “loss” by keeping the first-night charge.  There is no need for them to charge even more.  Life happens; sometimes it’s inevitable that you have to cancel.  I had a family emergency happen last Thanksgiving Friday, and was very grateful that not only did Starwood not charge me a cancellation fee plus the points I had redeemed, but REFUNDED the full amount of points.  They also helped me out at Mammoth when I had to cancel at the last minute, and did the same thing.  It helped it was a big weekend at Mammoth and they were able to rebook my room without delay, but they still went way beyond the call of “duty” to their guests.  And I agree that the two options – refundable vs. lower non-refundable works for many travelers.

  • Bodega

    Actually y_p_w, many hotel chains are going to advance purchase, nonrefundable room rates.  Holiday Inn, Holiday Inn Express and Hampton Inn are three I just dealt with yesterday and it was in my GDS and on their websites, too. 

  • Bodega

    They don’t keep the first night if they can rebook that room, so the fee covers them for their time and effort due to the cancellation.  I get it.   Again, if you don’t like a hotel policy, don’t book a room there.

    Starwood vs a smaller owned property is not a fair comparison.  They can recoup revenue from other places and other venues within their hotels.

  • Chris in NC

    Then charge a fair price, across the board. Throw away yield based fare management, and charge based on actual operating costs. Frankly, the business model of having extorting higher fares from corporate to subsidize the cost of travel is a non-sustainable business model. Why would hotels follow suit?

    Why should a OW flight from DCA cost 6X as much as a flight from BWI to the same destination? Am I the only one that thinks this pricing structure is ridiculous?

    Because when the economy rebounds, many businesses won’t suddenly resume using the outrageously priced, fully refundable, changeable fares.

  • Chris in NC

    In the last 2 years, an increasing number of Marriott hotels are offering non-refundable, non-changeable rates. You have only 24 hours after making the advanced reservation to request a change. After that, its a done deal.

  • Anonymous

    If I owned a hotel and imposed strict cancellation policies, yet people continued to stay at my property, why would I change?

    Simple solution. If you don’t like it, don’t book it.

  • Rachel G.

    I agree too. The question should be “why shouldn’t hotels charge this fee?”. Sure, customers don’t like it, but they also will complain if they feel that they paid too much.

  • Bodega

    I am not defending the way the airlines do their fares, but can’t you hear the cheapies who asked for bare bone fares (no meals, no luggage, no blanket, no onboard entertainment) complain when that $99 fare they are so use to becomes come $300-$700, if they were to go to one price across the board.
    @ac04600a3d95f388946bdffc801a4f59:disqus 
    As for the DCA flights, WN doesn’t fly there and they have brought down fares at IAD and BWI. 

  • Sfox

    How to make sure i’ll never stay at a place. Definitely something to keep an eye out for. I do book a non-refundable room for a twice a year business trip to New York, staying at the Washington Square Hotel. Their site makes it impossible (well, for most of us, I would think) to miss the distinction, which is to their credit.

  • Anonymous

    Yes – in fact that’s what I was getting at.  In addition to that I’ve seen different cancellation policies outside of non-refundable rates.  Sorry if I didn’t separate the two thoughts.

    Also – I think I wrote down an incomplete thought.  What I meant was that non-refundable up-front payments are typically very well disclosed, and it would be unusual for the terms to be hidden in fine-print. The opaque sites also disclose this.

    I’ve certainly booked a few non-refundable rates myself. It got a pretty good deal too.

  • Anonymous

    Yes – in fact that’s what I was getting at.  In addition to that I’ve seen different cancellation policies outside of non-refundable rates.  Sorry if I didn’t separate the two thoughts.

    Also – I think I wrote down an incomplete thought.  What I meant was that non-refundable up-front payments are typically very well disclosed, and it would be unusual for the terms to be hidden in fine-print. The opaque sites also disclose this.

    I’ve certainly booked a few non-refundable rates myself. It got a pretty good deal too.

  • Anonymous

    Yes – in fact that’s what I was getting at.  In addition to that I’ve seen different cancellation policies outside of non-refundable rates.  Sorry if I didn’t separate the two thoughts.

    Also – I think I wrote down an incomplete thought.  What I meant was that non-refundable up-front payments are typically very well disclosed, and it would be unusual for the terms to be hidden in fine-print. The opaque sites also disclose this.

    I’ve certainly booked a few non-refundable rates myself. It got a pretty good deal too.

  • Anonymous

    Yeah – I’ve gotten a good rate at a Hilton property.  I’ve also seen non-refundable rates at Holiday Inn locations.

    I rather screwed up the thought.  I’m very much aware of clearly disclosed non-refundable rates, but I was in a hurry to finish up and hit post.

  • Jim Zakany

    You mean the revenue accounting program?

  • Jim Zakany

    You mean the revenue accounting program?

  • Jim Zakany

    You mean the revenue accounting program?

  • Ruggerangel

     I love the hotels here. if i could have the chance to go again, ill stay forever.

    http://www.discoverluxury.com/

  • Brooklyn

    There’s a problem with all these new restrictions that are supposed to give us a better price if we agree to them: once the restrictions and fees are firmly established, the price goes up and the old price – which included all the things that we now have to pay for – becomes the new price with the additional fees tacked on. It happened with self-service gas stations, then airfares and now hotels. The solution is to regulate the travel industry, establish base services (the ones that they provided before all this madness started) and THEN let them compete on price.

  • Sasha

    I have a problem with “At the managers discretion” but I don’t think that a 24 hour cancellation policy is wrong I do think that a 3 day cancellation requirement is not unreasonable.  As a traveling public we have become so ‘ oh I think I’ll do that or Oh, I think I’d rather do this’ that reservations seem to be more of a just in case type of thing. Hotels do make plans based on who is going to be in their hotel so canceling on short notice does require some expense.

  • Dillonyork01

    Terms & Conditons State:
    Will not post photos, videos or reviews of, or comments about, the property to websites, publications, reporting agencies, or contact property owners without Manager’s written approval.

    WELL  I would post a review on Trip Advisor  with PICTURES AND on my Facebook page for sure.  FREEDOME OF SPEACH violation maybe?

  • Gretchen

    I disagree with “the Hotel takes virtually no risks accepting a reservation.”  Hotels forecast their need for staff based on reservations.  If people can make reservations and cancel last minute, the fluctuation in scheduling would be a nightmare.  Everyone from housekeepers, bell staff, front desk and restaurants.

  • Dfjkh

    Hotels can certainly charge rebooking fees is that is what they think will help their business – provided that they are disclosed properly (on every page during the booking process).  If they don’t, that calls for government regulation to compel them to do so.  I don’t think most hotels would go for it, because the revenue calculation of having an essentially non-refundable room versus and someone not booking it outright vs having a 24/48hr refund policy wouldn’t make sense.

  • Anonymous

    If 10 guests booked and then canceled their rooms, that could affect more than just those 10 rooms.  Maybe the hotel had to turn away a group of 50 because they only had 45 rooms remaining.  Once the 10 cancel, then the hotel has 55 rooms available but they’ve now lost the group business which costs them much more than just 10 rooms.

  • Beth

    Some of these comments explain why many hotels, like the airlines are coming up with these rebooking fees.

    Because many travelers now days, thanks to the internet, keep canceling at the last minute if they find a cheaper hotel or find a last minute deal or as one of your comments stated below they will book at the regular rate and then cancel that if a cheaper rate becomes available at the same hotel.

    The worst offense to me, is the traveler, who books the room, then checks back, sees a lower price offered, but NOT on the dates he booked and demands they give him the lower rate anyway, because he is Mr. BiG shot traveler and is a member of their hotel  club.

    Can you buy stock and then 3 months later the shares are cheaper and tell them you want your money back so you can buy it at a lower price

    It is driving the hotels nuts.
    If I cancel my spa appointments within a certain time, I get it charged to my charge card.

    When I cancel my doctors appointment within 24 hours, I pay a fee.

    When I canceled my dog’s vet appointment the evening before, I got a call from the office manager that if I did this again within the year, I would be charged the office visit fee.

    There are many fine restaurants in major cities, if you cancel within a certain time limit, you are paying a fee.

    Who knows if they rebooked other people, I am not getting my money back,

    The same Doctor who charges me for canceling an 11:00am,appointment the afternoon before, gets upset when he cancels his hotel the day before  and gets a fee.

    Why is the travel business supposed to be so different and not charge anything?

     

  • Kevkev

    If there is no cancellation fee or rebooking fee, there will be a lot of people will book airline ticket or hotel room without really have plan because they allow to cancel it due to whatever reason. This will be the same as department store, people buys a lot of stuffs because they can return it if they regret or don’t like it. Some will take advantage from this loophole. I agree with cancelation fee.

  • Kentlady

    If you read the terms and conditions at the hotel’s website, it also says this:
    “ADVANCE LODGING RESERVATION: The Booking is an ‘Advanced Lodging
    Reservation’ as governed by Visa/MasterCard Terms & Conditions.
    Barring problems beyond Manager’s control, the Property, or an equal or
    better substitute, will be provided to Guest on the dates indicated.
    Guest agrees the booking is non-cancelable and non-refundable unless, at
    Guest’s later written request, Manager is able to sell Guest’s dates
    according to the Cancellation Policy below.”

    So the guest should have already known it was non-cancelable and non-refundable.

  • Carver

    That brings up a good point.  Does it actually require human intervention to cancel a hotel room.  I seriously doubt it, but does any one know for sure?

  • Carver

    NO,

    I think Dsche is correct.  Most hotels of any size permit unlimited booking and cancellations up to 6pm the day of check in.  That strongly suggests that it’s not a nightmare.

    Part of the hotel’s forecasting is that people have the ability to book and cancel so this is taken into consideration when making said forecast.

  • Carver

    Unlikely as hotels reserve the right to overbook just for that very reason. More likely the hotel would book the 55, and walk 5 guests assuming that every single person who booked a room actually showed up, a highly unlikely scenario.

  • Carver

    Unlikely as hotels reserve the right to overbook just for that very reason. More likely the hotel would book the 55, and walk 5 guests assuming that every single person who booked a room actually showed up, a highly unlikely scenario.

  • Carver

    I’m confused.  Is this a tongue in cheek post, or something that you actually read somewhere?

  • Carver

    I’m confused.  Is this a tongue in cheek post, or something that you actually read somewhere?

  • Carver

    Agreed 100 percent. The hospitality industry uses very sophisticated software to project occupancy rates in advance.  Its called a dynamic revenue management system.  Part of its functionality is making a determination as to what percentrage of guests are likely to cancel. 

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    yeah, but in your example, you are out the same money whether the guest shows or not.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    That does’t really make sense. The two circumstances are not analagous.

    If I pay for a plane ticket and I dont’ show up, the airline has received what they wanted from me, i.e. the price of the ticket.  My showing up just means that the airline has a seat that they can double sell

    By contrast, if I am involuntarily bumped, due to the airlines fault, the airline, in trying to maximze revenue, has caused a huge financial detriment to me.  I will be late to my destination, I may have to incur additional costs in hotel, food, toiletries, etc.

    Its also reasonably likely that I will miss my connection, lose out of deposits, and the list continues.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    I agree with your position, except that hotels, unlike resorts, seem to be ina very competitive marketplace.  Same with car rental agencies.  That’s why hotels and car rental companies have far more generous policies that airlines.  Car rental companies generally have 100% cancellation allowance.

    Also, most hotels are not owned by the chain, but are merely franchised,  further diluting the power of corporate, as opposed to an airlines which is the only “owner”

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    Agreed.  Many of the posters, myself including, are assuming a large chain hotel with hundreds of rooms.

    And I am more willing to accept an restrictive cancellation policy when dealing with a small business that has to manage its inventory so carefully.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    In theory you would be right.  The adminstration would be a nightmare.  Suppose two guests cancel identical rooms and the hotel picks up on additional guest.  Should the hotel send eacha check for half.  Suppose they paid different rates?   I don’t know.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    Actually

    Hotels follow much the same model.  Consider, Thursday and Sunday nights in a business (i.e. non-vacationing) locale.  A Thursday night by itseld is considered weekday, but becomes weekend pricing when paired with a Friday and the prices drops considerably.  Likewise Sunday is a weekday unless paired with a Saturday stay in which it becomes a weekend stay and the price drops.

    Did the cost to the hotel change.  No.  But weekend travelers (again in non vacationing locales) are considered leisure travelers and hotels charge them less than business travelers.

    Same model.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    Except for the huge disparity between refundable and non-refundable tickets, I quite agree.  It make sense to provide different goods and services to different market segments.

    When I travel for business I have different needs then when I travel for work, and the pricing structures understand that.

    When I travel for business flexibility is much more important and I am willing to pay a premium.  On vacation, its not nearly as important and I’d rather save the money.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    And what about me who doesn’t need those so-called base services.  I want a discount.  Last year, I got rates as low as $29OW from SFO to LAX. 

    I much rather all services and fees be clearly disclosed so I can choose what I want rather than have someone tell me what I need.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    A little class warfare :)

    I’m on of the traveler’s with elite status and yes, I expect special treatment.   Why.  Because I regularly chose your hotel, even though the hotel next door was cheaper and more convenient. 

    For example,  I had a bankruptcy hearing in LA on Wednesday.  I stayed 3 blocks away although there was a  very comparable hotel next door to the hearing office.

    Accordingly, by me picking regularly picking your hotel, you give me certain concessions and perks. Its a tit for tat. Everyone is happy.

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