Travel industry deeply concerned over Marriott’s new cancellation policy

Business Travel Coalition conducted a 24-hour travel industry poll ending at the close of business on July 11, 2017 regarding Marriott’s new cancellation policy, which requires a one room-night penalty for cancellations within 48 hours of check in. The poll had 216 travel manager and travel management company executive respondents from 12 countries – US, Canada, UK, Ireland, Spain, Switzerland, UAE, Belgium, Bonaire, Serbia, Scotland and Germany.

I. POLL ANALYSIS

Some 59% of poll respondents indicated that business travelers will likely book away from Marriott properties, especially after they get burned by cancellation fees a couple of times as many travelers do not read the fine print on travel documents. Moreover, the policy change seems to some as a huge overreach and particularly burdensome for business travelers who have little to no control over when a customer or prospective customer cancels a meeting the day before. Taken together, there appears to be an opportunity for Marriott’s competitors, especially Hilton, to win new business.

30% of respondents say they are considering a travel policy change that restricts travelers from booking Marriott properties. 68% indicate that they will seek to negotiate an exception for their travelers and 53% feel that other hotel companies will follow Marriott’s lead. The most prevalent theme in the extensive comments provided by respondents is a sense of great disappointment in Marriott whom many thought understood the needs of business travelers and managed-travel programs. With weeknight room occupancies high in business markets, and with Marriott’s forecasting and booking capabilities enabling it to replace cancellations, many feel the new policy is merely a money grab.

Increasing competitive concentration in the hotel industry has no doubt aided Marriott in implementing this policy. The new policy demonstrates Marriott’s market power, which allows the hotel company to disregard its best customers’ needs and demands without competitive consequences; also a sign of a failing marketplace. What’s more, tacit coordination among fewer mega hotel company participants in the marketplace for corporate lodging services will increase the likelihood of Marriott’s move being adopted by its competitors.

II. POLL RESULTS

Will Marriott’s new policy cause business travelers to book away from its properties?

59% Yes
21% No
20% Unsure

Are you considering a travel policy change that restricts travelers from booking Marriott properties?

30% Yes
41% No
29% Unsure

Will you seek to negotiate an exception for your travelers in your next contract with Marriott?

68% Yes
13% No
19% Unsure

Do you expect other hotel companies to follow Marriott’s lead?

53% Yes
18% No
29% Unsure

III. COMMENTS

“While no one likes it….I believe they will have to live with it.”

“Other companies should see this as a competitive advantage. It will impact traveler behavior once they figure out the penalties.”

“If Hilton does not follow along it will give them an advantage.”

“In some cases of course, not all will waiver from the brand loyalty. Marriott and Hilton are the two top brands for business travelers in my experience. I’d like to know what Hilton thinks of this. Might be time for them to run a triple points promotion and steal some business.”

“Traveling for business is hard enough today. Marriott is now making it even more difficult. Our clients who always booked Marriott hotels are now looking for alternatives.”

“It will not cause our travelers to book away from Marriott properties, perhaps until they get burned a couple times and move their loyalty to Hilton.”

“Its going to cause a lot of lost nights for companies.”

“This doesn’t work for corporate customers, it’s an aggressive move. If customers have a relationship with Marriott, they should look to have a corporate identifier in every booking – regardless of rate type, so that the cancellation policy does not apply. I can understand this may be an approach appropriate to leisure travelers. In the corporate market place, this just isn’t viable, travel plans change and it would be expected that companies (rightfully so) heavily shift business to hotel suppliers that have more acceptable cancellation policies.”

“With Marriott merged now with Starwood this is a huge over reach and burden. A 24hr cancel policy would have been easier to stomach than 48hr. Will be advising business travelers going forward and seriously will be moving business away from the chain in many cases.”

“While I understand the desire/need to avoid having unsold rooms due to last-minute cancellations, this policy hits corporate travelers hard, and, in combination with non-refundable rates (this also appears with Marriott), and predatory airline practices for extra revenue, including baggage and seating fees, it makes the travel booking more difficult, and influences the agent to book away from vendors who use these restrictive policies. It also suppresses business travel in general and forces companies to control their spending by moving their travelers to other hotel companies. At the very least, you should have a higher-priced room option that has more flexible booking and cancellation policies so that corporate travelers can have a reasonable choice. I’m going through lots of extra effort these days trying to find hotel reservations with fewer penalties for my corporate clients.”

“Marriott is a renegade. They have tried new things in the past and when received negative feedback, they changed their vision.”

“We would definitely consider this policy when choosing where to book travel rooms for employees. The new policy seems onerous.”

“I think the new policy hurts business travel which as we all know can change last minute. Marriott is not even waiving the policy for Platinum Members. I will be researching alternatives.”

“At a time I thought Marriott was traveler friendly then this comes up. Very disappointing. It will definitely make me look to IHG when I am not sure of my travels, or I will book late.”

“Impossible for business travelers to stay within Marriott’s new policy. And, not quite sure why they’re implementing this. Other than to find another income stream!”

“Are they really looking at how many cannot possibly cancel 48 hours prior, because the business trip normally goes awry 24hrs prior, so do really they just want EXTRA money, because reselling the room has not been the problem because their computer can do that statistically!”

“We understand Marriott’s reason, but unfortunately, business travelers, like our clients, are not always in control of their schedule. Their customers change at the last minute.”

“I think it is unrealistic to hold business travelers to a 48-hr cancellation policy as plans change constantly and so this will be costly for businesses. I will expect our business with Marriott to decrease as travelers select hotels with more lenient policies.”

“Marriott is getting too big for their britches. There are plenty of other ‘friendlier’ options for our clients’ travel needs.”

“It is unfortunate they are doing this. I’m disappointed in Marriott.”

“Will avoid Marriott when possible.”

“This action is not in line with an industry that specializes in hospitality. It does not take into consideration that “life happens.” Marriott has grown and been successful thus far, so it does not make sense that this has been a serious issue. I see it as a money grab and a way to pad the bottom line. Very disappointed.”

“Like airlines, there should be rate options for fully refundable and more restricted rates.”

“This will drive travelers to other properties and will perpetuate the Marriott brand of being difficult to work with.”

“We have very small volume in enforced countries, but am worried that it comes to Europe.”

“I understand the new policy to some extent. However, it should not punish “loyal, faithful” clients. Marriott should try to find a relevant, more targeted solution.”

“The wrong time to institute such a policy given current political issues around the world.”

“This will open the flood gates, next we will have total pre-payment required.”

“All hotels worldwide should adopt this policy and apply full prepayment at moment of booking.”

“It’s always the embattled customer who ends up paying. It will be interesting to see if this goes the same way as the Lufthansa booking fee debacle!”

“Very business unfriendly.”

“Marriott/Sheraton was the last chain to have free Wifi – so I am not surprised.”

“We don’t do much corporate anymore, but this new policy creates dilemmas for corporate and leisure alike. We will look to other brands that allow more flexibility — Marriott has been trying to bypass travel agents for years — this is just all the more reason to look at other brands. What a shame for Marriott.”

“They are following the airlines’ motto of trying to get the business directly, not caring about the economic situations of the people and businesses they are affecting. Terrible.”

“I find Marriott to be very “anti-agent.” They offer clients who book direct free internet and other perks we are not allowed to offer in our booking. Also unless you take their exam-which is very long and detailed, they reduce your commission to 8%-why?”

“The cost of our travel program will increase significantly and the energy we will have to put into cancellations within 48 hours will be even more costly.”

“All negotiated Marriott hotels which are under contract configured all contracted hotels with a blanket 2 day cancel notice regardless of contract. Not very wise.”

“It’s like the airlines, once one brand takes a step like this, they all follow. Will there be enough push back to get something like this reversed?”

“Marriott is not the first to start this, nor will they be the last. Other vendors will follow suit.”

“This will affect our transient travel mostly, not the meeting side. We do most of our business with Marriott properties, so I don’t expect changes unless there is a significant impact. Would be interested in suggestions on ways to monitor the impact.”

“I would like to steer travelers to another brand, but the loyalty program hooks the traveler.”

“Bad deal for Business travelers.+

“Not a good idea as business travelers have very short notice of changes at times, so, they could not cancel 48 hours out!”

“Greed. It’s all based on greed. It may come back to haunt them.”

“I do not believe 48 cancel policy is unreasonable.”

“I think the real test will be to see what the response is from the business travel community and whether other hotels follow suit. I think this is punitive for business travelers, whose plans are often out of their control.”

“It’s a policy that Marriott is tightening up just for an additional revenue stream.”

“I would expect better of Marriott. Travelers need flexibility not tightened constraints when traveling.”

“48 hrs. cancellation allows time for canceled room to be re booked! Who’s the big winner here?”

“Marriott did not give its customers fair warning about this change. We found out the day that it went into effect.”

“Assuming it sticks, hotels, like airlines, tend to follow each other when it comes to new sources of revenue, which is what this is. I expect others to follow. I understand the need for inventory management, but time will tell what kind of financial impact this has on us. We will certainly make decisions in our best interest based on the ultimate impact of this new policy.”

“It’s a monkey see, monkey do kind of industry so others will follow unless there is great push back.”

“As a managed program, we obviously do not like this move at all. It seems hotels will go to any length to find new revenue streams at the expense of their corporate partners.”

“The hotel reservation policy, as well as already incurred costs (air, registration fees), are taken into consideration when deciding to cancel a trip. Also, due to tight budgets, our travelers sometimes will choose non-refundable hotel rates.”

“If Marriott gets away with this all other hotels will follow suit so we need to send a message and negotiate this out of our programs.”

“Marriott begins to flex its muscles after the SPG acquisition.”

“Too restrictive for business clients with many changes. They will book the less restrictive hotels.”

“I’ve reached out to our Marriott Account Rep and expressed concerns over this. Our travelers already try to avoid properties with more than a 24 hr cancellation requirement.”

“This is just a big pain for business travelers. If you have status, the hotel will normally let you off the hook. But you have to take the extra time to call, hope you don’t get a crabby front desk agent, etc. All Marriott did was piss off travel agents (again) and road warriors.”

“Business travelers will book away from Marriott as this is an onerous change.”