Don’t get your hopes up: Hotels likely won’t follow airlines in eliminating change fees
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Major U.S. airlines shocked the travel world this week when they announced that they would be permanently dropping change fees for most flights. While airlines have been waiving change fees due to the pandemic, no one expected this policy to last. After all, change fees are big money makers for travel companies. This begs the question: are hotels going to follow suit?
Like airlines, most major hotel chains have been offering flexible change and cancellation policies for new and existing bookings. Hotels even beat airlines to extending elite status. However, it’s unlikely that hotels will match airlines in permanently offering flexible bookings.
For more TPG news and deals delivered each morning to your inbox, sign up for our daily newsletter.
Airline and hotel change fees aren’t the same
First things first: airline and hotel change fees cannot be compared apples to apples. While the majority of flights you book are nonrefundable, many hotel reservations are fully-refundable, even pre-COVID. Most hotels offer nonrefundable room rates, but the discount you’d get for booking one is much smaller than when booking basic economy flights.
Even if you book a nonrefundable room, change fees are typically irrelevant. Unlike nonrefundable flights, these room reservations can’t be changed. In other words, you typically can’t pay a fee to adjust your trip. Your only option to change a nonrefundable reservation would be to cancel and forfeit the amount you paid.
Flexible reservations typically need to be canceled 24 to 72 hours prior to arrival. Otherwise, you’ll typically be subject to a change fee equivalent to one night’s stay. Flights, on the other hand, could be canceled right up until departure time.
Most hotel stays booked with points are refundable. However, certain properties – especially luxury ones — have stricter policies. For instance, as TPG reader Justin found out the hard way, the St. Regis Deer Valley Resort in Utah will only allow you to cancel your reservation penalty-free for 30 days before arrival. After that, you’ll have to pay a fee equal to 99% of your entire stay.
Hotel flexible reservation policies are ending
To boost traveler confidence, most major hotel chains have allowed new and existing reservations to be canceled at no charge for up to 24 hours before arrival. For a long time, the flexible cancellation policy for new reservations did not have an end date. However, in the past few days, most major chains have updated their policies to reflect that they’re only valid for bookings made through Sept. 30. That means that beginning next month, all new nonrefundable/pre-paid bookings will be subject to the usual terms and conditions.
At the time of writing, Hyatt is among the few chains to still offer flexible changes and cancellations at no charge for all future bookings. Hyatt’s flexible booking policy covers new reservations made July 1 “or beyond.”
A spokesperson for Hyatt told TPG, “We do not plan to end this flexible cancellation policy early at the end of September, and in fact, this policy will extend for reservations booked for arrivals through July 31, 2021.” “We also do not plan to eliminate non-refundable rates at this time,” the spokesperson added.
TPG reached out to Hilton, Marriott and IHG to ask if they are considering backtracking and extending their flexible booking policies beyond September. A Hilton spokesperson responded that they understand that travelers have needed greater booking flexibility. “We’re closely monitoring the situation and actively discussing how we continue to deliver the flexibility that our guests need beyond that date,” the spokesperson explained.
What I’d like to see hotels do
While hotels have ramped up cleaning procedures, there’s still a lot of uncertainty with booking travel right now and it will likely go away by Sept. 30. Hotels have been very generous for effectively making all room rates completely refundable for this long and I don’t expect them to continue to do so forever. After all, airlines will continue to restrict changes on basic economy tickets and nonrefundable rates are essentially hotels’ versions of basic economy. Also, unlike airlines, which can easily fill empty seats at the last minute, hotels often end up losing money from last-minute cancellations.
That said, airlines extended free changes for basic economy fares for new bookings made through the end of the year. Given the current situation and the constantly changing travel restrictions, hotels should do the same. Occupancy rates are still extremely low and customers need some security if they’re going to book future travel.
Beyond 2020, it’d be nice to see hotels allow nonrefundable reservations to be changed or canceled in exchange for a travel credit. This way, travelers would have greater flexibility and hotels won’t need to forfeit revenue.
I’d also love to see hotels get rid of resort fees, but that’s an entirely different discussion.
We’re living in unprecedented times. Although no one expected airlines to drop change fees for good, it’s unlikely that hotels will follow suit. As of now, beginning Oct. 1, regular rate rules will apply for new stays booked with most major chains, except for Hyatt. However, there are other steps hotels could take to give customers the confidence they need to book future trips.
Featured image by Getty Images.
Welcome to The Points Guy!
Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees