Tuesday, July 18, 2017

POLL: Marriott’s cancellation policy driving away business travelers

Marriott International is now requiring that guests cancel their reservations a minimum of 48 hours prior to arrival or face a penalty equal to the cost of one room night. That change is not sitting well with business travelers, according to a poll conducted by the Business Travel Coalition.

While many large international hotel chains allow travelers to cancel their reservations up to the afternoon of anticipated arrival, Marriott International (NASDAQ:MAR) has instituted a much more restrictive cancellation policy for reservations made on or after June 15, 2017. It now requires a minimum of 48 hours’ notice – and sometimes more – for guests to cancel their reservations at hotels in the U.S. and Canada, Latin America and the Caribbean without penalty.

Rate details regarding cancellation
The screen shot at right shows the policy for a proposed reservation at the Seattle Marriott Waterfront for a stay beginning Aug. 19. In that case, the hotel is requiring three days’ notice to cancel without penalty.

While leisure travelers can and do change their plans, shifting priorities and business demands often make it necessary to rearrange or cancel meetings - and the associated travel - on much shorter notice.

A poll of 216 travel managers and travel management company executives in 12 countries predicts the change could have far-reaching consequences for Marriott in the short term, and may be a harbinger of a sea change across the industry.

I. POLL ANALYSIS

Some 59 percent 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 (NYSE:HLT), to win new business.

Thirty percent of respondents say they are considering a travel policy change that restricts travelers from booking Marriott properties while 68 percent indicate that they will seek to negotiate an exception for their travelers.

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. Regardless, 53 percent feel that other hotel companies will follow Marriott’s lead.

"Increasing competitive concentration in the hotel industry has no doubt aided Marriott in implementing this policy," the coalition said in its statement about the poll results. "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

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

Yes: 59 percent
No: 21 percent
Unsure: 20 percent

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

Yes: 30 percent
No: 41 percent
Unsure: 29 percent

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

Yes: 68 percent
No: 13 percent
No: 19 percent

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

Yes: 53 percent
No: 18 percent
Unsure: 29 percent

III. COMMENTS

Respondents to the poll were offered the opportunity to provide free-form comments. Many complained that the move was "Very business-unfriendly" and a "Bad deal for business 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.”

“I think it is unrealistic to hold business travelers to a 48-hour 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.”

“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.”

“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.”

Some said it would drive business to Marriott's competitors.

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

“Very disappointing. It will definitely make me look to IHG when I am not sure of my travels, or I will book late.”

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

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

“This is punitive for business travelers, whose plans are often out of their control.”

“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!”

Others expressed resignation.

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

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

“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.”

Some predicted the practice would spread.

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

“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?”

“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."

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

A minority of respondents were openly supportive of the change.

“I do not believe a 48-hour cancel policy is unreasonable,” said one, while another went even farther, opining that “All hotels worldwide should adopt this policy and apply full prepayment at moment of booking.”

Whether Marriott sticks with the policy, whether other chains adopt similar approaches, or whether it is abandoned in a short time all remain to be seen.

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.



Images by Carl Dombek
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1 comment:

  1. We saw an increase to 5 days within their SPG properties. Very disappointing and difficult to manage.

    ReplyDelete

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