Digging into What the New Hotel Cancellation Rules Will Cost Us


By Robert McGarvey


More analysis about the bottomline costs to travelers of the new 48 hour cancellation policies at Marriott, Starwood and Hilton hotels continues to emerge – and the outlook is not good for us.

I’ve been consistently opposed to the new rules and still believe that, generally, we can duck them without inconvenience.  

I also snicker at the hotelier claim that somehow we are to blame for the new rules – when the reality, plainly, is that hoteliers are jealous of the mammoth fee income pulled in by airlines and they want their share.  

Their problem is that they don’t have the consolidation that marks the airline business.  From Phoenix where I live I have maybe three or four convenient ways to fly commercial to New York.  I have literally hundreds of hotels to choose among once there.  And many of those hotels are active on Hotel Tonight which means I have choice even for last minute bookings.

I also have new choices on Airbnb et. al.  

Airlines, pretty clearly, don’t give a hoot what I think about them. Hotels, on the other hand, want their guests to like them and hoteliers also actively seek to create loyalties.  

Punitive cancellation policies are a fast way to alienate guests.  Duh.

HRS, a hotel booking service, has looked closely at how the new policies will impact their corporate customers. HRS is saying “companies will have to budget for additional charges totalling millions.”

HRS further noted: “For business travelers, flexibility is one of the most important criteria when booking a hotel, as business appointments change frequently.”  

HRS said that 17% – one in six — of hotel reservations are cancelled.  It added: “But short-term cancellations are less frequent. Five percent of bookings are canceled up to 48 hours before arrival.”

Even so, per HRS, “In many cases, the late cancellation charge equals one overnight stay. Factoring in these potential costs across actual cancellation patterns over the past year, the companies surveyed would incur two percent additional lodging cost.”

HRS pointed to hard data: “One proof of this is provided by a key HRS client with total hotel spend of more than $82 million USD. If all cancellations made by this company within 48 hours of arrival were subject to this charge, the budget impact would be $600,000 USD a year.”

What to do about it? HRS is advising companies that as they negotiate corporate rates for 2018, they need to put cancellation policies on the table.

Understand: the big hotel operators will blink if a large enough corporate booker insists on greater cancellation flexibility.

What about smaller companies and individuals?

We need a more clever approach.

HRS offers pointers: “As part of its hotel procurement service for corporate programs, HRS casts its eye over the overall market. This includes independent hotels as well as hotel chain organizations that may offer more flexible cancellation policies for business travelers. Free-of-charge cancellation up to 6 pm on the day of arrival is a ‘must’ for almost all companies – correspondingly, hotels stand to gain more corporate room nights if they offer guests this flexibility.”

Read that again: it is saying book only at hotels that allow cancellation without charge up to 6 p.m. of the day of arrival. And always read the fine print in any reservation. Usually that’s where onerous cancellation clauses hide.

Incidentally, Bjorn Hanson, a hotel industry guru at NYU, told Skift why company wide cancellation policies make no sense: “A single, national cancellation policy is unwise,” he said. “In New York City, where occupancy is going to be, on average, 86 percent, cancellation policies are more important than they are in markets that run relatively low occupancy, for example. To implement a uniform cancellation policy with those two extremes is unwise and might cause guests to feel like they’re being treated unfairly.”

Absolutely right.  

My guess:  if enough of us hold tough, I would be surprised if we don’t see a broad retreat from the 48 hour rule, at least in many markets.  But it’s up to us to continue to make our dissatisfaction known.  Book at properties with kinder, gentler cancellation rules and don’t be shy about making your choices known on Twitter and Facebook.

That’s how to help hoteliers get this right.


Are We To Blame for the 48 Hour Cancellation Policies?


By Robert McGarvey


Read the recent Skift story about the Marriott and Hilton 48 hour cancellation policies – which we are on record blasting – and a quote jumps out. Hilton CEO Christopher Nassetta put the blame for the policies squarely on our shoulders: “customers, many of them, ultimately have been trained to do multiple bookings and do things that have created a scenario where cancellations have, in some markets, skyrocketed. They’ve got, they’ve gone way up.”

Have you made multiple bookings on business trips?

On vacations, yes, sometimes we all do this – and maybe we also monitor price fluctuations and will cancel a rez to re-book at a lower price.

I don’t recall ever doing this on a business trip though.

I have asked frequent fliers in my circle if they are guilty as charged and to a person they say no, at least as regards business travel.

I am not disputing that what Nassetta said may be true in some holiday markets. I’d say it’s true because hoteliers have trained us to expect price fluctuations. You know the Trivago ad claim – that different sites show different prices for the same room – and probably, like me, you think it’s true. Probably like me again you don’t know why that should be but we have come to accept that there is the appearance of irrationality and arbitrariness in much hotel pricing.

The hoteliers have in fact trained us to shop around. In assigning blame for a spike in cancellations- assuming there is such – then hoteliers needs to look at themselves and their own erratic pricing policies.  Just watch the Trivago ad again. 

But, frankly, I am lazy when it comes to business travel. I will look for a good price on a room that works for me and falls within the client’s budget and when it’s booked, that chapter is closed. I don’t keep shopping.

So again I ask, do you often make multiple hotel bookings for business travel and why? I just don’t get it.

Look, I accept that many, many resorts have long cancellation clauses – a week isn’t uncommon, 72 hours may seem downright kind. And, yes, I think those policies are bad for guests, who typically get whacked with a penalty of a night or two when cancelling outside the permitted window. But I also know that, generally, resort reservations, once made, will be honored, certainly among the people I’ve asked. It’s hard enough to get agreement on a vacation date and once made, nobody wants to break it.

I know I have never paid a resort cancellation fee if only because I stick with my reservations.

Business travel is different. Often my travel involves a meeting with a very senior executive and stuff happens in their world. I have found them as a group to resist changing meetings for frivolous reasons but I also have had many meetings shifted at the last minute – same day of travel – because something big came up for my guy.

Sure, I’d bill the cancellation fee through, just as I bill airline change fees, but I don’t want to. I want hotels in particular to accept that occasionally I have to cancel late and they give me a pass because usually I honor my reservations.

Is that asking too much?

Apparently at Marriott and Hilton it is. Ditto Intercontinental, although it has imposed a 24 hour clock which is significantly more reasonable for business travelers.

Still, I say: book elsewhere or wait until the last minute and book the room you want (and always look for a discount because that last minute room would be empty without you).  

The numbers are on your side. Nationally, occupancy in 2016 came in at 65% and that means your chances of getting the room you want are good.  Sell outs are rare for most hotels.  Many never sell out, not even once a year.

There are plenty of rooms for last minute bookers.

I am looking at Hotel Tonight for rooms in San Francisco. JDV’s “The Marker” in Union Square is $189. The Petite Auberge on Nob Hill is $155. Hotel Zoe on Fisherman’s Wharf is $189. All same day bookings.

In Manhattan the Michelangelo is $179, Gild Hall is $179, the Tuscany in Murray Hill is $299. Same day bookings.

Hoteliers are playing a game of chicken with business travelers but the reality is that the math is against them. Know that and you know you can win this duel – especially when you understand this is all their own making.


Russian Hackers May Be Targeting Your Hotel and Your Data


By Robert McGarvey

The statement from security firm FireEye has to put a chill in you: “FireEye has moderate confidence that a campaign targeting the hospitality sector is attributed to Russian actor APT28. We believe this activity, which dates back to at least July 2017, was intended to target travelers to hotels throughout Europe and the Middle East.”

There’s no doubt that there has been a hacking campaign. The “moderate confidence” applies only to attribution to the Russian hackers.

FireEye continued: “FireEye has uncovered a malicious document sent in spear phishing emails to multiple companies in the hospitality industry, including hotels in at least seven European countries and one Middle Eastern country in early July. Successful execution of the macro within the malicious document results in the installation of APT28’s signature GAMEFISH malware.”

Then the news turned awful: “Once inside the network of a hospitality company, APT28 sought out machines that controlled both guest and internal Wi-Fi networks.”

WIRED Magazine fanned the anxieties: “APPROPRIATELY PARANOID TRAVELERS have always been wary of hotel Wi-Fi. Now they have a fresh justification of their worst wireless networking fears: A Russian espionage campaign has used those Wi-Fi networks to spy on high-value hotel guests, and recently started using a leaked NSA hacking tool to upgrade their attacks.”

This is not fretting about kiddie hackers. According to Reuters, “Several governments and security research firms have linked APT 28 to the GRU, Russia’s military intelligence directorate. ”

That’s significant. That means we all need to be just a bit worried. This is a slick, professional attack. Nobody denies that, even though some aren’t convinced Russians are the actors.

The attacks have been slick. That’s the issue.

Remember, the biggest worries involve hotels outside the US.

In the US, many of know to use hotel WiFi sparingly if at all.  Domestic hotels have been under assault by hackers for some years and good advice is just don’t use the WiFi for anything meaningful that involves a password. That means corporate email, banking, even frequent flier accounts.  

That’s because the odds are high that criminals are sniffing the data stream over any public WiFi network and are seeking to pull out usernames and passwords.

But here’s the kicker: ignoring public WiFi domestically is easy.  I just create a personal hotspot, either on my TMobile iPhone or Google Fi Pixel, and I am good to go – often at speeds that rival hotel WiFi anyway.  That communication over the cellular network is significantly more secure than a public WiFi network so my advice is use it.

Abroad our choices are more complicated.  That’s because data abroad either is very slow or it comes at a price or both.

Set up a hotspot for data in Paris and very likely you will pay.

But now that is emerging as the better solution.

AT&T offers a calculator to help guide how much data to buy.  

Personally I will keep it simple by using T-Mobile, which offers free data – at slower speeds – in some 140 countries.  

Google Project Fi – in 135 countries – costs $10 per gigabyte for whatever speed Google can deliver.  

You want to know how you will create your own hotspot before your next foreign trip.

That’s because you – not the hotel – apparently are the target of the hackers.

FireEye elaborated: “Cyber espionage activity against the hospitality industry is typically focused on collecting information on or from hotel guests of interest rather than on the hotel industry itself, though actors may also collect information on the hotel as a means of facilitating operations. Business and government personnel who are traveling, especially in a foreign country, often rely on systems to conduct business other than those at their home office, and may be unfamiliar with threats posed while abroad.”

What kinds of hotel are the Russian hackers targeting? Here’s Fire Eye’s info: “FireEye says that the hacked networks were those of moderately high-end hotels, the kind that attract presumably valuable targets. ‘These were not super expensive places, but also not the Holiday Inn,’ FireEye’s [Ben] Read says. “They’re the type of hotel a distinguished visitor would stay in when they’re on corporate travel or diplomatic business.”

Sound like the kind of place you’d stay in?

Definitely it is my profile.

Note: FireEye is adamant that using a VPN may not provide complete protection against the tools the Russian are deploying.  Definitely, use a VPN when traveling abroad – just don’t be certain it is protecting against sophisticated intercepts.

So create your own hotspot.  Right now, that looks to be safe, abroad just as it is domestically.


Are Too Small Airline Seats Illegal?


by Robert McGarvey

A judge now has the backs – and backsides – of coach class passengers. That’s because Judge Patricia Millett, sitting on the US Court of Appeals in the District of Columbia, has authored an opinion that slams the FAA for ignoring “basic physics” as it has allowed airlines to shrink seat sizes.

Millett, in the majority opinion, called it “the case of the incredible shrinking airline seat.”

The Circuit Court’s decision has gotten lots of press coverage – but the decision is more narrow than it might seem. There’s good news in it, for coach passengers, but it is not the revolution touted by many headline writers.

The root of the case is that, as you know, seats have in fact gotten smaller – while we as a people have gotten bigger.  Two in three adults in the US are overweight or obese. One is three are obese.  

According to FlyersRights.org, seats are an inch and a half smaller than they were 15 years ago. The space between you and the passenger behind you has also shrunk, to as small as 28”. 35” was the usual pitch some years ago.  

Enter a case filed by FlyersRights.org, et. al. vs the FAA.  The case focused on FlyersRights’ attempt to persuade the FAA “to promulgate rules governing size limitations for aircraft seats to ensure, among other things, that passengers can safely and quickly evacuate a plane in an emergency.”

In response, the FAA denied the link between seat size and passenger health and safety.

Here’s how Millett summed up the case: “To support that conclusion, the Administration pointed to (at best) off-point studies and undisclosed tests using unknown parameters. That type of vaporous record will not do—the Administrative Procedure Act requires reasoned decisionmaking grounded in actual evidence.”

Millett went on: “Flyers Rights expressed concern that the decrease in seat size, coupled with the increase in passenger size, imperiled passengers’ health and safety by slowing emergency egress and by causing deep vein thrombosis (a potentially fatal condition involving blood clots in the legs), as well as “soreness, stiffness, [and] other joint and muscle problems.”

Millett did not completely endorse the FlyersRights’ viewpoint. The opinion noted: “We agree with Flyers Rights that the Administration failed to provide a plausible evidentiary basis for concluding that decreased seat sizes combined with increased passenger sizes have no effect on emergency egress. But we disagree with Flyers Rights’ challenge to the Administration’s declination to regulate matters of physical comfort and routine health.”

She also noted: “The Administration’s rationale also blinks reality. As a matter of basic physics, at some point seat and passenger dimensions would become so squeezed as to impede the ability of passengers to extricate themselves from their seats and get over to an aisle. The question is not whether seat dimensions matter, but when.”

Millett added that some FAA research in fact corroborates the Flyers Rights viewpoint. “Indeed, an Administration study that addressed passenger size in a slightly different context actually corroborates Flyers Rights’ point. The study considered, among other things, the ability of wider passengers to pass through the emergency exit row and door. Importantly, this test found that increased passenger width had the greatest effect on exit speed of all the variables tested.”

Millett further noted: “The problems with the Administration’s position do not stop there. Even with respect to its unseen tests, the agency cannot say whether those tests accounted for increased passenger size, which is a critical component of the egress problem raised by Flyers Rights’ petition. When questioned at oral argument, counsel for the Administration was unaware whether such tests take into account larger passengers.”

Sort through the court’s thoughts and where the FAA dropped the ball was around the possible relationship between smaller seats and passenger safety.  

In places, Millett agreed with the FAA. For instance: “Specifically, with respect to the risk of deep vein thrombosis, the Administration cited evidence showing that it rarely occurs and, regardless, is not caused by seat size or spacing.”

Here too: “Flyers Rights also noted passenger problems with ‘soreness, stiffness, [and] other joint and muscle problems’ in its petition for rulemaking….Given that those conditions are commonplace, temporary, and non-life threatening discomforts, Flyers Rights’ petition failed to demonstrate that the Administration erred in declining to undertake immediate rulemaking.”

As for what the court ordered, here it is: “We grant Flyers Rights’ petition for review in part, and remand to the Administration for a properly reasoned disposition of the petition’s safety concerns about the adverse impact of decreased seat dimensions and increased passenger size on aircraft emergency egress.”

So the FAA is tasked with more research on the possible links between smaller seats and passenger safety.

Will we get bigger seats as an upshot?  More comfortable seats? That’s just not likely.  

But at least airlines – and the FAA – are on notice that seat dimensions can be considered by a court and, in the event there are health and safety impacts, the court is willing to order the FAA to exercise oversight.

Just don’t count on bigger, plusher seats in coach. That really isn’t a likely consequence of this order.