Hilton Hotels tests incentives to encourage earlier cancellations

Hilton Hotels is testing “incremental opportunities” arising from new cancellation and pricing policies.

The company is thinking about a range “from the 48-hour, 72-hour mark out to seven days,” Christopher J. Nassetta, chief executive officer, said during Hilton’s second-quarter earnings call.

Hilton is eyeing the creation of “fully flexible pricing structures and semi-flexible pricing structures,” he said, enabling its hotels to manage inventory more intelligently.

“What we find as we’re testing it is the large majority of our customers actually do know within those time frames whether they need to cancel or not,” Nasseta said.

“It’s just they haven’t had to do anything about it. So they haven’t. But if you can create the right incentive system where you give them an incentive to let you know earlier, it’s good for them because they ultimately probably can get a little bit better deal.”

It’s better for Hilton as well. “We can manage that close-in inventory more intelligently to make sure that we both price it right, but more importantly, we fill as much as we can and don’t leave rooms unoccupied.”

Nassetta said he has told owners that in select markets – about 10 or 20 around the country – “we’ll go to 72 hours where we think it’s appropriate.”

Hilton will take that step not just because of new technologies, but just because customers, many of them, ultimately have been trained to do multiple bookings,” he said.

In some markets, cancellations have “skyrocketed,” he said.

Marriott International, which got the 48-hour cancellation ball rolling about six weeks ago, said the response among customers has been “just fine.”

CEO Arne M. Sorenson told investment analysts that most customers understand that hotels must manage their last-minute inventory in order to avoid walking guests.

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Michele McDonald

About the Writer :: Michele McDonald

Michele McDonald is a senior editor at Tnooz. She has worked as a journalist covering the travel industry for more than two decades.

She is a former managing editor of Travel Weekly (US) and former editor-in-chief of Travel Distribution Report.

In 2002, she founded Travel Technology Update, a newsletter for distribution professionals. She remains editor and publisher of Travel Technology Update. She also contributes to Air Transport World.

 

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