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Hilton's New Mandatory $50 Cancellation Fee

The giant Hilton hotel brand is piloting a new way to make life miserable for travelers: It has started charging $50 for cancellations, no matter when they're made. 

Under the new rules, once customers have made a reservation, it will cost $50 to get out of it, even if the change is requested weeks before the date. 

Previously, most hotels allowed cancellations up until the posted deadline time of 24 to 48 hours before scheduled check-in. The new rules give only 24 hours—before that, the guest is charged $50 and after that, the guest is charged the price of a night's stay. 

The new harsh fee is currently being tested at 24 properties across the Hilton portfolio.

Why is Hilton doing this to us? Its CEO, Christopher Nassetta, gave this reason during an earnings call: “It’s not because we are seeing any short-term cancellation activities that’s outside of what we’ve been seeing. Obviously with all these new technologies and things over the last couple of years, there has been lots of different sort of ways people are trying to game all our systems with cancel and rebook."

So Hilton doesn't like when customers flow with the market and rebook hotel rooms at lower rates. It's hard to go after apps such as TripRebel and DreamCheaper directly, but it can penalize customers directly—which isn't a wise move from a brand loyalty perspective.

This paragraph from the New York Times article discussing the new fee should go a long way toward giving another reason why: "In a study released in August, Bjorn Hanson, a professor at the Tisch Center for Hospitality and Tourism at New York University, reported that a record level of fees and surcharges at hotels was anticipated in 2015, reaching $2.47 billion. That is up from $2.35 billion a year earlier."

The only way to get out of the fee is to be a part of the company's frequent guest program, Hilton Hhonors. Fortunately, doing that is free.

We say it's another reason to look first at the family-run hotels that don't impose greedy rules and allow the market to operate freely.