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Hilton To Charge More To Let You Cancel?

Remember last fall, when Hilton started testing a mandatory $50 fee for cancellations no matter how early they were made?

Yeah, well, the hotel company finally picked up on what was blindingly obvious to the rest of us: That kind of thing angers customers. Hilton ended that test. In fact, you could say it went down in flames.

Instead, the hotel is looking at copying the airlines (and countless hotels before it) and creating a new, tiered pricing system under which higher prices allow fee-free cancellations and lower rates do not.

The hotel company apparently needed to infuriate and alienate customers in order to arrive at a conclusion many properties reached long ago. 

A tiered system isn't much kinder from a consumer's standpoint. In many cases, the higher rate essentially means many customers pay the equivalent of a change fee even if they never change or cancel dates. It's a built-in fee that merely buys the right to cancel, and you don't get the price difference back if you never do.

But at least a tiered system would allow customers to decide for themselves how disadvantaged by Hilton's rules they'd like to be.

Hilton's CEO, Christopher Nassetta, thinks his customers need to be re-educated when it comes to wanting to be flexible. 

He said as much in a recent earnings call, “What we want to do is make sure that on behalf of ourselves and our owners that we're not tying up inventory unnecessarily without customers having to take any risk or have any cost, but we have to migrate a behavior from where it is to where we want it to be,” Nassetta said. “And I think there's some really intelligent things that I think you'll see us start to do later this year to start to move customers down that journey of recognizing, yeah, if you want total flexibility, there is a price for that.”