Hotels Mull Eliminating Fees, Too

Hotel companies look long and hard at InterContinental's move

By: Jerry Chandler

InterContinental Hotels & Resorts’ decision to eliminate all meeting cancellation and attrition fees has raised expectations among travel agents and meeting planners, who expect that others will soon follow suit.

However, as this story went to press, no one else had emulated InterContinental’s move.

InterContinental’s policy applies to properties in the Americas North, South and Central. Book through April 30 and schedule the conclave through Dec. 31, 2003 and the fees are forgotten.

“We recognize the uncertainty many have in booking meetings and committing funds,” said Jeff Senior, the hotelier’s brand vice president for North America. The American Society of Travel Agents thinks the move is timely. “If the hotels want to avoid having empty rooms, as we get close to what appears to be an unavoidable conflict, they’re going to have to do something to encourage consumers,” said Paul Ruden, ASTA’s senior vice president for industry and legal affairs.

And one of the things they can do, he said, is reduce risk. Ruden believes InterContinental was “very smart” to ax the penalties. That way, meeting planners are “encouraged to go ahead and book now for future dates, dates where they have some concern.”

While ASTA has no indication that other hoteliers will do away with fees, prior to the actual start of a war, Ruden said, “These types of practices do tend to be copied.”

Maybe, but there’s certainly been no wholesale rush. At least not yet.

“We have not come out with any position on this matter,” said Jeanne Datz, director of brand communication for Hilton Hotels. She said Hilton will wait to make a decision “until something happens if it should happen.”

“Unfortunately, we have not yet reformulated cancellation policies at this point and time,” said Mark Ricci, a spokesman for Starwood Hotels and Resorts, the company which owns, among others, Sheraton and Westin. “I’m sure we’ll address it if and when it becomes an issue.”

“We’re reviewing our cancellation policies,” said Marriott spokesman, Roger Conner.

Unlike some observers, John Hawks, president of the Association of Retail Travel Agents, thinks that other hotel companies may not do away with cancellation and attrition fees at least not before the outbreak of war.

“Down the road, it’s going to be hard to re-institute fees,” he said. “Individual properties doing it is one thing, but when it becomes a companywide policy, it’s tough to take that back, once you’ve offered it.”

That doesn’t mean ARTA isn’t in favor of InterContinental’s initiative. “Some of the properties, like InterContinental, had almost gotten out of hand with some of the cancellation requirements and penalties,” said Hawks. “We see that in planning conferences for ARTA ... and we’re hearing it from our members as well.”

Kevin Mitchell, Business Travel Coalition president, said that InterContinental’s initiative has made travel agents and meeting planners more hopeful.

“The travel managers I work with are pleased by InterContinental’s move,” he said. “They’re expecting policies like this.”

He said hoteliers “need to do everything they can to encourage travel.” That means “removing any barriers that exist in the decision process” barriers such as cancellation and attrition fees.

Some individual hotels aren’t waiting for corporate policy to coalesce before moving to calm customers. They’re taking initiative on their own.

Witness what’s happened in San Diego. For business that hadn’t already been contracted, for meetings about to be booked, a number of San Diego area hotels are cutting clients some slack. The San Diego Convention and Visitors Bureau is promoting an effort that will run through June, called “The Hassle-Free Meeting Guarantee.” A key component of that guarantee states that 18 area hotels including the San Diego Marriott Hotel and the Sheraton San Diego Hotel and Marina will employ “flexible contracting conditions,” said John Reyes, the CVB’s vice president of sales.

That doesn’t mean these hotels will necessarily do away with the fees altogether, but it could mean they’ll reduce them on a case-by-case basis.

It’s a matter of flexibility, said Reyes. “And the hotels will define what that flexibility is,” he said. What’s important is that “they will look at attrition and cancellation differently than during normal times.”

And these are anything but normal times. BTC’s Mitchell believes that in contrast to the first Gulf War, the coming conflict if it happens could depress business traffic for some time. At the very least, through the end of 2003, he added.

ASTA’s Ruden begs to disagree. “I think we might be surprised at how brief the war turns out to be,” he said. “I think there’s a huge amount of pent-up demand that has piled up behind all these government warnings... People, at some point, are going to want to start traveling again.”

Until they do, initiatives such as InterContinental’s can’t hurt.