It’s common, especially for less expensive hotels, to allow you to cancel your room, partially or in whole, at some point before you travel. For more expensive hotels and international hotels, the cancellation policies tend to be less flexible but usually allow you to avoid a good portion of the total cost. Most travelers understand that a hotel room will have some cancellation policy and know that when they book a hotel room, they must use that room or cancel by a certain deadline.
When booking lots of rooms, cancellation policies tend to be much stricter. Unless you are doing substantial volume with a particular hotel, the cancellation policies won’t offer full cancellation and will have monetary penalties for missed deadlines and canceled rooms.
The reasons for this seem obvious: if a hotel has 200 rooms and my group is asking for 50 of those rooms, the hotel will stop attempting to sell those 50 rooms under the assumption that I have taken responsibility for them and assumed the risk of selling them. If I decide a month before my travel date that I’m not going to use those rooms, the hotel would have to re-sell those 50 rooms during a short window, likely not reselling all of them and losing the sales they could have had. With only 200 rooms in total, that could be as much as a 25% loss of revenue for that hotel over those dates. The cancellation policies help the hotel manage this risk and prevent this from happening.
Likewise, when I book a block of rooms for a client, I always have a contract in place that protects me in the same way. I will usually pass the cancellation policies through to the client (remember, my company makes mostly business-to-business sales). If the hotel allows me to cancel 60 days prior to my block’s start date for 50% of the total contract value, my contract to the client will have the same cancellation policy.
Attrition is also important here. With a block of rooms, a hotel will usually let you give back a percentage of rooms without penalty if you do so by a certain deadline. For example, if I have 20 rooms and am allowed 20% attrition 30 days prior, I can give back four rooms if I return them to the hotel in writing at least 30 days before the start of my trip. I would still be responsible for the remaining 16 rooms, but it allows for some wiggle room for the end client and a smaller number of rooms the hotel would have to re-sell.
What amazes me is how many people get upset with me when I tell them they won’t be able to cancel the rooms, and it isn’t even just people outside of the travel business. Sometimes I find travel partners who don’t understand that they’ll be at risk for these rooms. For some reason, people seem to have this idea that they can reserve a bunch of hotel rooms with no associated risk and that the hotel will just let them cancel however many rooms they want at any time.
If tour operators like my company and hotels allowed guests to cancel whenever they felt like it, they would lose millions every year to people thinking they can get all their friends to go for a vacation together, or they’ll have hundreds of people travel to their destination wedding, or they’ll sell a conference to all their colleagues. As it is, we all lose money this way due to bad deals, breached contracts, and flighty customers. It’s part of the risk of the business, but it’s something every entity does its best to prevent.
But it is a never-ending source of frustration. Yes, you will have to agree to pay for the rooms if you choose not to use them. Yes, we will bill you for those rooms if you cancel and don’t want to pay. And yes, sometimes we will take legal action if you refuse to fulfill your commitment. It’s not something we want to have to do, as it is expensive for us, but when thousands of dollars are on the line with every contract, it’s a necessary evil.
There’s really no moral here. I just wanted to rant about this frustration, as it is a daily battle with potential clients to understand and accept this fact of group travel. I’ll end on this note: if you are looking to get a block of rooms for whatever reason, listen to an expert when they tell you that it’s always better to have too few rooms than too many. Pay attention to your contractual agreements, including deadlines, cancellation policies, and attrition policies. Think long and hard about what you’re agreeing to and hold up your end of the deal. We’ll all thank you for it.
