Marriott International may have been the first hotel company
to enact a 48-hour cancellation policy across its organization, but Hilton CEO
Christopher Nassetta pushed the envelope on pricing strategies within the hotel
industry.
As happened in 2014 with 24-hour cancellation policies,
Marriott and Hilton moved nearly in unison for 48-hour cancellation windows
inside of which travelers would face penalties. Marriott took the lead in June
and Hilton followed in July. Hilton added muscle to its penalties by dictating
a 72-hour cancellation windows in some high-demand markets.
The policy changes sent corporate travel managers digging
through data to try to assess the impact such penalties would have on their
programs. However, Nassetta isn't content to leave the policy at 48 or even 72
hours, and he's been vocal about that fact.
During the company's most recent earnings call, he said
Hilton is testing "changes in how we price all our products, sort of
taking it from the 48- or 72-hours to seven days and then seven days and beyond
with a flexible or semi-flexible product pricing approach." If the tests
go well, Hilton plans to roll out more changes in 2018. Nassetta's stance is
consistent with his past remarks and with pricing strategies tested by Hilton
in 2016, including a $50 penalty for any canceled reservation at select
properties and flexible and semi-flexible pricing structures.
In a vacuum, Nassetta's
comments and Hilton's pricing experiments wouldn't be a problem; Hilton may be
a market leader, but it doesn't match the scale of Marriott. However, the
industry—Marriott included—has been paying attention and is poised to follow
Hilton's lead as its rate structures more and more closely resemble those of
the airline industry.