How to avoid a hotel cancellation penalty

hotel cancellation penalty

If you’ve ever had to pay a hotel cancellation penalty, then Liam Goodman’s story will sound familiar.

When Goodman, a freelance photographer from Beacon, New York, tried to check into a hotel in Manhattan recently, it didn’t have any rooms available. He found another place to stay, but the first hotel charged him one night’s stay for being a “no show,” which made no sense.

“I talked to three different customer service people,” he says. “They all said the same thing: I was ineligible for a refund.”

The lodging industry loves cancellation penalties. Hotels collected an estimated $2.9 billion in fees in 2018, according to a recent NYU study. Cancellation fees represent some of the biggest recent gains. It noted the industry has also become stricter about cancellations in the recent past.

So how do you get around a hotel cancellation penalty? You have to choose your property carefully, make sure you’re covered in case of a cancellation and know a few insider strategies for canceling your hotel without getting dinged.

Book a room with reasonable cancellation fees

Goodman could have avoided his problem by booking a hotel with reasonable cancellation fees. Instead, he reserved and prepaid for his room through an online travel agency. The terms were strict: no changes, no cancellations. Period. When his hotel tagged him as a “no-show,” it kept his money.

Of course, Goodman wasn’t a “no-show.” I contacted the online agency on his behalf, and it promptly refunded the $170 it had collected.

Online travel agencies offer a lower rate in exchange for giving up your right to cancel the room. Use these online sites only if you are absolutely, positively sure you’ll be using the room.

“Travelers need to read the hotel policy carefully before booking,” advises Alyssa Heberlig, a travel agent with Just Always Traveling, a travel concierge service. “The cancellation fees vary in terms of how much the penalty will be and the time frame you need to cancel by.”

Don’t assume you’ll be able to cancel 24 hours before your arrival. Hotels have tightened their cancellation policies. In 2017, for example, Marriott changed its cancellation policy from 24 hours to 48 hours. Hilton adjusted its cancellation policy from 24 to 48 hours and, in some instances, 72 hours.

Hotels should disclose their cancellation policies clearly when you book, but you often have to scroll down or click on a small link to find the fine print. It’s clear that hotels and the online agencies selling these properties hope you’ll just overlook the cancellation terms, maybe assuming that you can cancel within 24 hours. But with some cancellation policies now demanding a week’s notice, it’s more important than ever to read the rules.

Get travel insurance if you don’t already have it

Travel insurance can protect you from a hotel cancellation penalty.

“Trip cancellation will cover any of a traveler’s insured trip costs if they have to cancel for a covered reason, including prepaid, nonrefundable hotel rooms,” says Stan Sandberg, co-founder of “If something listed in your travel insurance policy happens before your trip, and you have to cancel, you will get your money back.”

Note, though, that your reason has to be covered under your policy. You can’t just change your mind about traveling. (There’s a more expensive policy, called “cancel for any reason,” that will cover you. Ask your insurance agent for details.)

But you might already be covered, says Charlotte McGhee, the CEO of Whisked Away Surprise Travel in Charlotte, North Carolina. “Some credit card companies offer travel insurance as a benefit when you purchase your trip using their card,” she says. “Check there first.”

Use these strategies to avoid a hotel cancellation penalty

Fortunately, you can negotiate a cancellation fee away, says Michael McCall, a professor at Michigan State University’s School of Hospitality Business.

“Hotel management has the right to waive the fee as they see fit,” he says. “This can also build considerable customer goodwill as customers will feel some affinity to the customer representative who helped them out.”

How? One way is to show your value to the hotel. A loyalty card is the easiest way to do that, but you might also intend to return to the hotel for a future stay.

“It’s really important not to act like an entitled jerk,” says Zoe Chance, a Yale business school professor who teaches a class on influence and persuasion. “People want to help nice people, they don’t want to help jerks. And you’re asking them to go above and beyond their responsibilities, to treat you better than fairly. So if you’ve booked a nonrefundable room, you take responsibility – and ask for clemency.”

Hotels don’t just cave in when you ask nicely, say frequent travelers such as Richard Laermer, who runs a PR agency in New York. “You need to explain to people that you will be sure to make it up to them,” he says. So make sure there’s something in it for them, like a return visit or at least a shout-out on social media.

Ultimately, hotels crave the rich revenues that airlines have collected for cancellations. The only things standing between them and the billions are you and these strategies.

Even more strategies for avoiding a hotel cancellation fee

• Negotiate on the phone, not online. A phone call is more effective than arguing online, says Teal Nicholson, creative director of LLG Events, an event management and design firm in New York. “Explaining the situation to a hotel employee who is familiar with cancellation policies may ensure you get the proper refund for a cancellation,” she says.

• Get creative. When Karolina Klesta could not make it to Sicily because of a volcanic eruption, her hotel apartment insisted on charging her the full penalty. She begged for a refund and even sent the manager a photo of her exhausted 1-year-old daughter. It didn’t work. “Then I mentioned I’m a travel blogger and that if he agrees to cancel my reservation, I will tell everyone how awesome he is on all my social media channels,” she recalls. “His response was immediate. He agreed on the full refund.”

• Be flexible. Consider taking a credit instead of a refund, says Shylar Bredewold, founder of Odyssean Travel, an online travel agency. “Credit can be more appealing to the property because the hotel doesn’t lose your business and they aren’t stuck with additional costs or extraneous fees such as merchant services,” he says.

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Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can’t. He’s the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, and the Washington Post. If you have a consumer problem you can’t solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter.

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