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Should you avoid Hilton and Marriott from 2015?

Hilton and Marriott will copy airlines from January 1, 2015 by implementing a more aggressive cancelation policy.

From that date you can cancel for no charge until 11:59 pm local time the day before check-in. Currently, you can usually cancel for free until 6:00 pm on the day of arrival.

Marriott did not publicly announce their policy change. In contrast, Hilton informed the travel community through an announcement on FlyerTalk, claiming they make the change “so that we can provide you with a more consistent booking process and make more rooms available for when you need last minute travel accommodations.”

This is rubbish, of course, as an accompanying change is that “you will be required to provide a credit card at the time of booking.”

This strongly suggests it is all about raising revenues. First, because it would be hard to collect a cancelation fee if guests do not provide a credit card. Second, they can more aggressively oversell rooms.

As usual in the travel industry, they try to sell something that is negative for consumers as something positive. Nonetheless, you may want to consider avoiding Hilton and Marriott from January 1, 2015 and stay in other hotels.

Carriers have decreased competition in the industry by mergers. If the extent of competition is weak, prices and profits will rise. That is exactly what has happened in the airline industry.

The hotel industry is getting in a position similar to the airline industry because demand grew 4 times more than supply since 2009.

Thus, in both industries suppliers saw their market power increase. If travelers will not punish Hilton and Marriott by choosing other hotels they will have to pay more cancelation charges and ultimately higher rates, while hotels will see their profits soar just like airlines did.

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