Features

In focus

27 Jun 2011 by Alex McWhirter

Alex McWhirter examines topical issues. This month: is it worth booking a non-refundable room?

Is it a false economy to book a non-refundable rate? The question must be asked now that such deals are proliferating among the global hotel chains. The big brands are not shy in promoting these offers, which provide 10-30 per cent discounts on regular rates when you pay upfront. Book online and invariably the first rate displayed on the screen will be a non-refundable deal.

That seems like good news – but think carefully. Is it wise to shell out hundreds of pounds on non-refundable rooms at a time when travel plans are so easily disrupted not just by industrial disputes but by bad weather, natural disasters and political unrest?

Airlines have coped with this problem by fine-tuning their booking systems so that such passengers, provided they cannot travel for reasons outside their control, can switch flights or obtain refunds. But the global hotel business is far more diverse. Their booking systems are not so advanced, and their policies on refunds and so on may not be as clear as they could be.

Our readers do book restrictive hotel offers to cut travel costs, and have told me that they have lost out when they are unable to travel. International travel can comprise so many factors that problems occurring a long distance away can have an impact.

Accommodation en route may not be needed if a trip is cancelled owing to bad weather here or political unrest elsewhere. A hotel in Cairo or Damascus might be prepared to refund your stay during the height of civil unrest should you unavoidably cancel or amend your trip, but would a hotel well away in another country grant a refund? I doubt it.

Despite the much-publicised problems in those two cities, non-refundable rates are actively promoted. An online check we made for a stay in early July booked three weeks ahead displayed a US$152 rate at the Semiramis Intercontinental in Cairo or US$172 at the JW Marriott Cairo. Sheraton wanted US$176 for a night at its Damascus property. Would you, the reader, book such a rate in either of these cities three weeks ahead?

“Really, it’s a case of caveat emptor,” says frequent traveller Andrew Solum. “The hotels reduce their rates in place of flexibility and the guests take a risk [that they will not have to make changes]. But when a situation outside the guest’s control means he or she cannot travel then I would hope a hotel would endear itself from a loyalty perspective.”

There can be other reasons why a trip does not proceed as planned. Reader Mohamed Basma could not return home as planned when Bmi cancelled its Beirut-London flight on April 25 in a dispute over flight operations involving the Lebanese Ministry of Transport. He wrote: “Bmi offered to rebook me on an April 24 flight, which was too early as I had prepaid my hotel stay and would not get a refund. The airline said it could also rebook me for April 26 but this meant I would have to pay an extra night’s accommodation. Bmi told me it had no responsibility under [passenger rights legislation] EU261/2004 [to cover the cost of the accommodation] because ‘the circumstances were unexpected and beyond our control’.” (Bmi later relented and settled Mohamed Basma’s hotel bill.)

When Business Traveller contacted three major hotel chains for comment on the above scenarios, the answers, taken together, were not totally clear. Tom Rowntree, vice-president of brand management for Intercontinental Hotels Group’s Europe, Middle East and Africa division, said: “Our policy is to put our guests first, especially when the reason for the cancellation is out of their hands. During last year’s ash cloud crisis, all of our hotels worldwide allowed full refunds for individual transient reservations. We waived penalties for guests whose travel plans had been disrupted during the height of the crisis.”

He added: “When the political unrest unfolded in Egypt earlier this year, all of our hotels in the country gave full refunds for individual bookings made directly with the hotel at the peak of the unrest. We also waived penalties for guests whose travel plans had been disrupted.”

Marriott said: “During the ash cloud crisis last year [the question was posed just before the 2011 disruption] we waived cancellation fees for individual guests holding existing reservations at all Marriott-branded and Ritz-Carlton hotels that had been affected by the disruption in travel. Guests with pre-paid reservations [generally non-refundable rates] or attending group events were asked to contact the hotel direct to discuss the options available to them.”

Starwood said: “We review each situation on a case-by-case basis. During the volcanic eruption last year, and again this year, we waived cancellation charges for guests who were unable to travel owing to the closure of their departure or arrival airport. Guests requiring extended stays as a result of airport closures were offered accommodation at the rate originally booked.” So bear this in mind.

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