If you get the feeling that hotels and car-rental companies are tightening their rules, it is not an attack of paranoia. Like the airlines with their non-refundable tickets, these companies are fighting no-shows. Show up or pay up is increasingly their attitude.
In the hotel world, better business is fueling the trend. The accounting firm Coopers & Lybrand reported in May that occupancy rates in the United States in 1994 were the highest in 10 years, at 65.1 percent. The American Hotel and Motel Association has projected 67 or 67.5 percent occupancy for 1995.
Such figures embolden hotels. Bjorn Hanson, Coopers & Lybrand’s chairman for the hospitality industry, said that the upturn, with its potential for 100 percent occupancy 30 to 35 nights a year, were leading hotels toward “aggressive experiments” with handling no-shows. Hotels want reservations guaranteed with a credit card, so that a charge can be put through if the guest fails to show up; one hotel chain is testing penalties for those who check out early. Some hotels now require guests to cancel before 6 p.m. to avoid a charge.
Among car-rental companies, where customers often make multiple reservations to be sure of getting a car, choices are beginning to appear: One option is a tighter reservation with a guaranteed vehicle and a penalty clause.
In hotels, there are several trends. The most prominent is the tightening of cancellation policies when the traveler or agent has made a “guaranteed” reservation using a credit card number. These reservations have long been less restricted than resort or convention reservations, which require advance payment for several nights and impose a strict deadline for canceling with a refund. Individual reservations, especially at big-city hotels, have typically allowed people to give a credit card number to guarantee a reservation, with no-penalty cancellations up to 6 p.m. on arrival day.
The hour is now creeping up, mainly in convention cities. For several years, according to Carrie Reckert, a Hyatt spokeswoman, the deadline has been 4 p.m. at some of the Hyatts in Washington, Chicago and San Francisco. On Jan. 1, the Wyndham Franklin Plaza in Philadelphia began to require cancellation 24 hours in advance.
Jeanine Laphouse, corporate reservations agent for American Express, said the Jefferson Hotel in Washington had a 3 p.m. cancellation policy and in Atlanta the Ritz-Carlton Buckhead and the Ritz-Carlton Downtown had a noon policy.
Much of this is experimental. On Jan. 1, the Washington Hilton and Towers began to require cancellation 72 hours in advance. But, according to Bill Edwards Jr., general manager, the hotel heard negative responses. In April it returned to a 6 p.m. cancellation hour for most guests.
Inter-Continental took a little step: Effective Jan. 1, 1996, no hotel in the chain will be obliged to accept a reservation without a credit card guarantee. Right now, Dale Dugan, head of the company’s North American marketing committee, says only 5 percent of the chain’s guests make a non-guaranteed reservation.
Early cancellation deadlines conflict with procedures for reservations guaranteed on Visa, American Express, Diners Club or Mastercard. In return for holding the room for late arrival, these companies say the hotels must allow cancellations up to 6 p.m.
At American Express, Elizabeth S. Cohen, vice president of establishment services, and Penelope Wood, director of establishment services, said the company was researching how to allow hotels more flexibility.
Steve Apesos of Mastercard said his company’s policy was being changed. “It’s a big issue,” he said, and will involve disputes over card charges unless resolved.
At Visa, according to spokeswoman Sandra J. Stairs, a hotel is allowed to enforce a cancellation deadline earlier than 6 p.m. if it notifies the customer in writing at the time of the reservation. She said that there had not been many cardholder complaints about this.
Another move toward tightening reservations at hotels is a penalty for early checkout. Hyatt is testing this one at a few hotels with high occupancy rates. At the Hyatt Regency Chicago and the Hyatt Regency O’Hare, a guest is charged $25 for leaving before the date given at registration; at the Grand Hyatt in Washington, the penalty is $50. This policy began in January, and Reckert said it was not meeting “a lot of resistance.”
A penalty for early departure, Dugan of Inter-Continental said, was a difficult question. “We’re not ready to tackle that one,” he said, “making someone pay for something they don’t use. I would be offended.” He acknowledged, however, that a no-show penalty also required payment for something not used.
No-show penalties also are starting to turn up in the car-rental tent. All companies interviewed for this article said they had for some time been asking for deposits or charging penalties for reservations for four-wheel drives, minivans, convertibles and the like. I was alerted to it in April when I reserved a four-wheel drive for a September vacation in a national park, and soon received a letter from the Avis licensee saying a deposit of $100 was required a month before my arrival. The cancellation deadline is 48 hours ahead.
Geoff Corbett, executive vice president of sales and marketing for National Car Rental, said his company was testing cancellation fees in the form of prepaid rentals. Starting April 7, National agencies in 22 Florida cities began offering 15 percent to 20 percent discounts for rentals of at least five days’ duration that are paid for at least 14 days in advance. In a cancellation up to midnight the day before, the company keeps $25 of the payment. If the renter cancels later, or simply does not show up, National keeps the whole amount.
Thrifty is also testing a penalty. The test began in March in Pittsburgh, Dulles and National Airports in Washington, Denver and Orlando, Fla. Since then, Thrifty has added Love Field in Dallas; Dallas-Ft. Worth; Palm Beach, Ft. Lauderdale, Key West and Tampa, Fla.; Chicago’s O’Hare and Midway Airports; Sacramento and Orange County in California; Oklahoma City and Tulsa, Okla.
With a regular reservation, according to spokeswoman Meloyde Blancett-Scott, a car is held for two hours after the reservation time. When a reservation is guaranteed with a credit card, the car is held for six hours and the quoted rate guaranteed for 24 hours if the client calls to delay the arrival time. Cancellation is possible up to the arrival time. If the customer does not show up for the guaranteed reservation, the penalty is one day’s rental. Blancett-Scott said 20 percent of the customers in the test markets chose the guaranteed reservation.
Avis, Hertz and Budget said they had no plan for similar programs.
