In February, a handful of DHL board members traveled to Miami, some from out of the country. Weeks in advance of the meeting, the CEO’s executive assistant had reserved rooms at the Hilton Garden Inn Miami Airport West, a preferred property in DHL’s travel program, and used the CEO’s corporate card to guarantee the booking.
With the travelers set to arrive on a Friday, the shipping and logistics company’s travel management company called the hotel on Thursday to confirm the reservations and to notify the hotel staff that the travelers were VIPs.
Everything appeared set.
Until the board members arrived to discover some of their reservations had been canceled earlier that day. No more rooms were available, and the hotel offered little help finding alternative accommodations.
The DHL travel program members learned firsthand what happens when record-high hotel occupancy meets increasingly aggressive revenue management techniques, and they’re not alone. Buyers and revenue management experts said last-minute cancellations by hotels, while not widespread, have become more common as spare rooms have become scarce and no-shows threaten hotel revenue.
“We had one incident [in May] in D.C. where our traveler’s reservation was canceled by the hotel the day before arrival,” said Financial Industry Regulatory Authority corporate travel services manager Carol McDowell. “The traveler never received notice, but fortunately he checked their website beforehand and found it canceled.”
McDowell said the reservation was made at a longtime preferred property months in advance. The hotel offered no reason for the cancellation, but FINRA’s TMC was able to get the room, which had more than doubled in rate, reinstated for the traveler at the original price.
In DHL’s case, it turned out the CEO’s card used to guarantee the booking had been replaced. The hotel canceled the reservations after a test charge on the old card was declined. “He updated his travel profile [with the TMC], but it didn’t occur to him that he needed to redo all the hotel reservations he’d already made, too,” said DHL regional category manager of travel services Michelle Hunt. “It didn’t occur to anybody because we’ve never come across this before.”
The property made no attempt to reach out to DHL or its TMC before it canceled the reservations. The board members sought alternative accommodations, but the Miami occupancy rate that month was 87.6 percent, according to STR, and one traveler had to drive more than 50 miles for a vacancy.
“It blew my mind that they were VIPs, that we called and spoke to the front desk the day before and told them, ‘VIP. Do not walk. Do not displace,’ ” Hunt said. “The hotel acknowledges that they were all marked VIP, but when they go to run the credit card, they don’t look at those notations. They just ran the credit card, found out it was declined and then canceled the reservation.”
Though hotels have long reserved the right to validate cards that are holding reservations, multiple travel managers told BTN they recently have noticed an increase in the number of hotels clearing cards before arrival.
“It does not surprise me at all that hotels are taking this stand,” said The Linde Group corporate travel manager PJ Scala. “Let’s face it: They are holding a lot of cards right now. … They want to cancel at the last minute when there is a problem, but [they] charge a penalty when a traveler cancels at the last minute. While capacity is on the supply side, we are all going to be dealing with new sets of rules.”
Read full article at: Business Travel News
