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Corporate Travel Definitions:What is a hotel cancellation policy? and how can it affect your business travel spend?

Corporate Travel Definitions:What is a hotel cancellation policy? and how can it affect your business travel spend?

Many seasoned business travellers will be well aware as to what the term “Cancellation Policy” refers to, but for those who are not, a cancellation policy refers to the period of notice a hotel requires to cancel a particular booking.

Whether your business travel requirements are booked in-house by a travel manager, externally via a travel management company, or even by a mixture of the two, the cancellation and change rules related to the hotel booking will be advised at the time of booking. They will also be stated on your online booking tool when making a hotel reservation. Cancellation policies can differ depending on the hotel brand, geographical area, or time of year (will usually result in the charging of the first nights stay as a penalty for cancellation)

This is especially apparent during peak periods, and for example, in the case of trade fairs, hotels know many people will attend the event in question every year. Armed with this knowledge, hotels will often increase their rates when they are taking place (rates may be up to 500% higher) as well as putting in place a much more stringent cancellation policy.

This is why having a good travel management company on board will help when sourcing the best rates available when needing to attend events or meetings in an area when an exhibition is occurring. If you do not mind the commute, then sometimes it can save you money by not staying in the actual location, but by staying 20-30 Miles away, as even adding the cost of a car hire in, could still work out cheaper overall.

It's always best practice to check the terms of the cancellation policy before booking. Normally, room rates with a non-refundable cancellation policy will be lower in price compared to a fully flexible or semi-flexible rate. If indeed you have booked the lower non-refundable option and cannot make the trip, you will still have to pay the fee to the property for the nights stay.

When working with a business travel agency, your dedicated Account Manager will look to work with relevant suppliers who can add value and savings to a business travel programme negotiating corporate rates your organisation can access for a given time stipulating your own cancellation policy rules.

Business Travel IQ recently reported that In 2017 some large hotel groups looked at their cancellation policy and extended the amount of time when a cancellation needs to be made before incurring a fee, from 24 to 48 hours, and in a few cases, 72 hours. This gives the corporate traveller less time in advance to cancel their booking, meaning the options left for them would to either book a fully flexible rate, be forced to book outside of travel policy or look for alternative providers.   

Whether your travel is managed or un-managed, it's paramount you are fully aware of the cancellation policy in place for your stay, failure to cancel in time on a regular basis can be detrimental to your overall business travel spend.

The SME's Guide to Procuring Travel Management Services

About Sarah Walton

Sarah is one of our experienced Business Development Managers and has worked within the travel industry for 25 years. She brings extensive knowledge to the business and loves nothing more than helping a client achieve their business travel objectives.
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