IHG hotels, the chain that includes Holiday Inn, Kimpton, Intercontinental, and related brands, is bringing its flexible cancellation policy to an end. All of the major hotel chains have sought to encourage new bookings by making them very low risk for consumers. IHG says, though, ‘no more’ after September 30.

1. For bookings made prior to April 6, 2020: Any non-refundable/pre-paid bookings for all future arrivals can be cancelled without penalty (up to 24 hours before arrival) up until September 30, 2020.
   
2. For bookings made from April 6 to September 30: Any non-refundable/pre-paid bookings for arrivals up to and including September 30, can be cancelled without penalty (up to 24 hours before arrival) up until September 30, 2020.
   
3. All reservations made from October 1, 2020 will be subject to the terms and conditions of the rate booked

We’ll see if flexible cancellation only through September 30th can hold. There’s a huge desire to get hotel pricing and restrictions ‘back to normal’ but I don’t think the world is back to normal yet, and if other chains don’t follow IHG will be at a competitive disadvantage.

Flexibility Only Through September 30 Runs Against The Tide Of The Travel Industry

Back in April I wrote that airlines would have to keep waiving change fees for the foreseeable future. The world is just too uncertain now to make inflexible plans – indeed it’s the world that’s changing your plans more than your own preferences.

United Airlines is permanently eliminating change fees on domestic tickets (excluding basic economy fares). They recognize that Basic Economy is the new tool for segmenting business travelers from leisure travelers, change fees are no longer a key part of that, and this widens the gulf between basic and regular coach fares strengthening their approach.

Following Southwest Airlines in eliminating change fees is a step in the right direction from a public health standpoint, too. It makes no sense to incentivize someone that’s sick to travel. We want to make it as easy as possible for someone sick to reschedule their plans. That’s the best thing for a travel provider’s employees and for their other customers, who are better off not traveling with someone who is sick.

In the hotel industry, Hyatt has been the most aggressively allowing penalty-free cancellation of non-refundable rates up to 24 hours prior to check-in through July 31, 2021 – although individual hotels on specific dates are allowed to be more restrictive (so you can’t use this policy to squat on rooms around major events, to the extent those exist again).

Hotels Will Still Need Flexible Cancellation For Some Time

Hotels returned to 50% occupancy in the U.S. in early August but have ticked slightly down since then. We’re leaving the summer peak travel season, when hotel occupancy usually drops anyway and this year leisure travel won’t be replaced by business travel.

It’s frequently a much smaller upcharge to book a flexible cnacellation reservation. I’ve loathed advance purchase rates at hotels to begin with and often found cancellable rates worth the premium. In the current environment I couldn’t imagine booking a non-cancellable rate. The course of the virus remains an unknown, and the possibility remains of getting sick and having travel plans upended as well.

Customers need confidence to book, and one way to provide confidence is flexibility. As of now IHG is saying that if you book many of their rates starting October 1, and the world changes, you’ll be stuck. That makes IHG hotels that adopt stricter cancel policies uncompetitive with peers from other chains.

Of course if Marriott and Hilton follow (clearly IHG’s hope!) there’ll be fewer opportunities elsewhere, besides making cancellable bookings (or shifting business to a smaller chain like Hyatt).