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Free If You Use It, Pay If You Don’t

Recently I redeemed some of my Hilton Honors points for a free night’s stay in East Brunswick, N.J. (Stop snickering; I had good reasons.) The confirmation advised me that no-shows or too-late cancellations “will be charged one night’s room and tax at the hotel’s Best Available Rate for that date.”

Excuse me? If I use the room, it’s free, but if I don’t show up, I get charged the “best available rate?” This, by the way, is not the actual best available rate, but it’s the best one they want to give to anyone who does not qualify for a deal like those available to AAA or AARP members, or to the government, the military, the clergy, or other homo sapiens who are able to negotiate a better bargain.

I have never had problems with reading comprehension, but I figured this could not possibly mean what I thought it meant. So I asked my associate, Amy Laburda, to make a few calls.

It turns out that Hilton runs its hotel rewards program a lot like the S&H Green Stamps that I remember from my childhood. You have to print the rewards certificate and present it at the hotel front desk; otherwise, the hotel (many of which are run by local franchisees, not Hilton corporate headquarters) does not get paid. Since Hilton does not pay the hotel in the event of a no-show, the hotel reserves the right to charge the absent guest. These policies are not accessible until you are well into the process of booking the room online.

Every Hilton hotel (including the Hampton Inn, Embassy Suites, Hilton Garden Inn and Doubletree brands, among others) has a computer and a fax machine. The certificate is sent to the customer by email in the first place. Is Hilton serious when it says the hotel cannot get a copy of the rewards certificate if the customer does not hand-carry it there? If all else fails, have they never heard of Federal Express? Or the Postal Service?

Amy politely asked the Hilton rep if this is about the convenience of the hotel. Not convenience, no, he said, clearly a little uncomfortable. He got off the line to consult a supervisor, and returned to say, basically, that it is what it is.

Hilton is not alone. Hyatt’s Gold Passport program has a similar clause, lodged in the terms and conditions of the program. Mariott Rewards’ website doesn’t address the cancellation policy for its rewards program at all. According to the customer service associate Amy spoke with on the phone, the policy is determined by each individual hotel, but he believed that, in general, the customer would be charged one night’s room and tax, though as with the other programs, the reward points remain untouched.

I imagine that a lot of people are not especially pleased when they find hefty, unexpected charges on their credit cards after a last-minute change in travel plans causes them not to use a room they were not supposed to pay for in the first place. Since the point of a brand loyalty program is to create brand loyalty, this strikes me as counterproductive.

But what do I know? I never collected trading stamps.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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