I’ve written about the risk you run booking an award stay with Hyatt or Marriott, that if you cancel after the cancellation deadline (say, for instance, your flight is cancelled) you don’t lose your points – you lose a cash forfeiture amount instead.
And your cash penalty can be really high. I once helped a guest avoid a $7000 charge for an award stay they cancelled six months in advance. They booked the stay a year out but it was completely non-refundable, something that hadn’t been disclosed to them at the time of booking.
Most people think you lose your points if you make a points reservation and fail to cancel by the deadline. But that’s not how it works. Hyatt’s program terms say that the guest will be charged cash and their points will be returned if they fail to cancel a reservation by the hotel’s deadline,
If a Member does not follow the proper cancellation policy for the applicable hotel or resort or if a Member does not check into the hotel or resort when scheduled, the credit card provided with the Award Reservation will be charged in accordance with the hotel’s or resort’s cancellation or no-show policy and any points redeemed for the applicable Award Reservation will be returned to the Member’s account.
One Mile at a Time covers a customer with a death in the family who had to cancel an award trip inside the hotel’s 15 day cancel policy.
He paid 63,000 points for a stay at The Grand Victoria Hotel in Lake Como.
His father passed away, and the funeral conflicts with this stay.
So he can’t go, and he’s been charged $5,500.
That’s how Hyatt’s (and Marriott’s) rule works. It’s also unacceptable. Most people assume that they’ll lose the points, not the cash, and that would be fair here.
However I do not see how on earth the charge is even enforceable because nowhere during the booking process are you ever told how much money the forfeiture will be. And even after booking, Hyatt’s confirmation emails do not tell you how much money is at risk.
On one confirmation I consulted I saw a cancel penalty of “50 PCT OF STAY” – but the cost of my ‘stay’ was 90,000 points, which certainly seemed to suggest the penalty would be 45,000 rather than thousands of dollars.
Cash forfeiture for cancelling too close to arrival, or for missing a trip for reasons beyond your control, is both an unnecessarily customer-unfriendly policy and the amount is never even disclosed up front.
Starwood Preferred Guest used to have a friendlier feature where you’d choose the cash forfeiture or just to lose the points you used to book the stay (you could choose). Both Hyatt’s and Marriott’s programs are run by ex-Starwood people.
If you’re ever in this position you’re better off keeping the stay, call and see if the hotel will be flexible. I’ve had a hotel waive their penalty. They were happy to get the room back to sell for cash instead of taking the points compensation. A hotel might also be willing to let you reschedule, if not completely cancel.
However if the hotel isn’t flexible, and you’re going to be charged for cancellation, don’t cancel! You might be able to find someone to take the reservation off of your hands. Just add them as a second guest name on the reservation. And if you can’t find someone to stay at the property, you might be able to pay someone less than the forfeiture amount to check in for you, avoiding the need to mortgage your home.
At a minimum, at the end, press to be shown where you ever agreed to the specific amount of the charge? In the meantime, until this rule changes, be careful where you redeem your Hyatt or Marriott points. You need to be able to afford a rack rate penalty if you have a last minute emergency or your flights get cancelled and you don’t make the trip.