Did you know that if you redeem points for a hotel stay and end up needing to cancel within the cancelation period, you could actually be on the hook for the cash cost of the stay? As absurd as that sounds, it is true with some major hotel loyalty programs, and it tends to catch people off guard.
I get emails about this from shocked hotel guests all the time, so in this post, I’d like to cover the basics of this policy. After all, it’s something that I think many people don’t realize when they make a points booking.
In this post:
Hotels may charge cash when canceling points bookings
It’s always exciting to be able to redeem points for a stay at a luxury hotel that may cost over $1,000 per night if paying cash. What many people don’t realize is that if you need to cancel after the cancelation deadline, it could cost you an arm and a leg.
You’d assume that if you cancel a hotel booking after the cancelation deadline, at worst you’d forfeit the points that you spent. But that’s not the case. With both Marriott Bonvoy and World of Hyatt, it’s common that if you cancel after the cancelation deadline, you’ll be refunded your points, and you’ll be charged the cash cost of your stay.
What’s the logic for this? It would appear the issue is that the hotel loyalty programs don’t reimburse hotels for award stays if you don’t actually stay. So therefore the hotel’s only other option to be reimbursed if you cancel within the deadline is to charge you the cash cost of a stay.
Hotels do a lousy job disclosing this hidden rule
I think the policy of charging someone for a cancelation in a currency that’s different than what they reserved in is incredibly shady. But what I think is actually even worse is how poorly this is disclosed by the major hotel groups.
For example, say you book a five night stay at the St. Regis Aspen with cash in peak season, which costs around $13,500.
When you get to the booking page, you’ll clearly see it disclosed that if you cancel past the deadline, you’ll be charged for the entire cost of the stay.
Meanwhile say you redeem Bonvoy points for your stay, at the rate of 648,000 points for the five nights. The cancelation policy that you agree to just indicates that they “will assess a fee if you must cancel after this deadline,” and “we will charge your credit card” for a fee that “equals 99 percent of your room charge for your entire reservation.”
If you ask me, the published policy for points doesn’t at all make it clear that you’d be charged in cash if you need to cancel. Instead, it’s standard for the hotel to send a pre-stay email, where they disclose that you’ll be charged in cash if you need to cancel.
As another example, an OMAAT reader just booked a stay at the Ritz-Carlton NoMad New York. Shortly after booking, he received an email from the hotel about the cancelation policy:
As you have confirmed a Rewards Redemption stay in a [room type] with [hotel confirmation number], we would like to kindly reconfirm the cancellation policy associated with your reservation. While the policy notes that a fee applies if canceled within 3 days of arrival, it does not specify the exact amount.
Please note, should you need to cancel within that window, the points used for your booking will be returned to your Marriott Bonvoy account, and a cancellation fee or no-show fee of $1345 would apply, as this reflects the equivalent value of the points redeemed for your stay.
Isn’t it ridiculous that the hotel literally acknowledges that the cancelation policy at the time of booking doesn’t actually specify how much you’d be charged if you needed to cancel?
Do hotel guests have any recourse in these situations?
Hotels will typically claim they have no flexibility with this policy, and will argue that people should buy travel insurance to deal with any issues that could arise within the cancelation period. The reality is that many travelers don’t have travel insurance, and many policies don’t cover all the potential scenarios that could arise.
I’m no legal expert, but I can’t imagine that the way that hotels use this policy would hold up in court. When you make a booking, they don’t disclose what you’re actually going to be on the hook for if you need to cancel. And then they just send you a follow-up email after the fact, which a guest may or may not read.
I’ve definitely heard of situations where people have been able to negotiate their way out of this policy, though not necessarily consistently. For that matter, worst case scenario, I’ve heard of hotels agreeing to check people in (technically), so that they just forfeit the points, and not cash.
I’ve also heard some people say that they’ve simply lowered the credit line on the card that the hotel has on file, so that they can’t actually charge them the amount due. One important consideration is that ultimately your participation in a hotel loyalty program is at the discretion of the company, so if they don’t like something you do, they can also ban you (which isn’t to say that they would, but they could).
I truly find this to be one of the most ridiculous policies in the hotel industry, and I can’t believe for how long it has gone on, with hotels making no actual effort to better disclose what the cancelation policy is.
This really seems like it shouldn’t be an issue at all, as it only exists because of how reimbursement works between hotel groups and individual hotels when guests don’t actually complete their stays.
As much as we love to pride ourselves in how many cents per point of value we can get for our hotel redemptions, if you need to cancel, you’ll regret having maximized your points so much!
Bottom line
It’s important to remember that canceling a hotel points booking past the cancelation deadline can be very, very expensive. Rather than forfeiting the points you redeemed, you can be charged the cash cost of a stay, particularly with Hyatt and Marriott. For those of us who are good at maximizing points, that can be really costly.
This catches people off guard all the time. I find the policy to be ridiculous in the first place, but I find it even worse to what extent the rules aren’t clearly disclosed when booking.
What do you make of the way hotel groups handle canceled points bookings?
This has been policy with Hilton for perhaps the last 30 years. But so far even though I have cancelled late I have never been charged:
- If you have a good excuse like flight cancellation Hilton has been 100% agreeable to changing the date if you contact the hotel directly
- even when changing the date they have still only charged the original advance booking rate
- Hamption SEATAC South Centre...
This has been policy with Hilton for perhaps the last 30 years. But so far even though I have cancelled late I have never been charged:
- If you have a good excuse like flight cancellation Hilton has been 100% agreeable to changing the date if you contact the hotel directly
- even when changing the date they have still only charged the original advance booking rate
- Hamption SEATAC South Centre was even kind enough to change the date for free and then cancel the reservation when the Alaska flight was totally changed and eventually arrived 16 hours late with a routing change.
Hilton at one time had a policy for non-refundable reservations that allowed hotels to change the date as a courtesy without fee as well. Don't know status on this.
The biggest problem with this is when your flight is delayed, and you miss your night paid with points through no fault of yours, and still on the hook for a large cash charge for a no-show.
I just experienced this at Westin Anaheim, they sent their boiler plate threat of $911 cxl fee.
What if I my travel is delayed by a day? I get the honor of paying $911 for ext issues?
Bonvoy needs to fix this.
Another issue with this (both Marriott and Hyatt) is that the cash cancellation rate may be an inflated rate... I remember booking a hotel where the nightly rate fluctuated in June between $400 and $700. I booked one of the "$400 nights" with points - the follow-up email said that if I cancel I'll be charged $700-ish.
This is also the case with IHG, and my recollection is that they do not give you the choice of forfeiting the points instead of paying that day's cash price.
This is great, this prevents people from making bookings they do not or unsure if they are staying; removing inventory from those that actually need it.
Also, kind of your fault for not reading that fine print. I have been at fault in the past but just decided to not cancel.
What happens when they keep burying details deeper and deeper and requires you to get legal counsel to explain... Oh wait that's been happening for a few years now but no worries it will get worse so you can victim blame more people on not reading. I can't wait until you find out what you have up to use AI on a browser.
If you are gonna cancel a hotel reservation booked with points, do the following:
1. Log in to your card app and lock the card temporarily from receiving any new spend.
2. Cancel the reservation.
3. Don't use the card for a while, maybe a month or two, or only unlock it when you know you are going to use it, then lock it again.
4. After a time, unlock the card; they probably won't charge you anything.
What's even more disgusting is that the St Regis has 30-day cancellation policies on award stays in peak season. I can't imagine booking a room on my points and knowing that if ANYTHING were to happen I'd be out $1500/night.
I recall that at least some hotel chains will allow you to forfeit the points rather than pay the cash penalty, as per the T&C. Might be Hilton or Marriott. I am surprised Ben did not go into this level of detail.
He said at the very beginning that Marriott and Hyatt are the only chains that do this
I know Hilton also doesn't.
How is it legal to hide the fee amount from the customer? They don't disclose the amount upfront - just mention "fee" which can be $10K or any number they like. Doesn't the FTC require them to disclose all fees upfront?
You can cancel your credit card the same time as you're cancelling the points booking. What are they going to do
No need to cancel the card, temporarily lock it. They can't do anything? Send it to collection? Tell them you don't accept any debt and that this amount is disputed. They will have to sue you, and this would not hold up in any court. They will have to prove damages. that they couldn't sell that room to anyone and that you caused them damages, out of the way they couldn't minimize, for example, by...
No need to cancel the card, temporarily lock it. They can't do anything? Send it to collection? Tell them you don't accept any debt and that this amount is disputed. They will have to sue you, and this would not hold up in any court. They will have to prove damages. that they couldn't sell that room to anyone and that you caused them damages, out of the way they couldn't minimize, for example, by selling the room again. Most of these hotels do sell that room, so they can't prove anything in court. Now, can they cancel your frequent hotel program? maybe but I don't think that Hyatt/Hilton/Marriot will do it if this only happens once. If they get multiple reports from hotels that you are doing this, then maybe. But once you're probably ok.
FWIW, I’ve had success avoiding the “no show” fee on World of Hyatt bookings by changing my reservation to a later date after the cancelation deadline to a date much further out, then canceling the updated reservation a couple of days later. It definitely can’t hurt to try if you’re in a pinch, such as a winter storm closing your destination airport like in my situation. I didn’t lose any money or WOH points as...
FWIW, I’ve had success avoiding the “no show” fee on World of Hyatt bookings by changing my reservation to a later date after the cancelation deadline to a date much further out, then canceling the updated reservation a couple of days later. It definitely can’t hurt to try if you’re in a pinch, such as a winter storm closing your destination airport like in my situation. I didn’t lose any money or WOH points as they were immediately refunded (even got a portion back by changing my dates the day before the original check-in date.)
I have successfully done the same thing with IHG reservations.
I’ve only had to cancel one points hotel booking after the cancellation deadline had passed, as I made the mistake of not realizing the deadline was 5 days before instead of the 2 I usually expect. Called Hilton (not the hotel) and gave them an excuse and thankfully they did cancel the hotel no charge. Probably helped I’m Diamond (thank you Hilton Aspire) and I had never asked for forgiveness previously.
Goes to show that it never hurts to ask once in a while.
I’ve yet to find a travel insurance policy that covers no show fees. Only prepaid deposits, but not things charged after arrival.
If someone knows of one, please advise.
Ben,
Shouldn't this be called "outside the cancellation period"? If I'm within it then my cancellation would still be OK.
If you are "within" the cancellation deadline, then you're on the hook. If you're outside of your cancellation deadline/period, then the date has not yet been reached and you can still cancel.
This is clearly deceptive, and no, it wouldn't hold up in court. The trick is *getting into* court: every hotel rewards program has terms and conditions that require members to use out-of-court arbitration to settle any disputes, and members waive the right to participate in class action lawsuits. Arbitration is time-consuming and one-sided, and few attorneys would want to deal with it, which is exactly why these terms exist.
Lol any half decent attorney knows their way around what you just said.
I’ve yet to find a travel insurance policy that covers no show fees. Only prepaid deposits, but not things charged after arrival.
If someone knows of one, please advise.
I’m a class action lawyer, and I certainly wish that were true. But companies succeed in kicking class actions out of court every day on this basis, including against the best plaintiffs lawyers out there. Thats why there is an entire cottage industry of firms that now practice “mass arbitration” as a workaround.
Stuff like this needs to be done by regulation. The cities/states need to regulate the industry like Mandani is doing in NYC. https://www.nyc.gov/mayors-office/news/2026/01/mamdani-administration-bans-hotel-hidden-fees-and-unexpected-cre
How is it legal to hide the fee amount from the customer? They don't disclose the amount upfront - just mention "fee" which can be $10K or any number they like. Doesn't the FTC require them to disclose all fees upfront?
It was headed that way in the last American Administration, including an airlines passenger bill of rights ...
But, Americans do as they do and screwed themselves.
Will likely unscrew in Nov of 2026 and 2028 - then mess everything up all over again in 2030