Retail

What Is The Resale Value Of An Unwanted Hotel Room?

Stop us if you've lived this one. You booked a hotel room, then had to cancel at the last minute.  Surprise, you are outside the cancellation window — and thus you are on the hook for the charge.

Out of options?

Maybe not.

A new wave of firms is creating a resale market for hotel rooms that are about to go to waste and can't be canceled. eBay has vacation retails, and startups like Roomer Travel and Cancelon are entering the market and giving some travelers and option to save, and others an option to defer losses.

And though there are bugs - lots of rooms don't sell - the experts are starting to wonder if this is an idea with some legs.

“It’s definitely not going away,” said Christopher K. Anderson, a faculty member at the Cornell University School of Hotel Administration.

Anderson said that sites like Tingo and tripBAM that automatically rebook reservations at a lower price pose a bigger threat to hotels because they artificially inflate the cancellation rate. “Automatically canceling and rebooking is scarier to hotels because it has an adverse effect on pricing and profitability,” he said.

The secondary market, on the other hand, represents less of a loss to hotels (who collect their full price no matter what) and a possible boon to the buyer who will usually be able to get a good deal (though less so depending on how high demand for the city is).

When a room is listed on either Cancelon or Roomer, it also becomes available at online travel sites like Kayak and Trivago. Rooms through Roomer Travel also appear on Skyscanner; those on Cancelon are on TripAdvisor.

But there is a downside for consumers. A room becomes indistinguishable from any other hotel offering on those sites, which could sow confusion among buyers.

The hotel industry is also approaching the new area of lodging sales with caution.

“The American Hotel and Lodging Association is aware that sites like these exist and is constantly monitoring new entrants like these to the digital marketplace and their impact on customers,” Rosanna Maietta, a spokeswoman for the association, wrote in an email.

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