Scenario

Whats wrong with being first? We should be proactive, not reactive, said Jenny Richard, the controller at the Brookshire Hotel.

Im telling you, its simply a bad idea, at this time, in this market, replied Margie Jackson Director of Sales and Marketing. No one else is doing it.

The idea Ms. Richard had was to change hotel policy from that of allowing day-of-arrival room reservation cancellations to one that required a 24-hour notification of cancellation. The controller and the hotels assistant GM were proposing it, but Ms. Jackson was concerned about the effect it might have on sales and customer relations.

We shouldnt allow guests to cancel their rooms right up until 5 p.m. on their day of arrival, said Ms. Richard. Airlines dont let their customers cancel at the last minute, at least not without a big penalty to the party who cancels. We should do the same thing.

Like I said, no one else is doing that right now, replied Ms. Jackson. If we change our policy, we will lose guests to other hotels. I think it is a really bad idea.

Amanda Larson, the hotels GM, listened to the discussion carefully. Ultimately, it would be the GMs decision to change, or not change the hotels cancellation policy.

Questions

1. If you were Ms. Larson, the hotels GM, what are the sales-related factors that would influence your final decision?

2. Would it be important to know how other hotels in your market area were thinking about this issue? If so, how would you find out?