If you can’t cancel the hotel reservation,try selling it online

In March, Alysa Turner, a publicist from Washington, booked a hotel room through Southwest Airlines’ rewards program. She paid $400 for a one-night stay at the Hilton San Francisco Union Square, but her plans changed after the window for canceling the reservation had closed.

Not wanting to be out the money, she found a hotel resale website called Roomer Travel. With little to lose, Turner listed her hotel room for $350 only 36 hours before check-in.

“It was a last-ditch effort,” she said.

As cancellation restrictions and fees become more widespread, travelers like Turner are pushing back. They are turning to technology and listing nonrefundable hotel reservations on resale sites.

Think of them as StubHubs for the hospitality industry.

EBay has long had vacation rental resales. Now Roomer Travel, with offices in New York and Tel Aviv, and Cancelon, a Boston-based company, offer similar services with a wider variety of options.

The practice of individual travelers’ reselling what the industry calls “distressed inventory” is still in its infancy. A room may not sell, let alone break even. And some who buy hotel rooms report erratic customer service.

Still, experts say the sites are catching on and have the potential to transform hotel reservations.

“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.

Instead, Roomer Travel and Cancelon create a secondary market for hotel rooms. Sellers can ask any price for a room, although resale is not guaranteed.

“The average discount is 45 percent,” said Richie Karaburun, a managing director for Roomer Travel, although rooms in cities with high demand like New York, Paris or Rome bring higher prices. At Cancelon, a prospective buyer can offer a lower, acceptable price.

When a room sells, Roomer Travel charges sellers a 15 percent fee, Cancelon 10 percent. Both say they coordinate with a hotel to make sure a booking name and credit card guarantee are changed. (Services are free to buyers.)

When a room is listed on either site, 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.

Jon Eichelberger, regional manager for North America at Trivago, said his service was devised to find what rates are available and can be booked, but, he added, “we can’t tell” where a room is coming from.

Shawn Haag, an instructional designer at the University of Minnesota, searched on TripAdvisor for a hotel room in Orlando, Fla., and booked two rooms at the Florida Hotel for $468. He was surprised when the booking confirmation came from Cancelon and not directly from the hotel.

“I hadn’t heard of it and was startled and a little nervous,” he said.

The site promised a full refund to his credit card, which he received several weeks later after changing his mind. At first, he received only a screen shot of a refund voucher.

Henry Harteveldt, a travel analyst with Atmosphere Research, said, “It’s important for the consumer to know what the product is and what it is not.”

He emphasized it was important that all changes are made to the system in the correct way. Otherwise, he said, “there’s a risk of someone showing up and claiming they have a reservation when they don’t.”

For its part, the hotel industry is cautious.

“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.

This story was originally published May 17, 2016 at 4:51 PM with the headline "If you can’t cancel the hotel reservation,try selling it online."