I know in the past there has been talk of this not being possible. I don't know if it is still true. Since room only and packages are two completely different systems you can not easily move from one to the other and there is no way for the payment to. If you are still purchasing tickets, the room only discounted rate can often be used in a package. Then you would still be having your package, just with a new code. Therefore there is no cancelation. As far as the fee, I don't know if they will charge it anyway. Even if they wave that they may charge the change fee. Even though you are upgrading your hotel, if you aren't buying tickets then you are spending less and there is no reason for them to wave any fees - often with the package if your change increases the cost of your vacation they wave the change fee.