Your Rights if a Hotel Refuses Your Confirmed Reservation

I wrote recently about the law relating to airlines bumping passengers and the compensation you are due if that should happen.

Hotels sometimes overbook their rooms, the same as airlines oversell their flights, and occasionally they end up being caught short and having too many guests show up and too few rooms to accommodate them all (again, the same as airlines sometimes having oversold flights and having to bump passengers).

Hotels sometimes find themselves with a problem for another reason, too.  Maybe a room or rooms have to be taken out of inventory due to problems in the rooms.  If they suddenly have a fault with one of their services that makes several rooms unserviceable, they’ve got a problem, just the same as if they’d oversold their rooms.

But while we are given some rights and protection against airlines bumping us off flights, we have no such formal rights or protection if it happens to us with a hotel reservation.  And if we had to choose between being a few hours late to get to my final destination, or finding no room available at the hotel once we got there, most of us would probably prefer being late to not having a room for the night upon arrival.

Happily, that’s not entirely the end of it – the law of contract imposes duties on hotels, even if the government doesn’t.  And that leads to the first thing you should do any time you book a hotel.  Read the fine print of the reservation ‘confirmation’ you receive to make sure that there aren’t any escape clauses allowing the hotel to cancel at any time and for any (no) reason and with no obligations other than to refund any money received.  If there’s a ‘must checkin by’ time on your reservation or any other obligation on your part, be sure to conform with that requirement or else the hotel will be ‘off the hook’ and be able to cancel your reservation without incurring any obligation to you.

Although there are no federal obligations on hotels and how they handle bookings once accepted, there are also no federal blocks on bringing legal action against hotels locally in your friendly local district or small claims court, so as least you do have convenient accountability if it all becomes irretrievably bad.  Note that this assumes you can convince the court that the proper jurisdiction is where you live rather than where the hotel is located or where the hotel group’s head office is – this is usually something you can do in small claims court, but it is something you need to pay attention to.

Furthermore, although there are no federal rights, some states do impose obligations on hotels.  How do you find out?  You could ask the hotel manager ‘Can you tell me please what your obligations are under state law?’.  If he lies, or truly doesn’t know, and says ‘I don’t know’ or ‘You have no rights’ that will count against him if you subsequently find that there is a state obligation.

You could subsequently ask the state’s Attorney General or Consumer Affairs departments, if that becomes necessary.

Reading the Fine Print

I’m getting lots of questions from people who have suffered from having apparently confirmed bookings either cancelled or changed or in some other way varied by the hotels.  The question is always the same – ‘What can I do?’ and/or ‘Can the hotel do this?’

Sorry, but I can’t answer these types of questions, and neither could a high paid attorney, without seeing the exact and complete details of your booking confirmation and all correspondence exchanged between you and the hotel, plus any related contractual language on the website and booking page that the supplier (whether it be the hotel or a middle-man booking service) may seek to include into the actual and implied terms of the contract associated with the booking.

The answer to your question may well be lurking in the booking terms and conditions, but without seeing a guaranteed complete set of all such actual and implied terms, I can’t express an opinion.  Plus, I’m not an attorney, and so shouldn’t be expressing opinions in any case!

What Hotels Normally (and Should) Do

If a hotel knows about an overbooking problem in advance, they will probably ‘protect’ the overbooked guests by arranging alternate rooms at some other nearby hotel and then ‘walk’ them to a comparable hotel when they check in, and will have this all in place for when you arrive.  Such an arrangement might include providing a taxi fare to get to the next hotel, or maybe a free meal or something as well, and if you’re lucky, a room upgrade or a nicer hotel than the one that couldn’t accommodate you.

They’ll also traditionally allow you to make a free long distance call to tell someone that you’re not in the hotel you said you’d be in, but these days, we all have cell phones with effectively free and unlimited calling, so who cares about that any more.

Sometimes the hotel will not have alternative accomodation already arranged, particularly if it is late at night and they’ve decided you’re simply not going to turn up, and particularly if there is a shortage of other rooms at other hotels, making it hard for them to hold rooms elsewhere ‘just in case’ you do arrive.  But that is their problem, not yours, and if you’ve a guaranteed anytime-checkin reservation, then you absolutely should not feel apologetic at checking in ‘late’ because there’s no such thing as ‘late’ for that type of reservation.

You would not (should not) be charged extra for the alternate accommodation even if it costs more.  If it is less expensive than the room you booked at the original hotel, you could fairly ask for a refund of at least the difference in cost, and perhaps extra to compensate for not getting the room or comparable room to that promised and confirmed.

It is of course hard to establish exactly what the respective rates are – expect the hotels to play games with you on that point.  They might compare rack rates rather than real rates – ie, maybe the hotel you booked in has an official ‘rack’ rate of $200 a night and the hotel you ended up at has a rate of $250 a night, so in theory, you have been ‘upgraded’.

But what say you actually paid $150 for the room you didn’t get, and the alternative room you were moved to could be bought through a last minute discount website for only $125.  What might you be entitled to then?

There are many different scenarios depending on what rates the hotel chooses to use to ‘prove’ its calculation, and as a practical reality, as long as the rooms and hotels are of reasonably comparable standard, and the room rates more or less in line, it probably would become more trouble than it is worth to demand too much compensation.

The hotel also might, if they know sufficiently in advance, pick and choose who they’ll walk and who they’ll keep in-house.  It is probably true that they’d most want to look after their frequent guests and known VIPs, and they’d prefer to look after guests who paid more money and who booked directly, than to look after guests who bought discounted rooms through a wholesaler.  If the hotel had to choose between outright refusing/refunding a booking that was offering them $50 of revenue for the hotel room for the night, or a booking that would net them $100, it is obvious which one they’d rather accept.

But there’s almost certainly nothing in your booking terms and conditions that says ‘Hey, guy – you’ve got a second class low priority reservation and we might change our mind and bump you if we can sell the room for more’.  So no matter how the hotel picks and chooses its favorites, if you’re the one they refuse, you have equal and full entitlement to as much compensation as their most jewel-encrusted ultra-elite frequent guest program member.

It is not unheard of for hotels to try and ‘guilt’ their guests by saying something like ‘Oh, you should have booked direct’ or ‘Well, you’ve got a discounted room’ or something similar to suggest that their booking has a lower entitlement than other bookings.  That is nonsense.  Unless the reservation says on it ‘Because you didn’t book directly with us, we reserve the right to cancel your booking at any time for any reason’ or unless it says ‘You paid less for your room than some suckers did, so we might decide to cancel your booking if we think we can sell it for more money to another sucker, and tough luck to you if we do’, then your reservation has all the rights and entitlements of any and every other reservation.

If a hotel doesn’t like selling rooms at lower rates, and if the hotel doesn’t want to sell through third party websites and agents, then no-one is making them do so.  They are free to set their rates any way they wish, and to choose who they allow to resell their rooms.  But if they agree to accept your booking, then it is a confirmed booking with all the entitlements of any other confirmed booking, unless it has some special exceptions attached to a conditional confirmation.

Ask the hotel ‘So where on my reservation does it say that my reservation is inferior to other reservations?  Where does it say you might decide to cancel it, and if you do, it becomes my fault not your fault?’

The key issue to concentrate on is not the status/’quality’ of your booking, but how the hotel ‘makes you whole’.

Lastly in this section, here’s a fascinating article that managed to obtain an internal document that explains the Holiday Inn (IHG) official policy and internal procedures for overbooking.  It is very interesting to read through the document to the point, towards the end, where they list who they do and don’t ‘walk’ when full, and what their policies are for compensation.

First In, First Served

To a certain extent, it is a case of ‘first in, first served’.  If a hotel has, say, 200 rooms, and for tomorrow night has 100 guest rooms with the guests staying over, and another 110 guest rooms checking in, in theory this suggests they will be 10 rooms short.

However, they’ll probably not panic, and hope that some of the 100 rooms with guests already in them will have guests check out early, and some of the 110 new guest room arrivals will either cancel or simply fail to turn up.  These two factors mean it won’t be until late on the check-in day that they start to have a feeling for if they’ll have a problem or not – particularly with rooms that are merely held to 6pm rather than ‘guaranteed’ for late check-in.

So, if you have a choice as between checking in to your hotel earlier in the day or later in the day, and it is important to you that you’re in the hotel you expect to be in, you should of course check in earlier rather than later.

Here’s a useful tip :  If you’re going to be checking in late, call the hotel, before 6pm, and tell them ‘I want you to know that I am in town and I will be checking in, I just have wall-to-wall meetings (or whatever) and won’t be arriving until (whenever).  Please hold my room for me – do you want to take my credit card details now?’  And, after concluding the call, ask ‘And what is your name, please?’.

That way if the hotel knows it will be walking some guests, it is more likely to treat you as if you’d already checked in and hold a room for you, even if you arrive late.

It is also true that if you belong to the hotel’s loyalty program, you’ll be less likely to be walked.  Even ordinary rather than elite members still have a higher priority, so it pays to belong to the loyalty programs of all hotels you stay at, no matter how often you stay at them.

Not All Confirmations are Equal

Here’s something to be aware of.  If you are booking through an online travel service, maybe the confirmation number you get is not a confirmation number from the hotel, but rather from the online travel service.  If you wave the wrong confirmation number at the hotel, you’re giving them a huge excuse to turn you away.

‘Oh, that’s not our confirmation, we never confirmed the booking’ is what you’re inviting them to say.  They’ll mutter something about it being the booking service’s fault; maybe they’ll deny ever getting the booking from the booking service, or maybe they’ll say ‘you are their customer, and they are obliged to make other arrangements and compensation for you, not us’.

You know what – they might even be correct when they say that!  But good luck trying to get something sorted out with a customer service agent from your online travel agency (quite possibly located in a far away country) when you find yourself stranded late at night.  So make sure that your online booking includes a confirmation number direct from the hotel.

Then you can say ‘It is true I booked through another service, but this is your confirmation number, not theirs.  You confirmed my booking, through the other service, and so you are required to honor your confirmation.’

There are two more very important related things you need, in addition to a confirmation number.

First, you need a description of the room that has been confirmed, along with the rate payable and what is included/excluded.  If you booked a premium room or whatever, it should say so, to avoid you being downgraded to a standard room.  If you booked a room for three people, it should say so, again to avoid being charged extra or being told that your room is only for two not three people.

Second, you need details of the hotel you are booked/confirmed at.  I’ve seen examples in the past where a guest was indeed officially confirmed, but at the wrong hotel.  ‘I’m sorry sir, but that confirmation number is for the other Marriott, on the other side of town – you must have booked the wrong Marriott’.

Your Rights and What to Ask For

But what about your rights if the hotel turns you away?  What can you insist upon?  Here’s an interesting story of a Hilton that apparently simply unilaterally cancelled an otherwise confirmed reservation, albeit two days in advance of checkin.  (If you can’t open the link, search for the text “The Mystery of Vanishing Hotel Reservations’ on Google and open up the Wall St Journal article that will appear at or near the top.)

The amusing part of the WSJ story, and an angle it doesn’t explore, is that the Hilton cancelled the booking of an attorney.  We hope he chooses to use his own knowledge of recourses open to him to full effect.

Back to what you can do.  Assuming you have a confirmed reservation, and especially if you’ve made any sort of payment – full payment or deposit or anything – you’ve every right to be given the choice of either a full refund or a substitute hotel being found for you.

If accepting a substitute hotel, you shouldn’t be required to pay any extra, and it should be of at least as good a quality, in at least as convenient to you a location, and you can define what makes a location convenient.  If you’re attending a convention and the convention hotel turns you away, then you’re going to be up for hassle and transportation costs going to the convention each day – clearly all other hotels will be less convenient (unless they are directly over the road!).

As long as you are ‘made whole’ you can’t really claim any substantial ‘damages’ because what really are the damages or losses you’ve suffered?  In particular, most small claims courts will only rule on and award actual costs/losses, not on inconvenience or ‘pain and suffering and anguish and distress’ type factors.  You need to go to a district or superior court for those sorts of intangible claims.  That’s not to say you’d not perhaps be entitled to such intangible claims, and maybe you’d even win your case, but you’d now be needing an attorney and what could have been simple and easy and with very little downside risk if you lose has now become potentially more costly and complex.

Generally when seeking compensation, you need to keep two things in mind.  Firstly (and see our article series on How to Complain) you’ll get more compensation if you are positive and reasonable and show yourself as someone who can be ‘won back’ and made into a future loyal repeat guest.  Secondly, it is always easier to ask any supplier for non-cash compensation.  Ask for a free upgrade on your next stay, or for a completely free stay.

If the hotel is a franchise hotel, it will probably be easier for them to give you a free stay at their hotel rather than a free stay at any other member of the chain, but if you’re not expecting to return back to that location, you could ask for a transferable voucher to give to someone else or you could see if they can give you a voucher for any other member of the hotel group.

You could also ask for more points to be added to your frequent guest account, assuming you belong to their program.

Sometimes it is possible to ask for food and/or drink discounts/vouchers, but sometimes not.  Some hotels have a funny accounting system which makes it easier for them to give away free rooms than to give free food and drinks.

A basic rule of negotiating, anything, anytime :  The first person to name their price invariably loses the negotiation.  If you’re in such a situation, ask the hotel ‘what can you do for me to fairly compensate me?’.  Whatever they offer is almost certainly a starting point for a negotiation, not the final/best offer.  We know people who have managed to increase the number of frequent guest points they’ve been given as an apology by over 50% compared to the first offer made.  If you know in advance the value of the points, you will be able to say ‘Gosh, that’s not even enough to get a night at your property, I think you should at least increase it to xx points so as to give me the equivalent of a free night stay’.

One more thing.  Don’t get upset at the front desk agent.  It is not their personal fault, and you’d rather have them onside so they use their discretion in your favor rather than against you.  They have some flexibility as to how they will compensate you and which other hotel they’ll put you in.  Treat these people well.

But, having said that, sometimes you might find yourself confronted with an unhelpful front desk agent.  Maybe they are just having a bad day, or maybe they’re truly uncaring.  But possibly also they don’t have much personal authority and are limited with what they can do.  Whichever the reason, if you’re not being fairly/well treated, remain calm and cool but simply ask to speak to the Duty Manager.  That person will have more ability to be more generous, if you can so persuade them!

If the hotel is unhelpful (as was the case with the Hilton) then you should do the best you can on your own and seek compensation from the hotel for the inconvenience and any extra above-the-line costs you incurred.  If they don’t respond fully and fulsomely, then its off to your small claims court, plus complaints to the relevant State Attorney General and to any franchising company the hotel belongs to and the Better Business Bureau and, why not, to the Federal Trade Commission too.

I’ve either personally or had people I’ve done bookings for occasionally experience such events, and happily, I’ve never had a problem with the overbooked hotel not doing all it could and all it should, but that’s clearly not what happened with this Hilton.

Full Refund Cancellations

What say the hotel simply cancels your booking, a week or more in advance, and fully refunds you any money you’ve paid?  Is that the end of it?

The hotel might claim that by doing so, it has no further liability or obligation, and that’s what happened with the Hilton story mentioned above.  But we disagree, because it truly is ‘all about you’ in such a situation and maybe their simply cancelling the booking and refunding any money doesn’t actually ‘make you whole’.

First, maybe you want/need to be in the particular hotel that is now cancelling your booking.  Maybe there is a convention/meeting in the hotel, or maybe your office/client is close by and there are no other hotels for several miles, or maybe you are part of a group and the rest of your group is all staying at the same hotel.

Second, maybe there are no other hotels now with vacant rooms.  Or maybe the other hotels are now selling their rooms at higher rates than when you originally booked your preferred hotel – perhaps all hotels were discounting their rooms back then, but now, with the region’s hotels almost full, they are all raising their rates.

In both these scenarios, you’re the loser if the hotel simply cancels your reservation and says ‘you’re free to go anywhere else and book with anyone else, no harm, no foul’.  Don’t accept that claim.

Most of all, you need to understand the reality of things from the hotel perspective.  It has a choice of which bookings it cancels and which it honors.  If it is important to you that you stay at that particular hotel, don’t make it easy for them to cancel your booking, and help them to realize that everyone will be better off if they choose someone else to cancel.

Tell them ‘Look – I know you have 100 rooms (or whatever the number is) and so you have 100 different guests to choose from when deciding to bump guests.  I’m in a special situation, because I’m more dependent on the confirmed booking you have already issued to me than some of those other guests, because (and now come up with your story), so I’d really appreciate it, and you’d save me a lot of extra cost and hassle, if you could honor this confirmed reservation and choose one of your other guests to cancel instead’.

If that doesn’t work, you can then indicate that you will seek full reimbursement for the extra costs and a fair allowance for the time and inconvenience involved with the loss of the confirmed reservation.  Tell them ‘maybe some of your other guests don’t have these same issues I do, and frankly, it would be cheaper for you to cancel them rather than me’.

The law of contract is clear – once a contract has been entered into, if one party then reneges on the contract, the other party has the choice of what way fairly makes them whole.  The hotel might wish that all it has to do is refund any money received, but if you now incur other costs, then as long as the confirmation terms and conditions don’t include a provision allowing the hotel to cancel, you can fairly seek to recover your extra costs from the hotel.

Using Overbooking to Your Advantage

There’s a flipside to this as well.  Some hotels have relatively primitive inventory management systems, and you can use that to your advantage.  If you need a room in a particular hotel, and if when you call the hotel directly they tell you ‘I’m sorry, we’re full that night, all rooms are sold’, don’t despair.

If it is a larger hotel, and if it is sold through online travel agencies and perhaps other wholesalers too, then often what happens is they’ve given allocations of blocks of rooms to these other outlets, and while the hotel has sold all the remaining unallocated rooms, it doesn’t yet know if the companies with reserved blocks of rooms are going to sell all their rooms or not.

I’ve sometimes had hotels that were officially full, but which still showed discounted rooms available on, eg, Expedia, so I’ve happily booked on Expedia.

In other cases, hotels don’t so much block out inventory as have what are called ‘open sale’ or ‘free sale’ arrangements where they promise to accept bookings from places such as Expedia until such time as they advise Expedia they are sold out on the particular date being booked, and there’s often a day of delay between running out of rooms and officially ‘turning off the tap’ with resellers.

The net result is the same, whatever the inner machinations.  You might still be able to get a room validly confirmed at a hotel that is truly full.  Just make sure you check in early!