Can Hotels Cancel Your Confirmed Reservation? January 24, 2019 by Raul Belford

Yesterday a Twitter user asked me what liability a hotel has when you hold a reservation and their opening is delayed. It’s an interesting question, and one that I figured was worth addressing on a broader level, since there are many reasons you may not get the hotel room you paid for.

What can cause a hotel to cancel a reservation on you?

You probably assume that if you have a confirmed reservation then you’re actually, you know, confirmed. Unfortunately it’s not always that straightforward, as occasionally you’ll find yourself in a situation where a hotel is unable to accommodate your reservation. The three most common reasons for this are as follows:

  • You’re booking a stay at a new hotel, and the opening is delayed
  • Much like airlines, hotels often overbook, and there are situations where the math doesn’t work out in their favor, and where they actually have to “walk” people
  • After the fact a hotel can decide they no longer want to sell you that room, either because of some huge event (a concert, sporting event, solar eclipse, etc.), or because a big party wants to buy out the whole hotel

There are no US laws regulating hotels not honoring reservations

When flights are oversold, the Department of Transportation has some laws in place regarding the compensation that’s legally required, even if the airline and passenger can often come to a “voluntary” agreement. However, there’s no US government organization that regulates hotels not honoring reservations.

That’s at least the case in the US, though there may be other countries that have stricter laws for innkeepers.

When there aren’t local laws regulating this, this just comes down to a contract dispute, meaning the only legal recourse you have is small claims court. However, that’s a bit of a PITA, so presumably you’d only want to pursue that as a last resort.

The other surprising thing is that the terms & conditions of most reservations don’t address this. They talk about the penalties that apply to guests should they cancel outside the acceptable window, but say little about the obligation of hotels.

Hotel policies differ on walking guests rather than canceling in advance

Major hotel chains have internal policies about walking guests (when there are more people trying to check in than rooms available). In general you can minimize your chances of being walked by:

  • Having status with a hotel chain, since they’ll typically walk guests with status last
  • Booking directly with a hotel chain, since they’re likely to walk third party bookings before those booking direct
  • Letting the hotel know if you plan on arriving late, since they’ll often walk people in the order they show up

In the event you are walked, each hotel group typically has guidelines in place for how to deal with this. For example, in 2013 LoyaltyLobby shared IHG’s internal guidelines for walking guests (I can’t guarantee this is still accurate, but just to give you a sense):

  • The manager on duty should explain the situation to the guest and apologize
  • The hotel must pay for the first night at a comparable property, ideally also an IHG brand
  • The hotel must reimburse guests for any reasonable expenses incurred
  • The hotel should refund the guest for any pre-paid hotel expenses, and obviously not charge them for anything
  • If the guest is still not happy, the hotel should take steps necessary to make the guest happy

Marriott is one of the few hotel chains to publish guidelines for this, which they call their “Ultimate Reservation Guarantee.” It’s available to all elite members, and clearly outlines the compensation they can expect if a hotel walks them. I appreciate how publicly transparent they make this, while most other hotel chains only have an internal policy regarding this.

Hotels canceling in advance is trickier

For most hotel chains, internal guidelines about not honoring reservations are specific to walking guests. In other words, it only applies if they “walk” you day of, and not if they cancel in advance.

This is the situation that’s really tricky, and what the Twitter question was referring to. If you make a booking in advance and are told in advance that the hotel won’t be able to honor it, you’re sort of out of luck, at least in terms of your legal and contractual rights. There are no laws protecting you, and also the hotel policies for walking guests typically don’t apply under these circumstances.

In this event I think it’s reasonable to request:

  • A stay at a comparable hotel at their expense, along with some compensation (especially if you would have been entitled to elite benefits at the hotel you booked, but not at the one they rebooked you at), or a future free stay
  • Reimbursement for your non-refundable travel expenses

99% of the time hotels are reasonable in offering that. Hotels are notorious for opening later than expected, and most of the time they proactively offer the above choices.

If you’re getting pushback from the hotel and they’re actually not offering anything for canceling your reservation, I’d reach out to the hotel’s corporate customer service department. Technically it’s not their responsibility, and technically there are no terms requiring them to help, but in practice they should be able to nudge the hotel to do the right thing.

Bottom line

Most countries don’t have laws regulating what happens when a hotel decides to cancel your reservation. So you’ll have to rely on their internal policies — for walking guests there are usually decent policies in place, while cancelations in advance are more complicated, since they aren’t typically treated in the same way.

You can minimize your odds of being walked by booking directly with the hotel, having status, and letting the hotel know if you’re arriving late. Meanwhile for cancelations in advance, you’ll want to try to negotiate with the hotel directly, and escalate to corporate as needed.

Leave a Reply

Your email address will not be published. Required fields are marked *