Can Hotels Cancel Your Confirmed Reservation?

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.

If you’ve had a hotel reservation canceled (either in advance or day of), what was your experience like?

Comments

  1. This is one of the only benefits I see of “non-refundable” (i.e. Hotwire, Priceline) reservations besides the lower price. If they run out of the room they already sold to you and collected a non-refundable payment for, they are obligated to find you the same or better room elsewhere. I got upgraded from a 2.5 star (even though they advertised it as a 3, but whatever) to a legit 4 star, when the original hotel was sold out.

  2. I’ve been walked plenty of times, never offered first night free or any compensation without a fight. But the two cancellations that come to mind were first back in 2005, following the death of Pope John Paul II, my hotel in Rome cancelled my paid in full reservation four days in advance with a full refund but no alternative bookings. I ended up staying outside of Rome and using public transportation back and forth. The last time was last year when my hotel in Paris cancelled my reservation, without email notification, after they ran my credit card number used on the reservation and it was declined a week before arrival. A few months earlier I had a problem with fraud on the card and the bank issued a new card number and I didn’t realize I needed to inform the hotel. They did however, apologize and find me a great hotel nearby.

  3. “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”

    It’s extremely unlikely that a hotel will compensate travelers for expenses that can total thousands of dollars in the event of a proactive cancellation.

  4. I was booked at a Hilton property in Charlotte and because of travel I didn’t get to the hotel until after 7:00 p.m. and when I was told they no longer had a room for me, they then told me they had re-booked me into another Hilton property near by. It has been a few years, but they did give me some extra Hilton points, maybe 5,000 or so and the rate was discounted as well.

  5. Very helpful article. But I’ve always wondered: what if I am going to use my hard-earned points for a multi-night award reservation at a very expensive resort and there is nothing comparable nearby. (Hello, Maldives.) What would they do for me as an elite member?

  6. I’ve only been walked once and it was arriving around 9pm the weekend of my mother’s funeral service. The worst. They did give me a suite for the next night however. Thanks Hilton Woodland Hills.

  7. Thus is one case where booking with an OTA makes sense. They will find you an alternative and equal hotel and the original hotel has to foot the bill for the difference in rate if any.

  8. @Mike I think this depends on the hotel. The only time I’ve ever been walked was on a Priceline reservation, and the hotel walked me to a higher-star sister property in a different zone. They also gave dining credit and free breakfast buffet. But Priceline only agreed to refund 1/3rd the price – I was expecting more, since the “zone” is the one thing you are supposedly guaranteed on Priceline.

  9. I was recently contacted by a Hilton guest relations person about an upcoming stay in a Paris. Our hotel is being remodeled with the opening delayed. We be proactively rebooked us in a nearby hotel (that costs more points than the original) for the same amount of points.

    Great service. FWIW, I’m Diamond. I assume they did the same for all affected reservations.

  10. As an SPG Gold, a Sheraton in Central Florida walked me at around 11:00 PM the night before my wedding. At the time, I did not know hotels overbooked, and I was as about irate as one can be without being disrespectful. They rebooked me at a nearby Westin (which was more expensive), gave me 7,000 Starpoints, and paid for the night at the Westin. (In other words, I got a free night and 7,000 Starpoints). I requested Platinum status during my honeymoon in Asia from SPG, but they refused.

    Even knowing what I know now, I still get angry when I think about it. Getting walked close to midnight on such an important night is…frustrating. The compensation was probably adequate, but the timing was terrible.

  11. New Denver Kimpton (Born) was delayed a week or 2 which caused them to proactively offer us the same rate at the other Denver Kimpton (Monaco) at the same rate. Busy weekend in Denver meant prices had gone up considerably from when I booked. GM also sent me a free night voucher for the Born. Was happy with honoring the rate and being proactive.

  12. I was walked once as a Diamond in auburn hills, I believe it was an hampton. I arrived really late from a delayed flight, like 1am and was told they were overbooked and were going to send me to one of their “sister” properties (same owner I guess), a comfort inn (!!!) a few miles away. I said, no chance I’m going to a non-Hilton property and driving anywhere, I’m tired. There’s an Hilton next door. They called and got me a room at the Hilton which was considerably more (I booked the room last minute that morning and the Hilton was like double). Other than apologies nothing else was offered and since I get breakfast for free they didn’t have to provide vouchers. No extra points. Didn’t follow up with management nor corporate.

  13. Booked Hyatt Ziva in Los Cabos for travel in August 2015. Booked rooms Feb/March 2015. Bad hurricane end of 2014 but figured hotels would be open by August. Hyatt website indicated hotel will reopen July 15. Two weeks before travel date, got an e-mail from Hyatt saying hotel will not open in time for August travel, and that the reservation was cancelled! No offer to rebook, no compensation, nothing. Major Hyatt let down!

  14. @Lucky
    It seems that the commenters experiences are not as good as your expectation. Is there a secret (gathered from your time of travel) from you to make it better?

  15. I had a hotel reservation booked through Expedia. I normally wouldn’t book through Expedia but was a Caribbean island with no chain hotels. The hotel cancelled it a week out. Expedia never returned my calls or emails. I received a refund. I paid a small change fee to Delta and changed my flight to another island.

  16. Another tip is to book through a travel advisor who is a preferred partner with the chain. Several chains have explicit “no walk” policies in place.

    Won’t try to list them, as I don’t want to leave someone out… but if you book a luxury hotel through a preferred agent for that chain, you won’t get walked…

  17. I always love telling my story of setting up camp in the hotel lobby after being told my room was not being honored. Within a few minutes, suddenly a room became available and I made sure I received a beaucoup of free points.

  18. Sorry but you are wrong here. Of course there are laws regulating hotels not honoring reservations. It’s called contract law. A Google search will bring up as much as you care to learn but the basics are simple. If you have a contract with another party and that party fails to perform fully as required by the contract you may sue for damages.

    The case law regarding hotel that fail to honor a bona fide reservation is well settled. Short of some misdeed on the consumer’s part the customer is going to win on the merits. The only question is the amount of the damages.

    While a hotel might try to claim any number of reasons why they weren’t able to honor the reservation most, including the hotel not opening on time, aren’t going to cut it before a judge. Since it’s the hotel that made the offer the burden us on them to show why they should be held liable and the burden will be extremely high.

    As a practical matter a hotel can cancel your reservation at will however a trip to small claims court is extremely likely to result in them having to pay you damages. So the best course of action if you are not satisfied with whatever offer is made by a hotel if they cancel your reservation is to book another hotel and immediately notify company headquarters that unless they honor your booking that you intend to take action against them for the cost of the new booking.

    Keep in mind that if a hotel “walks you” and you accept the walk, which you aren’t required to do, you can still sue for breach of contract since you had an agreement to stay at a specific hotel and they failed to honor that agreement. The question would be your damages. These could include the time that was wasted by you traveling to the hotel, waiting around for transportation to the one they want to send you to, travel to that hotel and any differences between the hotels including facilities, level of service, location etc.

    Your advice is extremely misleading as it implies that one’s only remedies are those you listed. That is simply not the case.

  19. “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.”

    This statement is not true. It is simply 100% wrong. I’m extremely Ben would make such a statement and hopeful he will take the time to do some research and correct what he has said.

    In the meantime anyone who has had their reservation cancelled in advance, including the person with original problem, would be well served to ignore what has been stated entirely. The correct information can be found with a Google search.

  20. @Steve
    Is the basic contractual agreement as you mentioned prevails when there’s a “fine print” in the contract whereby stating the hotel reserves the right to cancel at any time on its unilateral discretion?

    Maybe Lucky is referring to common practice, whereby an aircraft delay after a certain limit of time automatically grants the passenger a compensation? He is common people in regards to law.

  21. @Lucky —> On March 20, 2017, I made a reservation at a hotel in Las Vegas that was affiliated with one of the three major chains. It is a hotel at which I’ve stayed numerous times before; and the reservation was for THIS coming weekend (last weekend in August, 2017). On June 30th, I was contacted by email and told the following:

    “Thank you for booking a room reservation with __________ on 8/25/17 – 8/27/17. We are pleased that you have thought of us for your Las Vegas experience. However, we regret that we cannot accommodate your reservation due to a very rare incident in which the hotel was actual fully committed.”

    In other words, it took the hotel 108 days to discover there was no room at the inn?

    Of course the chain’s website still showed my reservation was valid . . . after several emails back and forth, it was “revealed” to me that, “At the time you booked the additional levels of security were not required. The attendees just booked that require an added level of security.”

    Curiouser and curiouser . . . meanwhile, I was rebooked into a comparable room at another of the chain’s Vegas properties, given a substantial discount below my original rate, and a slew of free points.

  22. I was walked once. I was booked at the Fairmont near Georgetown in Washington DC for a work trip. I had booked through my company’s travel portal (I work for a Fortune 50 company). When I went to check in, they had the manager come out from the back to talk to me, and I knew right away something was wrong. He explained they were overbooked, and he personally walked me to the Park Hyatt directly across the street and told me they had taken care of everything. They checked me into a massive suite, and it was by far a better hotel. The only hiccup was there was some confusion at checkout as to who was paying, but I prompted them to call the Fairmont, and it was all worked out for the rate I had originally booked at the Fairmont. The upside for the Fairmont is I appreciated the personal treatment and the upgrade. The downside for them is I now stay at the Park Hyatt when visiting DC.

  23. @James you bring up a very good point. I almost included this in my original post.

    The simple answer is it depends, but usually the hotel would not be able to enforce such a provision. There’s a number of legal theories why but let me give few in no particular order.

    First, there is a concept of unequal power. You didn’t negotiate a contract with the hotel, they unilaterally forced such a provision upon you. Courts take that into account. Second, there is the issue of notice. Did they tell you about the provision? Was it referenced when you made the booking? Could a reasonable person have known it existed? Third, the concept of a contract that can be repudiated in it’s entirety by one of the parties, especially the more powerful one, brings up a number of issue, including public interest (can a store advertise an item then when you come to purchase it repudiate the offer).

    It has been pretty well settled that a reservation is a binding contract. In general I’d say that while courts give considerable deference to agreements, particularly written agreements, between the parties, such a term would probably not be enforceable.

    I feel comfortable asserting that a hotel that refused to honor a reservation made in good faith would have a very difficult time avoiding a claim for damages except in extreme cases where the hotel could not have anticipated their inability to be unable to fully perform under their agreement. Think act of God and the like but not simply overbooking, a failure to finish the hotel or renovations on when they expected, mess up with the reservation system etc.

    @Jason Your situation brings up a very interesting point. Does a hotel have a specific duty to promptly notify a customer in a timely manner that they are going to be unable to perform under their contract? The answer is complex but I’d certainly make the claim that they do. It can’t hurt. Even if a judge disagrees there is a specific duty to make a timely notification if your cost to find alternate accommodations meant paying a higher rate then to the extent that the delay contributed to that additional cost a claim for damages that exceeded the rate you paid would be substantially stronger.

    Parties to a contract have a duty to fully perform. When they don’t the other party has a claim for the resulting harm. Generally courts are loath to give specific performance i.e. for the party being sued to do something and much prefer to order a monetary awards except in cases where money would be an insufficient remedy (like you have my antique car and I want it back). This is why the best course of action when time is available is to simply book a place that you believe is equivalent or if that isn’t available the least more expensive that is and then make a claim for damages.

    If this isn’t possible then cut the best deal you can, hopefully one that doesn’t ruin your trip and make a claim for what you feel is your loss was upon your return.

  24. @Steve
    Thanks a lot!!! Really appreciated your enlightment on that matter. However, cost of litigation between a corporation, hotel or chain surely different than individual. Unless the person is rich or a corporate booking. But I doubt hotel will try to screw a booking on corporate account without proper recourse and apology…

  25. Ignorant. Please do not spread #fakenews without doing an iota of research.

    In the U.S. consumer fraud is a matter of State law, with a few exceptions where the law is usurped by the Feds (e.g. aviation). Most States will protect you from hotels not honoring a reservation, which is why the practice is not widespread and hotels will never walk customers who put a fight (or pitch a tent!). Unlike the DoT, which doesn’t do much for consumers, States are pretty good at ensuring that citizens don’t get screwed over by businesses.

  26. @Tony
    Thanks for your input. Really appreciate it!!!

    In short, are you suggesting to counter bluff with stronger bluff (or in some cases don’t bluff but simply do – pitch a tent), and hotel will eventually yield?

  27. “Letting the hotel know if you plan on arriving late, since they’ll often walk people in the order they show up” is supposed to help? How so? Are you saying they will walk someone who arrived before you because you let them know you’d be late but the other person didn’t?

  28. James the cost to sue over a cancelled booking is nearly zero. You go to small claims court. Lawyers aren’t permitted to either side so you don’t have to hire one and the other side can’t. That means the person representing the hotel will be just some guy who is unlikely to even know what the issue is let alone be fully prepared.

    In most states the limit for small claims is more than $5,000 and often $10,000 so unless you have a really unusual situation all that is required for you to prevail is to explain that your reservation was cancelled, what your damages are and the paperwork to back each of these up.

    That and the minimal filing and fee for service (giving the complaint to the hotel) are the only costs. Often less than $50, frequently much less, rarely more than $100 and if you win you get your damages, plus your costs and often a bit extra just for winning.

    Forget about consumer protection laws and all that. Unless they give you extra rights in court, which you can discover with a quick Google search, just sue the guys instead of arguing with them. It’s faster, cheaper and far more satisfying to have a neutral third party, the judge, tell you your right and order the hotel to pay you.

    Best of all is when they don’t pay. Somebody sued an airline in Oregon and when they didn’t send a check he had a lien executed on one of their planes. The way that works is a sheriff shows up and slaps a piece of paper on the aircraft forbidding it from leaving the jurisdiction. That got their attention. They paid within an hour and the person got a good story to tell to boot.

    It’s even easier to put a lien on a hotel. That clouds the title so as a practical matter they can’t sell or refinance the building. All the time you are earning a great interest rate, often 12% or more on your award and after a few years you get interest on the accrued interest at the same rate. Pretty quickly a few hundred dollars can turn into thousands.

    So don’t believe what’s written in this post. It’s completely wrong. If a hotel refuses to honor a reservation in almost all circumstances you have a strong case for breach of contract and an easy and inexpensive way to turn that into an award that is going to get paid.

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