Can Hotels Cancel Confirmed Reservations?

A reader emailed to ask what he’s entitled to when he had a confirmed reservation at a new hotel, but it didn’t open in time. It’s an interesting question, and one that I figured was worth addressing on a broader level, since there are several reasons you may not get the hotel room you paid for.

What can cause a hotel to cancel your reservation?

You probably assume that if you have a confirmed reservation at a hotel 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 (which happens constantly)
• Much like with airlines, hotels may overbook, and there are situations where their projections don’t work out in their favor, and where they actually have to “walk” people
• A hotel may decide they no longer wish to honor your reservation after selling you a 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 certainly some other niche situations as well that could cause a reservation to be canceled. For example, some hotels in China don’t accommodate foreign guests, while other hotels may refuse reservations made by locals. However, these are the exceptions rather than the norms.

Are there laws regulating hotels not honoring reservations?

When flights are oversold, the Department of Transportation (DOT) 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 United States government organization that regulates hotels not honoring reservations in the same way.

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

When there aren’t laws explicitly regulating this kind of stuff, this just comes down to a contract dispute, meaning the only legal recourse you have is small claims court. However, realistically speaking that’s something a vast majority of us would never pursue, since it’s probably not worth the effort.

Unsurprisingly, the terms you agree to when booking a hotel are generally pretty one-sided. They talk about the penalties that apply to guests should they cancel outside the acceptable window, but say little about the obligation of hotels.

What happens if a hotel “walks” you?

Major hotel chains have 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; furthermore, many hotel “preferred partner” programs have no-walk policies
• 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 other words, if you’re only planning on arriving at 1AM, let the hotel know).

For example, Marriott publishes guidelines for this, called the “Ultimate Reservation Guarantee.” It’s available to all elite members, and clearly outlines the compensation guests can expect if a hotel walks them. I appreciate how publicly transparent Marriott makes this, while most other hotel chains only have internal (unpublished) policies.

With Marriott’s policy, you can expect to be accommodated at a nearby hotel, and compensation could vary from $100 on the low end, to $200 plus 140,000 Bonvoy points on the high end, depending on your status and the brand.

IHG has a guarantee that promises to provide you with a room and transportation to “another convenient and comparable hotel,” and the property will pay for the full cost of the first night’s lodging.

While the policy will differ by hotel, you should generally expect to be accommodated at a comparable hotel, and to get some sort of compensation beyond that. Just keep in mind that like with so many things in the travel space, you’ll likely have to advocate for yourself.

If you’re not happy with the resolution, ask for the manager on duty or general manager. And if the property isn’t able to help and you’re staying with a major global hotel group, contact corporate customer service. Lastly, you always have the avenue of a credit card dispute if you’re not getting what you paid for.

What happens if your hotel reservation is canceled in advance?

For most hotel chains, internal guidelines about not honoring reservations are specific to walking guests. In other words, it only applies if the hotel walks you on the day of arrival, and not if your reservation is canceled on you in advance.

What happens if your reservation is canceled in advance, either because a new hotel doesn’t open on time, because a hotel decides not to honor your rate due to a major event in town, or because the hotel maybe closes due to a buy-out?

This situation is a bit trickier than being walked, since this is very much a negotiation process. Most hotel groups don’t have published policies surrounding this that hotels have to abide by, so unless you pursue the small claims court route (which most of us wouldn’t do), it’s just a function of being persistent and clear about your expectations.

Generally speaking:

• At a minimum you should expect lodging at a comparable property over the same dates
• If the replacement hotel isn’t better, personally I’d also push for some compensation beyond that, since presumably you selected a hotel for a reason; this could include bonus points, a hotel credit, etc.
• Perhaps otherwise you may be happy with a future hotel stay, in which case I’d expect at least one or two nights to be complimentary, or the rate to be reduced

In general you should expect to have more leverage in a situation where the hotel agrees to a buy-out, rather than a situation where a hotel’s opening is delayed. If you are going to book a hotel pre-opening, keep in mind that hotels are notorious for opening later than expected, so this is really common.

Meanwhile a buy-out is being done because the hotel is trying to maximize profits at the expense of guests with confirmed reservations, so confirmed guests should be treated accordingly.

Lastly, if a hotel decides to cancel your reservation simply because they think they can now charge more, that’s totally unacceptable. That’s the point at which I’d reach out to corporate customer service immediately, or even the local news.

Bottom line

It can be frustrating when you confirm a hotel reservation in advance, only to have the hotel cancel it on you closer to your arrival. This can happen for a variety of reasons, and the lack of consumer protections generally in place can leave consumers without much leverage (aside from going to small claims court, which most people won’t do).

You can expect that major hotel groups will have policies in place for walking guests, which are generally pretty fair. However, at times you may be stuck advocating for yourself in order to have these policies honored.

What’s much trickier is when hotel stays are canceled on you in advance. I’d expect the hotel to go the extra mile in the event that they have a buy-out that causes a cancelation, while unfortunately with delayed openings many hotels aren’t particularly generous.

Just keep in mind that this is typically a negotiation, so persistence pays off if you feel that a hotel’s resolution isn’t fair.

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