Some Italian Hotels Won’t Refund Refundable Deposits

We’ve seen airlines play all kinds of games with refunding customers, given the cash bind they’re in. There are plenty of hotels doing the same.

I feel bad for hotels during this time

Before I get into the crux of this story, let me note that I feel so bad for the entire tourism sector, and in particular small businesses in the industry, including hotels that are either independent or run as franchises.

This entire situation has destroyed their businesses for the time being, and a lot of them are unable to cover their costs, including laying off employees, and/or not being able to pay them.

While I have issues with multi-billion dollar airlines violating federal regulations to deny refunds, I’m generally more sympathetic to the issues that small businesses face. That’s not to say that I support them violating federal regulations or screwing customers, but I realize they often don’t have the safety net or access to funds that publicly traded companies may have.

Italian hotels refusing to refund stays

Many independent luxury hotels require a deposit in advance, which is often refundable. Presumably it’s primarily to make sure people are “serious” about their stay, rather than just booking something speculatively and sitting on inventory.

I’ve been forwarded communication from a luxury independent hotel in Italy where someone booked a 1,700+ EUR per night stay, with the following cancellation policy:

  • A 50% deposit was required at the time of booking
  • Free cancellation is allowed until 90 days prior to arrival, including a refund of the deposit

The guest wanted to cancel this stay more than 90 days in advance (as he is entitled to, per the terms), and how did that go?

First the hotel responded offering a credit towards a future stay, or alternatively offering a refund of the deposit “by the end of July 2020” at the latest:

“As you know, all the sector is facing a big crisis and this is why, as the first option, we offer the Clients that are cancelling their reservation, the possibility to hold the deposit paid as a credit for a future reservation from May 2021.

If, instead, the Clients prefer to be refunded, the amount could be refunded at latest by the end of July 2020.”

After pushing back, the offer for a refund was essentially rescinded altogether, and the client was informed that a future credit would be the only option, though they’d allow the guest to use it within 24 months (rather than a year):

“We are perfectly aware of our agreement in which we assured a full refund of the deposit paid, but in light of the events that are currently impacting our country and the restrictive measures put in place by the Government, we are not able to proceed with any form of cash reimbursement.

As per the government decree on the coronavirus emergency – more specifically, in accordance with the provisions of article 88 of law decree no. 18/2020 and article 28 of law decree no. 9/2020 – we are asked to make a refund in the form of a voucher for the same value of the service that you paid, valid for 12 months.

As we also understand your situation, we have decided to extend the validity of the voucher to two years in order for you to be able to re-organize your trip in the easiest and convenient way, offering also the possibility to transfer the voucher to another person, if that is your wish.

Our commitment is to protect the value of your money and this is the only way we have to do that, remaining loyal to one of the pillars of our establishment: being trustworthy, as we have always been.

We are all in this together and we believe that we will get out of this situation stronger than ever!”

My thoughts and questions on this situation

I have some thoughts and some questions. First of all, I’m not here to name and shame the hotel, because I recognize the struggles hotels are going through. I imagine this hotel isn’t alone in having a policy like this.

Obviously I sympathize with hotels at this time, but it would seem to me like refusing to refund a refundable deposit outside of the cancellation period is a breach of contract, plain and simple, regardless of the financial circumstances.

It’s one thing to refuse to offer a credit (or refund) for a booking that’s within the cancellation deadline during this time, but this is a stay that was cancelled prior to the deadline.

And that brings me to me question? Is there really some Italian law saying they can’t refund people? I searched the articles referenced, and maybe it’s a translation issue or something, but I’m not seeing how they would apply in this particular case.

Is there actually an Italian law saying hotels can’t refund deposits that are supposed to be refundable, or is this hotel counting on people to simply believe that?

What do you make of this situation?

Conversations (76)
The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.
Comment as a member

Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.

Type your response here.

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Anyone can comment, and your email address will not be published. Register to save your unique username and earn special OMAAT reputation perks!

  1. Loading comments…
Recent Comments
The latest from the OMAAT community.

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

V J Daniels Guest

dannyd 09/08/2020 hotel Crowne plaza Rome I booked a room at the above hotel in February for September, ie long before the new laws were implemented. I am unable to go to Rome as BA have cancelled my flights. I feel that the hotel should reimburse me, as per the terms valid in Feb.

0
‼ 0
Chris Guest

@RW (or anyone else with thoughts on this): I had the same exact situation with Marriott's Domes of Elounda hotel in Crete, Greece. Even though I cancelled several weeks before this Greek law went into effect, they delayed on refunding my deposit and are now saying all I get is a voucher-- despite the fact that my reservation was cancellable (and the hotel ended up being closed down during my proposed stay in May). I called Marriott-US and they will do nothing to stand behind me as a customer- they just point to the Greek law and refuse to give a refund (even though I think the Greek law only permits but does not require a voucher). Shame on Marriott! I've filed a charge back through credit card but still in process as hotel appears to be fighting it. Would I have a better chance of success by bringing this to Twitter or other avenues of recourse?

0
‼ 0
RW Guest

I am having the same problem with Domes of Elounder in Crete, Greece. I cancelled a month ago and had rights to a full refund of my EUR 4,500 deposit if cancelled by July 4th. I’ve filed claims with Marriot and charge card company. Being told the Greece passed a law, long after my reservation was booked, that now allows hotels to hold refunds for 18 months. Our lives have been immensely impacted by Covit. Marriot should not allow this to happen. There will be a class action law suit and customer loyalty and trust forever damaged. Btw, they are taking new reservations. I don’t see how anyone can trust them to honor the terms of any reservation.

0
‼ 0
LucaM Guest

My fiance and I booked a venue in Ravello - the wedding was supposed to happen on June 3rd. Obviously, we cannot go..the venue itself VILLA EVA in Ravello would be closed. Yet, they refuse to refund our initial deposit of 5,000 EUROS saying it is not Refundable(they asked for a direct wire to guarantee the date). This is so crazy to me because this business has incurred zero costs for this wedding reservation, yet they do not feel they need to return the money even though the venue is closed on our scheduled wedding date. If anyone has any ideas how to fight this with the venue, please let me know.

0
‼ 0
Kathryn Guest

Hilton Airport Hotel Rome. Funny how it's the big international chains that are refusing to refund and are spouting the Article 18 answer. Mine even threatened me that they could give me a voucher whether I agreed to it or not. Still fighting.

0
‼ 0

Save posts to read later

Saving posts is a member feature. Become an OMAAT member to build a reading list you can come back to from any device.

Become a member
Meet Ben Schlappig, OMAAT Founder
5,883,136 Miles Traveled

43,914,800 Words Written

47,187 Posts Published