Say that you arrive at a hotel where you have a firm reservation — maybe even prepaid — only to have the desk clerk tell you the hotel is full and can't honor your reservation. This can happen for several reasons, generally because the hotel overbooked, some guests stayed longer than expected, or somebody bought out the whole hotel for an event. Something has to give: A hotel can’t quickly build another room for you to occupy, and it can't throw a current guest out. The "why" doesn't matter; the hotel is simply unable to honor your reservation. What you need to know is how the hotel plans to fix the problem and what rights you have if it doesn't find an acceptable fix.
As far as I can tell, at least in most of the country, you have no specific right, as you do with an overbooked airline flight. Normal industry practice is to try to fix the problem:
If a hotel has rooms but in a different price or location category than specified in your reservation, normal practice is to upgrade you to a bigger/better room, where available or to book you in a lesser room for one night and adjust the price.
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If a hotel is totally full, normal practice is to “walk” you to another hotel of “equal or better” quality and pick up the cost of your first night there plus the cost of getting you there.
What to do if you're faced with a reservation but no room? As with most such situations, if the hotel offers you an acceptable fix, take it if it’s at all reasonable. If the offer isn't great, ask for some extra compensation. Even when a proposed fix is a disappointment, shrug it off, just say "kismet," and go to dinner or bed rather than hassle into the wee hours.
If the offered fix is unacceptable, your options are meager. You can't even demand to be walked. Some folks — even those who should know better — seem to believe that walking is an enforceable legal requirement. But I've not been able to locate any such specific laws or regulations, nor have I seen any hotel contracts that require it: Walking is just industry practice, honored sometimes but not always. And even when offered, "walking,” may not, in the words of tort law, “make you whole.” Every time I’ve been walked, the substitute hotel was not “equal or better” than the original. And I’ve heard from readers of cases where a downtown hotel offered a substitute room in a remote suburban location.
Yes, your reservation is a contract, which the hotel is unable to fill. You could sue for damages, in small claims or regular court. But a lawsuit next month doesn’t solve the problem of a room tonight. My suggestions:
-- Don’t accept a really inadequate fix. If the first offer is unacceptable, start by negotiating for something better. If the clerk or agent says, “take it or leave it,” ask for a manager.
-- If you can, get on your phone, find your own alternative, then ask the hotel to arrange it.
-- In the worst case, pay for your own alternative, figuring on filing a formal complaint – and maybe a small claims court suit – after you get home.
Car rental companies, too, often can’t honor a reservation. And, again, there is no legal recourse. Industry practice is supposedly (1) to upgrade you to a more expensive category of car – although you might not appreciate getting a gas guzzler instead of the economy model you want – or (2) to arrange a rental from another company and pay any rate difference. But in my experiences, rental companies often try to stall and ask you to wait around the office for a “short time” until customers return cars
With both hotels and car rentals, you’re fundamentally in the right, in contract law, and should prevail in a formal legal action. But you also need a room or car now, not a verdict in six months. You have to set the balance.