A “walking” scam: how hotels profit from overbooking

Are high hotel occupancy rates offering hotels yet another opportunity to secretly profit from you? Consider the practice of “walking” — transferring a guest to another property when the inn is full. Most reputable resorts “walk” their customers to a comparable hotel. But what if the second place costs less than the first, and the property simply pockets the rate difference?

That happens all the time in places like Cancun, Mexico. A hotel routinely accepts more reservations that it has rooms and then sends the overflow visitors to a second-rate motel, telling them they can take it or leave it. What’s more, it rarely offers to adjust the rate, instead giving disgruntled guests hotel vouchers or other forms of credit that are impossible to redeem.

You wouldn’t expect that to happen in the U.S., let alone in an upscale destination like Naples, Fla. But you’d be wrong.

Susan Weiler had such an experience when she reserved a room at a five-star hotel, and she believes it’s part of a larger scheme. She had prepaid $900 a night to stay at a well-known resort, but when she checked in, Weiler was told there was no room for her and that she’d be offered a room at another property.

Here’s an excerpt from her complaint to the first hotel — a letter that, by the way, the hotel has completely ignored:

When I arrived at [the second property] it was obvious that, although the staff was very nice, the hotel not nearly as nice as yours. Then, to add insult to injury, I learned that its rates were not more but indeed much less than yours — more than $150 less per night than I was paying. It became obvious that your hotel was in a position to profit almost $400.

She contacted her online travel agency, which scrambled to find a plausible explanation.

The lies kept piling up. [My agent] told me you had confirmed my reservation with them; you told me you never had a room available, but couldn’t contact me because my agent wouldn’t release my contact information. Then my agent told me that you claimed you had a room but that a guest decided to extend his stay.

Based on the smoothness with which she was processed by the first hotel, and her own experience as a concierge for an upscale resort, Weiler believes she isn’t the first person to whom this has happened. And she’s convinced that unless something is done, she won’t be the last.

No reputable hotel would ever seek to profit from a patron’s inconvenience. In the end, it took us over three hours of our very short vacation to sort out the details and make sure I would be refunded for my $900 reservation, and we still didn’t have a place to stay on a Sunday evening.

I believe Weiler’s story, although I’ve left the name of the hotel and the online agency out of this post because I think it could have happened anywhere. Hotel occupancy rates are near record levels, and this “walking” downgrade scheme is oh-so-tempting to any resort.

If you ever find yourself in a situation similar to Weiler, do a little research before accepting your walking papers. Make sure it’s really a comparable hotel instead of a downgrade. (Upgrades, of course, are fine — who’s going to complain about that?)

If you accept a downgrade, make sure your room rate is adjusted. And remember, your hotel is already paying the second hotel a deeply-discounted courtesy rate, so be sure to factor in the inconvenience of having to move to another property.

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at chris@elliott.org. Got a question or comment? You can post it on the new forum.

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  • Blackhawkhdown

    Who ever you are, If you were in front of me I would hugged u for what u said which is 100% correct, n If I could I would hired you at my property, cheers mate

  • cspears20

    I’ll be honest, I work front desk at a hotel in Minneapolis, MN. I had to walk a guest who was having her bachelorette party tonight. I felt absolutely terrible about it and I still feel terrible about it. In the situation, I had no choice. I had to send the girl to another hotel. I wish the practice of overbooking was not a reality. It’s terrible for the guest and for the person having to walk the guest.

    Just remember – don’t take it out on the front desk person. They are only the messenger. Take it out on corporate. They’re the ones enforcing the practice.

  • Jina

    Help me please!!!

    How can I explain to the agentcy about our hotel is overbooking now,then we can not accept the booking(inside allotment).

    Hotel Reservation

  • Sam Landry

    “…your hotel is already paying the second hotel a deeply-discounted courtesy rate…”

    This is not correct. I have worked the B-shift at a Comfort Suites for three years now, and never once have I nor my co-workers walked a guest to another hotel for a “deeply discounted rate.” We always ask them to bill our hotel for the first night of the guest’s stay at that hotel’s rack rate. Read this as: the guest we walked is getting one night free and we are incurring that hotel’s baseline price. This is common practice, and has been such since long before I ever wedged my way into the industry. Get your facts straight, author, please, for the sake of the people whose opinions you’re helping create.

    Also, as a note to Susan Weiler, should she ever come around again to read this: it is because you made your reservations through Expedia (or any other third-party booking agency) that you were a candidate for walking. Because these booking agencies take a large cut of the profit as a so-called “finder’s fee,” these reservations are first on the chopping block for hotel managers and owners. In fact, the first thing I ever hear in an overbooking situation is “do we have any internet reservations?” Never mind that you pre-paid. You paid Expedia, and Expedia only pays us a percentage of that when you complete your stay and check out. That’s the nature of the beast.

    I do hope things go well for you in the future, Miss Weiler, and I hope this has shed some light on the matter for you. Also, I hope I’m not talking to air by now, seeing as this is an article from 2008.

  • http://www.facebook.com/maiken.maemets Maiken Mäemets

    Hello everyone,

    My name is Maiken and I am a BBA-student from Finland. I am currently writing my thesis I would need your kind help in this. My thesis-topic is the turnaway-procedure in hotels, so exactly the topic discussed here. 

    If you have experienced a situation where you have a reservation to a hotel, but instead you’ve been relocated to another hotel, you’re the right person to ask for some feedback. Hopefully you’ll be able to take 5-10 minutes of your busy schedule and fill in a short anonymous questionnaire, which you’ll find here: https://elomake.metropolia.fi/lomakkeet/5756/lomake.html

    As a thank you for your contribution, there will be a lottery between all the participants. I will give out 4 x $10 -gift certificates to Starbucks! Coffee’s on me, people! :D

    I wholeheartedly thank you for your contribution and will be happy to answer any questions you might have!

    Cheers, Maiken

  • Kevin Lyle

    Chicago Hotelier, I think that “walking” is a scam.  It also strikes me as a very hectic and inefficient way to do business, and the trouble taken to guarantee the sale of the very last room each night may very well not be worth the money that it brings in when the business strategy involves breaching contracts with travelers.

    Your establishment needs to require some up-front commitment (i.e. a deposit) from guests who want to schedule a room for an upcoming night. 

    If you have and enforce a deadline to cancel and receive a refund, you will be mitigating the problem of balancing cancellations with scheduled arrivals to achieve full occupancy.  And that is the only honest way to operate.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

     I must respectfully disagree.  A scam necessitates a loss and a victim.  The current system allows  guest to make and cancel rooms as their needs change.  Walking is a very rare occurrence and when it does, the traveler is generally given the first night free, not a bad deal for most guests.  Not sure where the victim is who got a free night.

    The alternative is that you would have to place a deposit down every time you made a hotel reservation, or hotels would have to charge more to account for the inefficiency of not selling the last room.

    As a guest, I find the system to be perfectly adequate and honest.