Weekend survey: When should a hotel refund a nonrefundable room?

When I say this is a hot topic, I’m not kidding. I had to shut down the comments on this post earlier today because people just couldn’t get along. But here’s your chance to sound off in a more civilized forum: A weekend poll.

More hotels are offering nonrefundable rooms. And more guests are booking them (often without knowing it).

When should a hotel bend its nonrefundability rules? I asked you about airlines last week. But hotels have their own unique set of circumstances.

Here are the results.

  • Ron Seidel

    Hotels should be lenient if they want repeat business from their customers

  • Stoyko

    Wanted to make a comment on the post that was locked and would like to take the chance to do it here.

    Small business owners may not be big-chain corporations, but precisely because of that they could show more flexibility with non-refundable rooms for customers that have legitimate reasons for not making it. For example, they know when business is slower and can offer these customers to rebook for such a period. This is not a full refund, it’s not an open reservation, but something that will cost the business owner very little to accommodate. Also, I don’t agree that a refund for a no-show is always a loss for them. If they are fully booked, it certainly is, but if they have other rooms available for that date, it equally certainly isn’t.

  • SirWired

    I don’t think bad weather should get you out of your hotel room, unless the bad weather is on top of the hotel. Certainly, if the hotel is snowed in and you can’t get there, yes, a refund is appropriate. But if you are snowed in, and you can’t get to your Hotel in sunny Florida, tough luck.

  • Chris in NC

    @ Chris Elliott,

    There are really 2 distinctly different scenarios with regards to non-refundable hotel rooms
    A) With specialty lodging in resort areas, hotels often require deposits in advance with stiff cancellation policies (often a guest needs to give 7, 14, 30 days or long notice)
    B) Hotels that offer special “non-refundable, no-changeable” rates that offer a discount compared to regular rates

    With regards to scenario A, while I don’t like the strict cancellation policy, I can understand the reasons. In my opinion, if booking at these “resorts” travel insurance is a viable option.

    With regards to scenario B, I think these rates are a TERRIBLE idea for travellers. Its a very different scenario from airplane fares when a non-refundable ticket costs $198 and a refundable ticket costs $1378. Often the savings are around 10%, though sometimes you can find better bargains. In the event of someone wanting a refund of these rates, I have NO sympathy towards the traveller.

  • Teresa

    In some countries (for example Germany) tiered cancellation policies are the norm at hotels, where you can get 100% back up to a certain point, then 75%, 50%, 25%, 0% (the step levels can vary). This seems to me a more accurate reflection of hotels’ loss due to a cancelled reservation than the cancellation policies that are typical in North America. It accurately reflects the likelihood that a hotel can resell a room.

    I wouldn’t book at a hotel like the one in the post about Provincetown which had an iron curtain policy — 100% refund up to 21 days out, then 0%. The curtain should close more slowly than that.

    Acts of God that make the hotel inaccessible are a tricky thing, and the survey question didn’t make fine enough distinctions. Some of them (like floods) make it impossible for the hotel to provide a room, and then the hotel should offer a full refund. In other cases hotels and customers should probably share the risk and in some cases the customer may not be trying hard enough to reach the hotel.

    It’s interesting to compare how hotels deal with individuals versus how they deal with group bookings.

    The trend towards nonrefundable rooms is unfortunate if it means the end of the tradition of reasonably priced cancellable rooms. Guests are the people least able to manage the risk of circumstances that make a stay impossible. Travel insurance is a hassle — time consuming and with lots of uncertainties in the fine print. Hotels always have the option of reselling a room so a system where they charge for bearing at least some of the risk of a cancellation makes better sense. Fortunately the hotels which have a nonrefundable option tend to price it only a little lower than the refundable rates.

  • Joe Farrell

    This one is easy – if they were absolutely CLEAR on the policy – AND unable to rent the room – then its non-refundable. Its a business deal.

    I think that absent local emergency [hurricane warnings, states of emergency, etc where people are actively discouraged from travel to the area] a non-refundable deal is a non-refundable deal.

    Now, when a person presents an emergency such a death or serious illness of a immediately family member- that property should verify the death or illness – and then offer a credit for a future stay. This way its non-refundable – the business gets the needed cashflow – and the customer then decides if they can make it – the offer of new lodgings needs to be within 180 days so its not out there forever – and its really a situation of a delayed and intended trip – not just a means to get a refund.

    With a small hotel – I’d run into situations like this before in a resort area. If I am denied a refund – I ALWAYS call the night I had the room to see if I could book a room. Amazingly, these small boutique places fill up weekend after weekend and holiday after holiday, So – if the place is full – I then speak to the manager if they are there- or leave a message. The point of the no-refunds is to protect them – but if they re-sell the room – sorry – they can’t double dip.

  • Amy

    I agree with Joe. I was expecting to see “When they can re-sell the room” as a poll option.

  • Alan

    “For example, they know when business is slower and can offer these customers to rebook for such a period. This is not a full refund, it’s not an open reservation, but something that will cost the business owner very little to accommodate. ”

    This is an important point. The woman in today’s Cape Cod example was asking for a change in her reservation week due a death in the family, not a refund. The hotel manager, in responding with a whine about the long slack months in his out-of-the-way location, totally missed the point: he has a vacated week in the busy season, which at that time of year could still possibly be re-rented, especially if he took the trouble to maintain a waitlist. Most importantly, he isn’t losing a dime: the reservation-changer wants to be back, at the original rate, at one of those later weeks in the slow season.

    For its record of high-handedness and insensitivity to the customer, the travel industry richly deserves the sort of walloping that real estate is getting now. Let consumers stay at home for the next two or three years so that we may be treated to the sight of Mr. Heartless Bastard homeless in the streets of Boston, with his inn taken over by people who attach some importance to the people who soul like to vacation there.

  • Steve

    I totally agree with Joe Farrell and Amy; I think whether or not the hotel is able to resell the room is hugely relevant.

    Assuming that the hotel cannot resell the room and would lose money by giving a refund, I chose only the last option in the survey – when the hotel cannot operate safely. If a hurricane/flood/blizzard/whatever means that the hotel can’t operate or you physically cannot make it to the hotel, you deserve a refund. (As SirWired said, though, if the disaster means you can’t make it but the hotel is operating as normal, tough luck).

    I think in all cases, nonrefundable reservations (for hotels, plane tickets, whatever) should be required by law to be refunded *if* the business resells the reservation and thus does not take a loss because you cancelled.

  • Sarah Di

    On the one hand, I’ve cancelled hotels within a cancellation period and not been charged because they were full and could resell the room for that night. Due to the unique circumstances, they also allowed me to wait to cancel the second night until the next day without penalty. We were able to take the room for the next night however. I would have completely understood if they’d said no and I was grateful that they were able to work with me. The hotel was able to sell the room for the first night and neither party was out anything. While hotels shouldn’t profit off of this, they also shouldn’t have to lose anything.

    On the other hand, if you understand the terms and agree to them, it’s your responsibility to abide by them. There are going to be exceptions. The major one that I can see is if travel is not recommended to hotel’s area. If I physically can’t get there because the area is shut down, it’s one thing. If I just decide that I don’t want to drive in the rain, that’s a different story.

  • behindbj

    A waitlist? Really – a waitlist? For an out-of-the-way, off-the-beaten-path location? While it is nice that you can apparently not plan ahead for vacations and go off at the last minute, some of us like to plan ahead and know that we have a room somewhere. A waitlist could be useful if the person cancelled months ahead of time, but that wasn’t the case in the previous entry about this issue.

    About that last entry: It was controversial? Heated? So bad it had to be closed? Odd – I thought it was pretty tame. No one even got close to the level of snot displayed by Alan above – for either side. I thought it was a reasonable discussion. It certainly wasn’t as bad as the entry regarding not allowing children in diapers into a pool. It’s your blog and you can do whatever you want, but that kind of puzzled me. Just sayin’.

    And, quite frankly, in all of the travel I have accomplished, I have never felt “heavy-handedness” or heartless customer service to any degree, let alone a degree that colors entire industries. Perhaps I’ve been lucky and my problems were resolved reasonably (if a bit awkwardly and over a bit of a period of time, on occasion or by way of travel insurance, credit card disputes or chain elevation), or maybe I don’t approach entire industries ready for a fight.

  • sam

    I am amazed that you are even asking this question…
    Yet, I understand the consumer advocate position.

    My issue…What Part of the wording “Non-Refundable” in a Hotel, Airline Ticket, Package Land and Air, Cruise, Car Rental is not understood.
    Non-Refundable as I am aware of means NO REFUNDS of funds and or monies that have been approved and forwarded to by the consumer to the “supplier”.

    In regards to “some” selected “Hotel” pricing, many hotel properties offer a section of pricing levels from rooms that are sold under “non-refundable” to 72hours or 6 PM day of arrival cancellation.

    Should the purchaser choose a room price that is “non refundable over a room that can be canceled with no penalties up to 6 PM day of arrival, that is the personal choice.

    The person can still take trip insurance to cover most possibilities should they need to cancel with one of the many travel insurance firms such as Travel Ex:
    ……….”PASSENGER PROTECTION PLAN GENERAL DEFINITIONS
    Accident: means a sudden, unexpected, unusual,
    specifi c event that occurs at an identifi able time and
    place, but shall also include exposure resulting from a
    mishap to a conveyance in which You are traveling.
    Accidental Injury: means Bodily Injury caused by
    an Accident (of external origin) being the direct and
    independent cause in the Loss.

    Family Member: means Your or Your Traveling
    Companion’s legal or common law spouse, ex-spouse,
    Domestic Partner, parent, legal guardian, step-parent,
    grandparent, parents-in-law, grandchild, natural or
    adopted child, step-child, children-in-law, brother, sister,
    step-brother, step-sister, brother-in-law, sister-in-law,
    aunt, uncle, niece or nephew, or Business Partner who
    reside in the United States, Canada or Mexico……..”

  • sam

    I see you closed the P-Town B & B “Luxury Cancellation issue”

    1- Granted Luxury is a matter of personal definition, but this Property I would put as a “high end” B & B Property.
    It is not a Virtuoso, Leading Hotel, Relaix and Chateau, and or Preferred Properties, where several of those properties can come in at $3,500.00 per nite.

    2- Considering as of today ALL AIRLINE TICKETS that are issued must contain the EXACT Spelling of each and everyone’s name (per the TSA Rules), I wonder “how many people” will state, I did not know of such rules when they are denied boarding of an aircraft…OR…delayed.

    Such as you name: Christopher…..you can no longer make an airline reservation under “Chris”. If you do so you could be denied boarding the aircraft.

    Who’s fault will that be listed under ?

  • Crazy Kat

    None of these should be nonrefundable. This whole nonrefundable craze is so annoying. I place it right up there with the fee frenzy.

    Part of the business model is no-shows (who should get charged). People with changes of plan, however innocuous, who then notify the property appropriately (say, more than 72 hours ahead of time) should not get charged. Figure out how to cover your costs with your average occupancy! It isn’t rocket science, folks. Ditto to airlines and other such intractably poor customer service entities.

  • Steve

    @sam: “My issue…What Part of the wording “Non-Refundable” in a Hotel, Airline Ticket, Package Land and Air, Cruise, Car Rental is not understood.” In general, I don’t disagree with you, but would you say that if the hotel/airline resells the room/seat and thus does not take a financial loss for the cancellation, then the customer should get a refund even if they booked a nonrefundable rate?

    Personally, I don’t see how anything else could be reasonable. If a cancellation means the hotel can’t resell the room or the airline can’t resell the seat, then I’m in total agreement that nonrefundable means nonrefundable except in rare and extreme circumstances (such as not being able to get to the hotel because a hurricane is hitting the area and police will not permit you to drive there). If, however, the room or seat is resold, I think the original customer deserves a refund.

  • Sara

    I think that if the property has failed – if they can’t operate safely or can’t provide what was properly reserved and such, then I definately think a full refund is in order.

    For other situations – personal ‘verfied’ emergencies, or Mother Nature playing tricks, it would be better on a case by case basis. Not full refunds, unless maybe as someone pointed out that it would be impossible to arrive to the business location – but even then it may be possible to work something out; arrive late and full or partial refund of other hotel stay, or other such extreme situations.
    But when situations are out of the hands of either party – death, hospital emergencies, weather delays, broken connection etc – credits issued for future stay / travel, partial refunds, partial credit etc (with clear valid to date!), would work well to keep future business coming, keep good customer relations (more customers, and not lose customers) etc.

    When any such credits or refunds have been paid, why not even send out an e-mail to the customer and politely ask if they would mind giving a review of their customer relation experience on [website address]? After a satisfactory resolution, some would likely be posting good reviews if told how (linked website such as tripadvisor), and so further helping the business in the long run.

  • Lisa

    so what stops me booking a cancellable room, then once i know 24hrs before its pretty certain the trip is on, cancelling the refundable room, and then rebooking the room at a pre-paid rate?