When a hotel goes out of business, what happens to your vacation?

By | January 6th, 2009

Here’s a problem many travelers are likely to face in 2009: a hotel that closes its doors because of the lackluster economy, taking your vacation with it. But it doesn’t have to end badly, the way it did for Michele Greer.

Greer had booked a vacation package at the Meridian Hotel in Las Vegas back in June through Travelocity. At least that’s what she though.

On Dec. 22, four days before we were to go, I found out that our hotel had not been operational as a hotel since July. The Meridian Hotel was still listed on my Travelocity itinerary.

This afternoon, after a week of phone calls and emails, Travelocity offered a full credit in an email for the trip. The charges are still in dispute, until credited, with my bankcard.

We were very disappointed to have our holiday plans canceled. We were fortunate that we we didn’t go to Vegas and find ourselves in front of a closed hotel. This shouldn’t happen to anyone.

No, it shouldn’t. I asked Travelocity about the case. Here’s its response:

Our records show that we did phone and leave a message with the Greers last summer when the hotel went offline. Still, we recognize that we should have gone to greater lengths to make sure that they were aware of what was happening.

The refund is in process and we will also send the Greers a promotional code that they can use on a future trip. We’re, of course, sorry about this and hope we can take steps to win their confidence back.

That’s a nice gesture, but could Greer have taken any steps to make sure her Vegas vacation wouldn’t be ruined?

Actually, yes.

At a time like this, when the likelihood of a hotel bankruptcy is far greater than at any time in recent history, you can take some common-sense precautions.

First, phone the hotel immediately after your reservation, no matter how you booked it. Verify your confirmation number. If you want to be extra-careful, set up a Google Alert for your hotel. It will tell you when something changes with the property.

Finally, call the hotel directly at least a week before your arrival — just to be sure.

Greer was lucky. She bought a package through Travelocity, and she had also purchased insurance. Her entire trip was protected. This underscores the value not only of travel insurance, but also of buying a package through a travel agency or tour operator.