Why is my hotel dragging its feet on a refund?

Question: I recently booked a room at Hotel H2o in Manila through Hotels.com. I had to cancel my stay just before my trip, but I was incorrectly charged a one-night penalty.

Despite months of back-and-forth with Hotels.com, I haven’t received a refund yet. They said they had to call the hotel. Perhaps that was their strategy, to wear me down.

Do you think you can help me get my money back from these folks? — Anthony Braxton, San Francisco

Answer: If you canceled your room 24 hours before your arrival, then you shouldn’t have been charged the one-night penalty.

But did you? A look at your electronic correspondence with Hotels.com suggests that although the online travel agency received and acknowledged your cancellation a full day before your scheduled arrival, the time difference between you and the Philippines means the hotel received the cancellation less than the required 24 hours before you were supposed to check in.

Here’s where you have to go back to the fine print. The terms of your reservation say it’s not the hotel’s time zone or your time zone that matters. Cancellations made after 12 a.m. Eastern Standard Time are subject to a one-night room and tax penalty, according to the terms.

And you made that deadline.

The second issue troubles me a little more. Hotels.com says it can’t refund the penalty until it hears back from the hotel. I don’t buy that. Did it need written permission from the hotel to sell you the room? No, it didn’t. Securing a refund should be as quick and effortless as debiting your credit card.

You were subjected to a ridiculously lengthy wait for a refund. You canceled your room in early July and asked for a refund and contacted me in late February. If I didn’t know any better, I would agree that they were trying to wear you down.

In this situation, a credit card dispute might help. I say “might” because the law limits the types of disputes that must be processed, both in terms of time and geographic proximity. Questioning a charge on an overseas hotel booked almost a year ago would require a first-rate bank or credit union that stands behind its customers.

Another option is small claims court, but given the size of your refund — just $70 — it is probably impractical. I think a final, strongly-worded email to Hotels.com might have nudged the company in the right direction. Or from me.

I contacted Hotels.com on your behalf. The company promptly refunded your $70 penalty.

(Photo: K Trovas/Flickr)

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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  • sirwired

    It sounds like that Hotels.com needs to fix their contract; they need to match their cancellation penalty up with that of the Hotel.

    Why would an agent ever set the cancellation penalties in their own timezone?  The mind boggles.

  • Nikki

    I voted yes on this, being on the other side of that front desk.

    When a reservation is made via a third party, hotels receive all the information, and a company credit card to charge it to.  We (the hotel clerks, etc) are directed to charge only room and tax to that card, and not to ask the guest for a charge card at check-in unless the property requires it for incidentals. 

    When a guest has an issue such as this one, the third party agency/company cancels immediately, and forwards that information over to the property.  We cancel it accordingly.  If the guest is cancelling within the cancellation period (say, calling at 6:15pm day of arrival when the hotel cancel policy is 6PM), the 3rd party company calls the property in question to find out if we will charge them the penalty.  Most of the hotels I’ve worked in were pretty relaxed about this policy – and there are the few that aren’t.  All we do is let Expedia/Priceline/etc know whether or not it’s being charged, and that’s the end of that with us.

    Time differences? Psh, I call BS on that. It’s the time zone of the COMPANY that handled the reservation, not the hotel. (Edit: I think I wrote that wrong, please forgive me. Either way it goes, Hotels.com knew what they were doing and knew it was wrong, especially since the cxl was done on time.)

    Forgive me, I’m a little jaded after working for a guy that lost his hotel in foreclosure, closed without notice to anyone, then charged everyone that had a reservation in his place and never refunded anyone (including all 3rd party reservations). I had to get Chris’ advice on that some years ago when it happened, for a guest that was dealing with something almost similar.

    *mumbles* frickin people…

  • http://twitter.com/ExtendOurStay ExtendOurStay

    What an interesting situation.  Maybe try
    the BBB online to file a case. Many times on the BBB Company’s account, it will
    list the name of the Manager who handles complaints.  You can then use it
    to call that person directly.  We suggest to our customers to pay with an
    American Express card as they have a tough dispute process for companies that
    owe refunds.




  • Chasmosaur

    I know there are issues like this that complicate things.  But maybe you can explain how often this happens.

    Last year, my husband and I booked a hotel stay with rewards points at one of Marriott’s nicer hotels (he travels for business and I go with him regularly – we are very used to hotel stays and hotel logistics), through Marriott.com. We had to cancel late because of illness, and that was 72 hours ahead of time.  We canceled through Marriott.com – as we had booked – and after receiving our confirmation of the cancellation, simply regretted our lost vacation and thought things were taken care of.

    The following month there was a charge on my husband’s card from the hotel for several hundred dollars.  We went back and forth between the property itself and Marriott for three days, both of whom were telling us we had to contact the other to resolve the problem. Eventually it shook out that it was, indeed, the property’s charge, so we needed to talk to them.  Except they wouldn’t talk to us.  We left multiple polite messages with the in-house accounting office and never received a phone call or e-mail in return.  (And yes, the phone calls were during the hours the voice mail stated were their hours of operation – it wasn’t like I was calling at O-Dark-30 or during regular lunch hours.)

    I only got resolution when I refused to get off the phone with the property – I used my family’s polite response of “I’m sorry, that’s not acceptable”, when the front desk tried to transfer me to the accounting office for the fifth time in two weeks, especially as he told me the person wasn’t available and I would have to leave yet another message.  I was starting to smell a rat.

    When I asked to speak to a manager, it turned out I actually had one on the phone.  So I acknowledged he couldn’t refund me, but armed with my confirmation code, he probably *could* look up the reason for the charge. He grudgingly conceded that fact.

    The answer – which took about 2 minutes to determine – ended up being that there was a back-end “handshake interaction” (his words, not mine) that occurred because we booked and then canceled with the rewards points.  Something with how Marriott reimbursed the property for a canceled miles stay, from what I could tell – he used a lot of jargon and mumbled into the phone.  It should have been completely behind the scenes, but the hotel had accidentally tried to pass about half the fee onto us.  (I still don’t know if accidentally should be in air quotes or not.)

    Seeing how quick it was to determine the problem, that we had cancelled in time, and that it took the phone equivalent of me standing in front of the desk and not moving to make them refund us the near-equivalent of a two-night weekend stay, can you tell me *some* properties never try to pad the bottom line?

  • Rick Corretjer

    I had a similar situation with a hotel in Seattle. I cancelled my reservation 4 days in advance, but they still charged me for a one night. Good thing I used my Amex Gold card. A quick call to Amex and they charged it back to the hotel. Like a previous poster stated, when traveling, it’s best to use an Amex. Their dispute process is tough with merchants.

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

    I say file a small claims dispute.  The whole purpose behind small claims is that its for small amounts that would otherwise clog the courts or would not be worth hiring an attorney.

    Consider it takes about an hours to fill out the forms.  And you can usually figure out a way to hear it in your own court.  The other side probably won’t show and your judgment includes all fees.

    Name only Hotels.com, not the international property.

  • Nikki

     Wow.  Knowing Marriott’s reputation, I’m surprised that corporate didn’t try to resolve this themselves.  It sure would have saved you a lot of headache, head-scratching and hearing mumbo-jumbo that had you smelling a rat.  (Or 5.)  From what I read of your experience – and I am genuinely sorry you even had to handle that – I think I would have brought someone like Chris in on it.

    I would be far from truthful if I said that some properties never tried to pad their own bottom line.  There’s some backhanded ways to squeeze as much as possible from whatever means necessary, and they’re too numerous to list here.  In the hospitality relationship, I’ve found that the more people involved in a particular transaction (like a reservation), the higher the potential for mistakes.  I’ve always been a big fan of getting the assistance of a good, solid travel agent, or in lieu of that, making sure you understand your travel arrangements from soup to nuts.

    (I look at some of the posters here, like Tony_A, whose posts have been invaluable in teaching me something new every day.)

    I really wish there were some businesses that followed what’s right instead of what’s going to get them the most without giving up a lot.  I think if everyone did what was right – what made common sense to make things right – Chris and other advocates like him wouldn’t have much of a job, I’d think… but as long as there are knuckleheaded companies out there doing shady kinds of business, I’m glad Chris is around. 

  • davidglass

    I doubt it is worth his time to fly to Dallas, TX and sue Hotels.com in small claims court.

  • AAmerican1

    I think it is more an issue of incompetence, little or no training, poor internal communications, and in general a total lack of customer service. Sadly, this is a common theme in corporate America today that is not exclusive to the travel & hospitality industry. 

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

     That’s why I said you can usually figure out a way to have it heard in your own court.

  • SpankyMcSpanky

     The BBB is just a service that “members” pay for and are allowed to game.  Totally useless in 2012.

  • SpankyMcSpanky

     You cannot file a small claims case outside the jurisdiction of the business.  You can raise the case but then it’s not a $70 case anymore….

  • Nikki

     I wondered about that, too.  Can’t remember where I’d seen that.

  • SpankyMcSpanky

    You folks are all delusional if you think this is incompetence or a mistake.  Businesses like Hotels.com make their money on volume – if you lose a customer along the way so be it.  And the chances of a customer having a poor experience not using them again are not as high as you’d think.  These web merchants have procedures in place to “fatigue filter” out many issues.  It is designed into the system.   The ONLY reason this check went out is that the bad press wasn’t worth $70, plain and simple.

  • Rachel

    Not necessarily.  In Ohio, I have the right to file a small claim in the county in which I live.

  • Joe_D_Messina

    In this case, the OP was very lucky it was the agent’s time zone, because he apparently missed the 24-hour cutoff where he was traveling. He’d have no chance at all if not for that.

    As long as their partner hotels go along with it (probably the problem in this case) setting the time to EST would help Hotels.com employees because they wouldn’t need to figure out the time zone of where the person was traveling every time a cancellation comes in.

  • Joe_D_Messina

    The jurisdiction of the business typically would include where you purchased their services, thus you very well may be able to sue hotels.com locally. 

  • Nikki

     Having read that, I wish I could disagree.  Spanky’s right… and there’s more new suckers- umm, customers – for them every day.

  • Joe_D_Messina

    BBB member businesses get a a lot of slack. Reporting back to the BBB that you attempted to resolve the situation is really all it takes to have complaints dismissed. (And, speaking from the business side, that’s not always a bad thing, because crackpot complaints are not uncommon. It would do the business nor the consumer any good to have ratings skewed by unreasonable or downright fraudulent complaints.)  I freely admit that some businesses use this to their advantage, but the BBB isn’t total bunk. They do require that at least some effort be made to resolve complaints and that’s more than is guaranteed with non-member businesses.

  • Chasmosaur

    My family is pretty good at asserting themselves – it would take a really major problem for me to go to Chris :)

    But we’ve discovered that sometimes Marriott properties can be a little flaky when it comes to redeeming awards points – and it’s usually the nicer hotels, not the ones more geared towards business travel.  (Those properties couldn’t be nicer to us – I’ve lost count of the automatic upgrades we’ve gotten to suites over the years.)

    A few years ago, one of the better San Francisco properties tried to put us in one of those tiny overflow rooms (or whatever you call them – the ones that you have to exhale if you want to get between the walls and a queen sized bed and the bathroom is barely big enough for one person).  This was for a week-long stay in early February that we’d booked 4 months in advance – not exactly last minute or peak tourist season.

    We immediately went back down to the front desk, where I told them the room was unacceptable, and pulled a minor but polite diva move by pointing out my husband’s Platinum status (earned from stays, not credit card purchases).  I then wondered if Marriott corporate knew how they treated their most regular and loyal customers.  Amazingly, a regular room “opened up”.  Surprise, surprise.

  • Nikki

    rofl – oh, I can only imagine.  Though that gets to me, that kind of move… we’re told at the desk never to allow a priority-program guest go into anything but what they booked, and if not available, upgrade.  It was usually our hide if we didn’t.

  • Crissy

    I think they do, and I think they figure that even if they eventually pay, after months they’ve made some interest off your money.  There is no reason a refund shouldn’t take more then a few days and then maybe a few weeks to process it.  

  • ExplorationTravMag

    It’s not just hotels who do this – this is a standard company ploy.  If you ignore them long enough, they’ll go away.  These companies don’t realize the tenacity of folks who have been wrongfully separated from their money.

  • dsliesse

    Hotels and every other industry on the planet.  Not every company, of course, but every industry.

  • TonyA_says

    Hotel Cancellations are not as simple as you might think. The reason for this because:
    (1) Hotel “properties” are distributed using different models:

    (a) direct – you make a booking directly with the hotel and you pay the hotel directly (usually postpaid)

    (b) agency model – a 3rd party books your room for you but you pay the hotel directly (usually postpaid).

    (c) merchant or wholesale FIT model – a merchant contracts rooms with the hotel with special rates, then you book a room with the merchant and you pay the merchant. The merchant gives you a (prepaid) voucher which you present to the hotel. You do not pay the hotel for the room but you pay the hotel for the incidentals.

    (2) Each Room Type in the same hotel can have different cancellation policies

    Hotels dotcom is part of Expedia. They sell both agency and merchant properties. If you have to prepay for your room and end up with a reservation voucher, that’s a dead giveaway that your hotel is merchant property for Expedia. In that case, you are dealing with Expedia for everything including cancellation.

    If you book a room and your credit card is merely taken to guarantee your reservation, you can assume that the hotel is an agency property. You are dealing directly with the hotel since you are paying the hotel when you check out (postpaid). You should cancel with the hotel directly to be sure you won’t be penalized. Note: your travel agent can also cancel the room for you.

    That said, here is some information on H2O Hotel in Manila, Philippines. This hotel is part of the Worldhotels group. It is sold by many travel agents using the agency model. The agents book the room for you using a GDS and they make a commission from the hotel. Your credit card is taken to make a guarantee but you pay for your room when you check out (postpaid). The standard cancellation policy of this hotel depends on the room package. They are either:

    Note it says LOCAL TIME. Manila is GMT+8. The OP is from San Francisco and PST is GMT-8.  Therefore Manila is 16 hours ahead of the West coast during standard time. 48+16 = 64 or almost 3 days.
    Bottom line, if you book through an AGENT of this hotel you have to cancel at least 3-4 days (if you are in the West Coast) prior your stay.

    Booking Using the Merchant Model
    The H2O hotel Manila is a merchant property for the Expedia Affiliate Network. Note that they offer 2 type of rates:
    (a) Special rate:
    Advance purchase special.
    This special discounted rate is non-refundable. If you choose to change or cancel this booking you will not be refunded any of the payment.
    (b) Free cancellation – You can cancel FREE OF CHARGE until 12:00 AM ((GMT-03:00) Buenos Aires, Georgetown) on Jun 12, 2012. Otherwise, you may lose all your advance payment.
    Note I booked a room for 6/15/12.

    12AM GMT-3 is 11AM Manila time on Jun 12. So I need to cancel 61 hours before 15JUN in Manila. Again we are talking about 3 days.

    Note further that you cancel a reservation using the hotels dotcom website. They do not tell you to call up the hotel to cancel. So I assume you need to contact hotels dotcom only.

    Very important –  if you book the Free Cancellation rate, your credit card is still charged in full by hotels dotcom. Read – Full payment will be charged to your credit card when you book this hotel.

    So you need to understand that this is NOT a POSTPAID rate. In fact all I see from them are PREPAID rates. The difference is that some rates allow for cancellation. Do not get confused, both rates use the MERCHANT PROPERTY model since you are paying the Merchant and not the hotel. This is not the AGENCY model at all. Please note that SOME travel agents can also sell this hotel using Expedia (Affiliate Netowork) as the merchant of record. So you must know when you are booking a hotel room from an agent of the hotel or from a (wholesale/aggregator) merchant.

    What are the implications of the Merchant Model?
    Usually always prepaid.
    You present a voucher to hotel. The hotel bills the merchant NOT YOU.
    Almost impossible to cancel (without penalties).
    Hotel will not deal with you. They will deal with the merchant of record.
    The Hotel has given the merchant a huge discount (usually around 25-30%) so the hotel might treat you as a second class citizen.
    Hotel might try to sell you an upgrade when you check in, so they can make some money.
    The hotel might not have your name in the reservation.

    I have no clue where Chris got this – If you canceled your room 24 hours before your arrival, then you shouldn’t have been charged the one-night penalty.
    I cannot find a 24hour cancellation policy for H2O Manila anywhere, not even on my GDS hotel info.

    Are you really saving money?
    For 16JUN one night stay at H20 Manila —

    Hotels dotcom Special rate:
    $94   Free Cancellation $121
    You pay immediately (at booking) for either rate.

    Booking dot com Prepaid $97

    Booking dot com Postpaid $121

    FREE cancellation before June 12, 2012.

    If cancelled or modified up to 3 days before date of arrival, no fee will be charged.

    If cancelled or modified later or in case of no-show, the total price of the reservation will be charged.

    (Times quoted are from the hotel’s time zone (PHT) )

    Prepayment: No deposit will be charged.

    Worldspan (GDS) HotelSelect Postpaid $121 (you pay at checkout).
    Booking Must Be Cancelled 48-H Prior 14-00H Local Time To Avoid Charges, Cxl Penalty Is 1 Nights
    Guarantee Req. Credit Card Accepted As Guarantee. No-Show Charge Is 1 Nights.

    Bottom line — you can save some money with PREPAID room rates but beware you will lose all your money if you cancel. If you want POSTPAID rates, book through a GDS (e.g. AGENCY PROPERTY). The rates are usually the same as the OTAs BUT you will get better (more lenient) cancellation policy [at least you don’t lose all you money if you are staying more than one night].

    IMO, the OP had no clue he was booking a MERCHANT PROPERTY and not an AGENCY PROPERTY. Thank goodness Chris was able to get a refund (because he was not due any).:-)

  • Sadie_Cee

    Fortunately, the OP has been spared having to decide about whether to sue or not. As a matter of principle, he could have taken a run at the system and pursued this in small claims court.  Practically speaking, though, in view of the small amount of the claim wouldn’t the cost in terms of time and productivity make suing imprudent?  Filing and other pre-trial fees must also be considered.  In Ontario, these could amount to more than $200 and further, there is no guarantee that the defendant would not appear.  Slim though it may be, it is possible that the judgment could go against the plaintiff and the defendant could be awarded costs.

  • stephen Reed

    I had a similar Hotels.com experience.  I was looking at hotel in Venice, Italy, decided not to make the reservation.  Then said that I would sign up to join hotels.com.  Somehow that was converted to a reservation.  Anyway called them within minutes to cancel a reservation that I had not made.  Anyway after several conversations they refused a refund.  Needless to say I would never do business with hotels.com again.  And hope that no one else does either. 

  • TonyA_says

    Nikki, what you are describing is the typical OTA merchant model. The merchant (OTA) provides the hotel with a one-time-use (Mastercard) credit card which you use to charge the NET (negotiated) room rate and tax.

    My question is – if your hotel had to charge a cancellation penalty, would it charge it to that same one-time-use credit card, too? If so then the Merchant (OTA) would know whether to refund the customer’s money or not.

    That said, this poll, should really question whether the Merchant (OTA) is being dishonest in keeping the customer’s money when the hotel did not bill or charge the merchant anything.

  • Michael__K

    FYI: When I check hotels.com right now and request 6/15/12, it does have a 72 hour cancellation policy, but it references Atlantic Daylight Time (Buenos Aires) — which I believe is 11 hours behind Manila time!

    “Cancellations or changes made after 12:00 AM ((GMT-03:00) Buenos Aires, Georgetown) on 06/12/12 will be subject to a 100% fee.” 

  • mbods

    Wow, that’s awful, no Hotels.com for me.  Thanks for the tip!

  • TonyA_says

    Yes I mentioned that above in booking using the merchant model (b).

    Note it has nothing to do with Manila time at all. Also where the hell is Buenos Aires, GEORGETOWN ???
    Buenos Aires, ARGENTINA is GMT-3. I suspect there is a big Expedia or GDS Hotel (i.e. Amadeus) Processing Center there.

    Nevertheless, the H2O hotel required at least 48hrs from 2PM Manila time to cancel a reservation.

    By the way, here is the standard CANCELLATION clause between EXPEDIA and the HOTEL PROPERTY:

    d. Cancellation And No-Show: Unless otherwise specified by Property, a Company may cancel any reservation made for a Traveler at any time prior to 12:00AM (midnight of the Property’s local time zone) of the day that is 1 day before the date of arrival without any charge by Property. If (i) a Company cancels any reservation after that deadline, or the reservation is a no-show reservation, and (ii) the reservation is not subject to the conditions described in Section 5.i, then the reservation is cancelled in its entirety and, unless otherwise specified by Property, Property shall only invoice the applicable Company a cancellation charge equal to the Rate plus applicable taxes for one night for such reservation.

    If you read hotels dotcom PENALTY to customer, they company will keep ALL THE MONEY. So if Expedia can possibly pay only one night penalty, then why should the customer lose all if they paid for more than one night?

  • TonyA_says

    Good point! Therefore to prevent getting screwed, book directly with the hotel or with a travel agent using GDS (Agency Model) and  ONLY POSTPAID rates with a credit card.

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

      The entire purpose of small claims is for small amounts.  The time and money expenditure is minimal. 

    If it costs $200 to file and serve a small claims case, something is very very wrong.                          

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

    Agree. I am very very timid about booking post paid.  It needs to be a substantial savings and basically day of travel.  I also only book from the hotel website.  Too much opportunity for passing the buck.

  • Nikki

     Thank you, Tony! – I agree. 

    Tsk.  These friggin companies make it so hard to trust anyone.

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

     I’m not familiar with the term “raise the case”