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September 2005
Volume 1 Issue
2 |
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Review : ● Walking guests with guaranteed reservations results in unhappy customers ●Walking a guest is not the legal equivalent of bumping an airline passenger. ● U-Haul’s use of guaranteed reservations resulted in it being sued for multiple violations of state consumer protection laws.
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Step aside road rage. According to the Travel Rage Institute, the newest disorder affecting travelers is hotel rage. It joins air rage, cab rage and restaurant rage in afflicting unsuspecting travelers who naively believe that holding a confirmed reservation insures them a room in the inn. While travel rage disorders may be nothing more than the satirical ruminations of travel writer Terry Riley at ticked.com, the anger and frustration of would-be guests turned away despite the fact that the word guaranteed allegedly describes their reservation is not. The evidence for this abounds. In the widely publicized e-complaint known as Yours Is a Very Bad Hotel, two business travelers walked by an overbooked Houston hotel struck a nerve. Their intent was to get the attention of hotel management, so during their flight home, they wrote a complaint to the hotel in the form of a PowerPoint presentation. While the hotel responded to their satisfaction, they also got the attention of the world when their e-complaint made its way onto the Internet. With no solicitation on their part, they received over 4,000 e-mail messages in response representing twenty-one countries and forty-six states. The vast majority were from fellow weary travelers sharing similar war stories or otherwise sympathizing with their plight. Then there’s Hotel Overbooking Protection available for a fee to members at ReservationRewards.com. It reimburses travelers who hold guaranteed reservations but are turned away because of overbooking. In other words, walking would-be guests who hold guaranteed reservations is sufficiently common that it creates a market niche for the trip insurance industry. And not to be overlooked, there’s Overbookedhotel.com. Fill out a complaint form about your hotel overbooking experience and an attorney who wants “to force hotels to stop overbooking” will review it. While popular within the industry, overbooking is significantly less popular with those on its receiving end. Overbooking certainly isn’t peculiar to the hotel industry. It is widely known that the airline industry routinely overbooks and indeed some passengers look forward to the prospect of the free tickets and cash that often go to those who are bumped. It is, in fact, the genesis of an often repeated mantra of the hotel industry: “The airlines do it, so we can do it.” Unfortunately for the hotel industry, it’s just not true. The airline industry is federally regulated and heavily regulated at that. Airlines can overbook because federal regulations allow it. And one of the reasons the compensation to bumped passengers is so attractive is because that’s regulated too. Hotels are not regulated under federal law, they’re regulated under the laws of the various states in which they’re located. And state laws simply don’t include provisions for walking and compensating would-be hotel guests. There’s another difference too. Airlines don’t ask customers if they want to guarantee their seats with a credit card. Hotels routinely ask prospective guests if they wish to guarantee their rooms this way, however. And the word guarantee has a way of creating expectations on the part of guests. It tends to make them believe the room will be there no matter what and there’s nothing more they need to do—like call to confirm a day or so before their scheduled arrival. Why should anyone need to do that with a guaranteed reservation? The answer to that, of course, is because of the possibility the hotel overbooked. They’re less likely to walk someone who called to confirm. But hotel overbooking is not part of the common knowledge of many travelers. Hence, front desk clerks sometime find themselves on the receiving end of the newest rage--hotel rage. It all raises an interesting question. What is guaranteed about a guaranteed reservation? For would-be guests who are unwillingly walked, the answer is a straightforward—not much. That may be the reality of the situation in the moment when far from home and the need for a room supersedes the failure of a particular hotel to honor a reservation, but it’s obviously not the view of the attorney at Overbookedhotel.com and it’s not the law. To get an idea of what the law really says, the hotel industry might want to consider what happened to U-Haul. In 1997, U-Haul International, Inc., U-Haul Company of Massachusetts, Inc. and U-Haul Company of Rhode Island, Inc. settled a consumer protection case with the Attorney General of Massachusetts. Among other things, they agreed to permanently refrain from “Making any representation, directly or indirectly, that any reservation of trucks, trailers, vans or other equipment is guaranteed…” It all started with an unhappy customer who was told she could guarantee the availability of a rental at a reserved time by guaranteeing it with a reservation deposit. She made the reservation and gave them the deposit. When she arrived to pick up her truck at the agreed upon time, none were available. The manager was less than conciliatory and the situation quickly degenerated into finger pointing and yelling. In the end, the young woman told the manager she was going to report this to the Attorney General’s Office. The manager responded by dismissing her: “You don’t know what you are getting into. U-Haul is bigger than the government.” As it turns out, it’s not. As far as the Attorney General’s Office was concerned, the practices engaged in by U-Haul constituted multiple violations of consumer protection laws. That is, advertising and selling guaranteed reservations without really knowing whether the equipment will be available constitutes unfair and deceptive acts or practices. As spelled out in the complaint, the Attorney General’s Office believed this to include violations by “making false and deceptive representations [about] guarantees,” “making false and deceptive representations concerning the services to be provided,” “failing to disclose to consumers relevant information, which failure had the capacity or tendency or effect of deceiving prospective buyers in a material respect, “ and “failing to disclose to a buyer or prospective buyer facts that may have influenced the buyer not to enter into the transaction.” It doesn’t take a map to draw the similarities between U-Haul’s purportedly guaranteed reservations and their counterpart in the hotel industry. When a hotel books to capacity yet nevertheless overbooks by continuing to take reservations that are guaranteed, it doesn’t know whether it will be able to honor those reservations. So, the reservation isn’t exactly guaranteed. Further, it is undoubtedly true that at least some of the would-be guests wouldn’t make the reservation if they knew that. It is “material information” that would influence some to not “enter into the transaction.” U-Haul learned this the hard way. And, just like the hotel industry falls prey to the “We can do it because the airlines do it” mantra, according to Jeffrey Clements, one of the Assistant Attorneys General assigned to the case, U-Haul had its own mantra: “We can do it because hotels do it.” The mantra’s magic failed U-Haul. There’s no reason to believe hotels will enjoy a different fate.
Relevant Web Sites at a Glance: Hotel Over-Booking Protection: Overbooked: Terry Riley’s Travel Rage Institute: http://www.ticked.com/errtravel/2000/errinstitute.htm. Yours Is A Very Bad Hotel: |
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