Your Guide to Dealing with Overbooked Hotels and Rental Cars

If your airline has to bump you because it oversold your flight, government regulations here and in Europe protect you through specific levels of compensation. Unfortunately, hotels and rental car companies also occasionally overbook, and in these situations you have no legally mandated resources. Yes, your reservation is a binding contract, and if a hotel or rental car company can't fulfill it, you have legal recourse. But access to small claims court weeks or months later doesn't help when you're standing at the counter, late at night, and the agent tells you "no rooms" or "no cars."

Hotels occasionally can't provide a promised room for several reasons: typically, either deliberate overbooking or having current guests stay longer than originally planned. What are your "rights" when you arrive at the desk to find no room? I have been unable to find any legal requirements at any level of government beyond contract law, even when a reservation is fully prepaid. The normal industry practice is to try to fix the problem on the spot:

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  • If a hotel has available rooms but in a higher rated category than your reservations specifies, a hotel usually upgrades you to a bigger/better room at no extra cost. If it has rooms in a lower category, it downgrades you and adjusts the rate. Either way, the hotel tries to move you to the original type of room as quickly as possible.
  • If a hotel has no rooms at all, standard practice is to "walk" you to another hotel of "equal or better" quality, picking up the cost of your first night there and your cab fare to get there, reaccommodating you the next day.

Despite what you might have read, however, "walking" is not an enforceable legal requirement. Instead, it's just industry practice, not codified anywhere, and honored sometimes but not always. Whenever I've faced an oversold hotel, the hotel has "walked" me, per the practice, to a nearby hotel, but the substitute hotels were always "unequal or worse," not "equal or better" than the original. And I've seen reports of travelers being walked from an oversold city center hotel to a motel in the suburbs.

Car rental companies, too, sometimes can't honor a reservation. And, again, there are no legal requirements. Industry practice parallels the hotel case:

  • If other models are available, a rental company usually upgrades you to a more expensive category of car, whether or not you really want a bigger car, at no increase in rate, although the agent might first try to talk you into paying that car's higher rate. If only lower-category cars are available, you get downgraded with a rate adjustment.
  • If the company has no cars at all, a rental company might agree to find a rental from another company and pay any rate difference, but not without first asking you to wait "briefly" around the office as customers return cars.

If you arrive at your destination and your hotel or car rental company can't honor your reservation, your alternatives are limited:

  • Accept whatever solution you're offered, if it's at all reasonable.
  • If the net result of the offer is a downgrade, ask for a lower rate or extra compensation.
  • If the offer is unacceptable, negotiate for something better. If the clerk or agent says, "take it, or leave it," ask to see a manager.
  • If that doesn't work, get on your cellphone, find your own alternative, then ask the supplier to arrange that option.
  • If the agent stonewalls you, pay for the alternative you want, and submit a formal demand for reimbursement when you can, first with the hotel's ownership, and if that fails, in small claims court, where your legal case is strong.

But keep in mind that what you need is a room or car right now, not a verdict in six months. You have to set the balance.

Ed Perkins Seniors on the Go is copyright (c) 2012 Tribune Media Services, Inc.

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