Why are bed & breakfast cancellation policies different than hotels/motels?
Fact: 20% to 40% of online lodging reservations are cancelled
[SOURCE: HotelMarketing.com, May 30, 2017]
Given the staggering cancellation rates plaguing the lodging industry—if they are to survive—lodging properties must have cancellation policies that reflect the realities of their property type.
As you may realize, bed and breakfast cancellation policies tend to be less liberal than those of hotels/motels. Here’s why:
Hotels/Motels: The majority of hotel/motel bookings are made within a few days of arrival and often on the day or arrival.
Bed & Breakfasts: Most bed and breakfasts are destination properties. As a result most guests book b&b’s several weeks to several months in advance. That makes filling cancelled rooms within that time frame rare to impossible.
Hotels/Motels: Most hotels/motels are located in high traffic, commercial areas, often along highways or major roads. As a result, they are able to offset vacancies caused by cancellations with last minute walk-ins.
Bed & Breakfasts: Most bed and breakfasts are located away from the hustle and bustle and often in residential neighborhoods. As a result, they have little to no chance of filling cancelled rooms with last minute walk-ins.
Hotels/Motels: Don't let anybody tell you differently—size does matter. Hotels/motels tend to be comparatively large (between 100 and 1000 rooms). That means 1 canceled reservation represents only .01% to 1% of room inventory.
Bed & Breakfasts: Most bed & breakfasts are intimate (5 guest rooms or less and some 3 rooms or less). That means 1 canceled reservation may represent 20% to 33.3% or more of room inventory making even a single cancellation for a day unsustainable.
They Don't Know How to Hold the Reservation
Hotels/Motels: Most major hotel/motel chains overbook to offset estimated cancellations and no shows.
Therefore, even though a credit card is used to guarantee a room—hotels/motels are not required to hold the room.
What is the hotel’s responsibility when they overbook and don’t have a room for you when you arrive? Not much. Ed Perkins of Tribune Media Services, Inc. writes:
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 . . .
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, re-accommodating 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.—Smarter Travel: Your Guide to Dealing with Overbooked Hotels and Rental Cars
Remember the Seinfeld episode at the rental car counter?
JERRY SEINFELD: I don't understand. Do you have my reservation?
RENTAL CAR AGENT: We have your reservation, we just ran out of cars.
JERRY SEINFELD: But the reservation keeps the car here. That's why you have the reservation.
RENTAL CAR AGENT: I think I know why we have reservations.
JERRY SEINFELD: I don't think you do. You see, you know how to take the reservation, you just don't know how to hold the reservation. And that's really the most important part of the reservation: the holding. Anybody can just take them.
Bed & Breakfasts: Most bed and breakfasts know how to hold the reservation—they never over book. Never.
They hold the room in good faith—no matter what—in exchange for guests honoring their booking and the property’s cancelation policy. Like Jerry said:
And that's really the most important part of the reservation: the holding. Anybody can just take them.
How can you enjoy the long, long list of advantages of staying at a bed and breakfast without the risk of financial loss in the event of a last minute emergency?
Simple! Take the advice of the travel experts at Frommer's:
"It's wise to always consider a travel protection plan to cover your trip costs from the unexpected."—Frommer's, May 2015
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