Professor Advises Travelers: Beware Hotels That Overbook Guaranteed Reservations

AMHERST, Mass. - You’re planning a business trip or a vacation, so you make a reservation in the hotel of your choice, provide your credit-card number to guarantee the reservation, and assume your room will be ready and waiting whenever you arrive.

Think again, says Linda Enghagen, associate professor of hotel, restaurant, and travel administration at the University of Massachusetts, who says that because hotels commonly overbook reservations and rarely disclose that fact, a guaranteed reservation doesn’t mean what guests generally believe it to mean.

According to Enghagen, overbooking occurs when a hotel accepts more reservations than it has rooms available. If no rooms are available to guests who have reservations, they are "walked," a term that means they’re provided with accommodations at another hotel.

Overbooking, which is widely accepted within the industry, raises legal issues as well as ethical concerns, and must be addressed, says Enghagen, who is also an attorney. "Hotels commonly overbook to maximize their revenues and to make up for ‘no-shows’ and late cancellations," Enghagen says. "I don’t have a problem with that. On the other hand, it’s not right to call a reservation ‘guaranteed’ when it isn’t. The traveling public isn’t aware of the risks because there’s no disclosure."

Hotel officials are quick to point to airline overbooking as justification for the practice within their industry, but the problem with that, says Enghagen, is that the airline industry is governed by specific federal laws which do not apply to hotels. In addition, she notes, airlines must comply with certain disclosure rules concerning overbooking.

Hotel customers who fail to cancel room reservations they cannot use and hotels that fail to impose penalties for no-shows are both to blame for problems that arise from overbooking, says Enghagen. To help address the problem of no-shows, Enghagen suggests that hotels levy cancellation fees or create a category of reservations that are not guaranteed. Besides the legal and ethical considerations, walking guests has costs for the industry, says Enghagen, in terms of customer dissatisfaction and future lost revenues.

Enghagen sees a number of similarities between the practice of hotel overbooking and a recent class action suit involving U-Haul and that company’s failure to provide rental trucks for consumers who had guaranteed reservations. She notes that U-Haul attempted to defend its practice by, among other things, pointing out that hotels routinely overbook guaranteed reservations. Nevertheless, U-Haul was ordered to stop calling its reservations guaranteed because in reality they are not, Enghagen says.