Cancellation woes

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4 minutes

By Adam Raphael

Judging by the Guide’s postbag, the most common source of bad blood between guests and hotels is cancellation fees. A Devon hotel attracted headlines a few years ago when it sought to reclaim £1,000 from the estate of a woman who had cancelled six weeks in advance of her booking, just before her death from cancer. Guests are not always right but hotels have much to gain from a generous policy in favour of those who cancel because of ill health or other valid reason. The costs may hurt, but a harsh policy is counter-productive.

This is the time of year when we ask the Guide’s inspectors to stay a night at hotels and B&Bs which are potential candidates for a prize or an entry in the next edition. The inspections are anonymous, with the Guide meeting the cost of a dinner with a modest bottle of wine and an overnight stay for two. One of our inspectors was asked to look at a potential new entry, the Bell Inn at Langford, near Burford in the Cotswolds. He booked online through the hotel’s website three weeks ahead for a night’s stay with his wife. The hotel’s confirmation of his booking noted that it was ‘non-refundable’ but immediately underneath, it said: ‘If you need to cancel or make changes to this reservation, please contact the Bell Inn.’

The auguries were promising. The Bell, owned by two experienced hoteliers, Peter Creed and Tom Noest, has attracted good reviews from a variety of sources ranging from foodies to national newspapers, with praise for its simple pub food with a good wine, spirits and beer selection. Unfortunately, ten days before his planned stay, our inspector learnt that the funeral of a family member was to be held that day. He therefore telephoned the Bell to explain the circumstances and said he was happy to come at another time, and if necessary was prepared to pay a bit extra. The woman who answered said she would check but phoned back to say that that changing his reservation was not acceptable and that his credit card would be charged the full amount (£114.75). When the manager was contacted, he claimed that his hands were tied and said that he was acting under instructions.

The Bell’s side of this unhappy saga is unclear for its owners have so far declined to reply to my request asking them for their comments. But there are some points that could be made. The inn’s terms and conditions published on its website are a defence against litigation. A good hotel, however, should not be basing its cancellation policies on a thousand words of T&Cs written in excruciatingly small print. The Bell could also point out that guests should telephone to make a reservation rather than book online. Certainly, booking through an online travel agency such as Expedia or invariably leads to a worse outcome as an investigation published last week by Which? showed. But none of this goes to the point. The Bell may have acted within its legal rights, but its treatment of its guest was poor. Why, for instance, did it not offer to make a whole or partial refund if it managed to re-let the room?

It is not just cancellation policies that cause friction. The increasing practice of hotels of deducting large amounts in deposits, even for bookings made months in advance irritates Guide readers. Requiring a cancellation fee even when the cancellation is made months in advance may be unenforceable. According to the Competition and Markets Authority The terms and conditions under which a hotel trades must be ‘fair and reasonable’. Just because it’s in the contract doesn’t mean it’s legally binding. Businesses cannot rely on unfair terms. Cancellation charges must be a genuine estimate of the business’s direct loss.

What is a fair cancellation policy? There is unfortunately no simple answer. It will depend on the type of property and its location. A hotel on a remote Scottish island cannot afford to trade on the same terms as a city-centre hotel. Yet even for a hotel in a remote area, enforcement of a punitive cancellation policy is unlikely in the long term to be beneficial. The advice that many hotels give that customers should take out travel insurance is simply passing the buck, nor will relying on terms and conditions inspire loyalty. I am glad to say that many of the Guide’s selected hotels go out of their way to treat guests who are forced to cancel generously. When asked about this, they reply that such a policy in the long term pays dividends.