Question: I have a few questions: is a hotel reservation a binding contract? Does it make a difference if I don’t make a so-called guaranteed reservation by providing my credit card information? Does it make a difference if the reservation does not mention that it is “confirmed”? Does it make a difference if I don’t fully prepay? Even if I have a binding contract, can the hotel overbook and send me to another hotel? Finally, even if I have a binding contract, does the hotel have the right to increase the price of the room until I have paid in full?
A: These issues were the subject of recent publicity when some hotels on the way to the total eclipse tried to dramatically increase their rates, even for guests who had booked months or years in advance. Industry experts quoted in the mainstream media were all of the opinion that a reservation is a binding contract at the rate quoted by the hotel. I am okay.
A reservation is a binding contract made up of mutual promises: the hotel undertakes to provide accommodation at the indicated rate, and the customer undertakes to pay. Unless the hotel adds conditions when entering into the contract, the contract is unconditional and does not depend on any of the factors listed in your questions.
In addition, the indicated rate is part of the contract, unless the hotel adds relevant conditions at the time of conclusion of the contract. For example, the reservation may indicate that, as with airlines, the fare is not guaranteed until the traveler has paid in full, or it may indicate that the hotel may cancel until the traveler has paid in full.
The lawyers I have consulted confirm my point of view. According to Thomas Dickerson’s Travel Law Treatise, âA promise made by a hotel to deliver a room in the future in exchange for payment or a promise to pay constitutes a binding contract. The hotel is obligated to deliver the room, and the traveler is obligated to pay for it.
As a corollary, Dickerson notes that âwhen a traveler makes a reservation and then cancels it, the hotel has a cause of action against the traveler, and the traveler may be subject to a cancellation penalty. Thus, since there is a binding contract, both parties could be held liable for the breach.
In another legal treatise, Hotel Law, by Ellen Smith and Victor Haley, the authors state that: âAdditionally, if a guest has a confirmed reservation or hotel accommodation contract, the hotel owner may be held responsible if the hotel does not honor the customer’s confirmed reservation for a room, even if there are no rooms available at the hotel.
The cases cited by these experts all deal with the hotel’s refusal to honor the reservation, not the hotel’s attempt to increase the rate. However, the legal principle is clearly the same: once there is a binding contract, the rate becomes part of the contract.
To answer your other questions: in the absence of conditions disclosed during the reservation process, you would still have a binding contract, that the reservation is guaranteed for a late arrival (as long as you arrived before the cut-off time), that the reservation uses the word “confirmed”, if you have prepaid in full or if the hotel has overbooked.
Of course, the hotel can unilaterally impose all of these conditions during the booking process if they wish, as long as you (or your travel agent) are informed of the conditions during the booking process. If the hotel hides the terms in the fine print that are not brought to your attention before the end of the reservation, the terms are likely unenforceable.