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When a hotel goes out of business, what happens to your vacation?

January 6, 2009

Here’s a problem many travelers are likely to face in 2009: a hotel that closes its doors because of the lackluster economy, taking your vacation with it. But it doesn’t have to end badly, the way it did for Michele Greer.

Greer had booked a vacation package at the Meridian Hotel in Las Vegas back in June through Travelocity. At least that’s what she though.

On Dec. 22, four days before we were to go, I found out that our hotel had not been operational as a hotel since July. The Meridian Hotel was still listed on my Travelocity itinerary.

This afternoon, after a week of phone calls and emails, Travelocity offered a full credit in an email for the trip. The charges are still in dispute, until credited, with my bankcard.

We were very disappointed to have our holiday plans canceled. We were fortunate that we we didn’t go to Vegas and find ourselves in front of a closed hotel. This shouldn’t happen to anyone.

No, it shouldn’t. I asked Travelocity about the case. Here’s its response:

Our records show that we did phone and leave a message with the Greers last summer when the hotel went offline. Still, we recognize that we should have gone to greater lengths to make sure that they were aware of what was happening.

The refund is in process and we will also send the Greers a promotional code that they can use on a future trip. We’re, of course, sorry about this and hope we can take steps to win their confidence back.

That’s a nice gesture, but could Greer have taken any steps to make sure her Vegas vacation wouldn’t be ruined?

Actually, yes.

At a time like this, when the likelihood of a hotel bankruptcy is far greater than at any time in recent history, you can take some common-sense precautions.

First, phone the hotel immediately after your reservation, no matter how you booked it. Verify your confirmation number. If you want to be extra-careful, set up a Google Alert for your hotel. It will tell you when something changes with the property.

Finally, call the hotel directly at least a week before your arrival — just to be sure.

Greer was lucky. She bought a package through Travelocity, and she had also purchased insurance. Her entire trip was protected. This underscores the value not only of travel insurance, but also of buying a package through a travel agency or tour operator.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

5 comments

  • http://www.wingstrips.com Tom Mittl

    Great advice. Especially, book through a travel agency.

  • http://www.enduringwanderlust.com Enduring Wanderlust

    Have there been any estimates about the number of hotels closing to expect this coming year? Travel insurance that covers closings may be needed.

  • Amy Bradley-Hole

    One little change to your advice: Don’t phone the hotel immediately after your reservation. Give it a day or two. Agencies like Travelocity often fax or email reservation information to partner hotels once a day. Then, an agent at the hotel has to enter the reservation. So there is a lag time between when you book with a wholesaler and when the hotel shows you as having a reservation. Don’t panic if the hotel doesn’t have your reservation at first.

  • Jim_J

    I have to disagree with Chris on this one. It appears to me that Travelocity is totally responsible for this fiasco. The fact that the Meridian Hotel was still listed on Michele Greer’s online itinerary on the Travelocity web site indicates to me that they had no clue about what was happening. The lame excuse that they tried to call her months before sounds like a way of weaseling out or responsibility for what happened. Before you can book a trip on Travelocity, you must set up a profile. That profile includes a mailing address and an email address. If they were unable to reach her by phone, why did they fail to contact her by one of these methods.

    I personally will not use an online travel agency for any of my trips. I would much rather book travel through the websites of airlines, hotels and car rental companies. They are much less likely to mess up my trip. The one exception that I make to this policy is bidding for hotel rooms on Priceline. If you know what you are doing, you can save 50% or more. I have used Priceline at least thirty times and have never not had a room waiting for me nor have I ever been disappointed by the quality of the room based on the site’s star ratings

  • Kelly

    I agree with Jim_J. Just as Chris always says, Travelocity is acting as the travel agent. Travel agents are supposed to notify their customers of any changes. There is no reason why they couldn’t have called her a second time or sent her a letter or email. In fact I am really suprised a letter wasn’t sent out, I would think that would be the more official way to delivering that kind of news!

    This woman got really lucky that she found out before she left, instead of walking up to locked doors in Vegas.

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