Does increased revenue trump guest hospitality inside the Beltway?

By | March 25th, 2016

One of the biggest days for Washington, D.C. happens every four years in January. Rod Mirchev plans to be there next January 20, along with an estimated one million people. Why so many people? It’s Inauguration Day.

Mirchev has already booked his hotel room — or so he thought.

“I made a reservation and received confirmation through for four nights at Hotel RL,” Mirchev says. “I’ve recently received calls and emails from telling me the hotel made a pricing error and they want to change my rate.”

Mirchev booked four nights over inauguration weekend at the downtown property for just $140 per night. The hotel now wants him to now pay $309 per night, something he — and we — feel is wrong.

“I have a valid, confirmed reservation and I believe they are bullying me into a higher price,” Mirchev complains. “It’s price gouging. The hotel refuses to honor the agreed upon reservation price and is threatening to cancel my reservation.”

Mirchev feels these are bully tactics, and I tend to agree. The hotel group sets its own rates and chooses which third party sites can sell the rooms. Why should Mirchev have to accept a rate one cent higher than what was advertised? Isn’t that deceptive trade practice?

The reality is that just like airlines, hotels can — and do — oversell their inventory. But unlike the airlines, there are no regulations to dictate what happens when a hotel can’t or won’t honor your reservation.

Hotel policy governs, and it is typical for the hotel to provide similar (or better) accommodations in a nearby hotel, or one in the same hotel group. In the industry, this is known as “walking” the guest, because it may include a walk down the street to the alternate accommodations.

Related story:   What does a Trump administration mean for American consumers?

The hotel should provide ground transportation if the hotel is not within walking distance, and historically, the hotel would allow a free long-distance phone call so that the guest could inform his family or office of the hotel change.

I searched the hotel’s availability for Mirchev’s travel dates, and the hotel is indeed sold out. In fact, I imagine come next January, all hotels in Washington, D.C. will be sold out, which begs the question — where will Mirchev stay if and when the hotel does not honor his reservation?

Mirchev wrote back to our team, saying that a senior manager from is getting involved to try to work things out “amicably.” While his reservation remains uncertain, it would be unjust for the hotel to fail to honor the reservation as originally priced. After all, let’s not forget that Hotel RL is one of many in the industry promising a dubious Best Rate Guarantee.

Mirchev will keep us informed of the outcome of his case, and in turn, we will update this story. It seems unfair that Mirchev should be forced to pay more than double the rate because Hotel RL didn’t update its inauguration weekend rates prior to them going on sale.

It’s not like they didn’t know it was an election year.

Should Hotel RL be required to honor the reservation at the advertised price?

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  • ctporter

    Since he made the reservation through a third party and not through the hotel directly, why isn’t the third party site on the hook for this one?

  • Jeff W.

    This is 100% on the hotel and it is up to the hotel make it right.

    It is not as if the dates of the inauguration could have been a surprise. Once Obama was re-elected in Nov 2012, there would be a swearing in of somebody new on Jan 20, 2017. Someone at the hotel forgot to mark those dates as a “special” and people were able to book at the lower rates before the hotel figured it out.

  • Kairho

    Because legally that third party is acting as agent for the hotel. Just like a hotel salesperson does. Agency law applies.

  • NotThatBrooklynGuy

    It’s pretty certain than Jan 20, 2021/2025/2029 etc. will also be special event days. If it turns out to be the same president being re-sworn in, they can always drop the rates.

    Calendars and this kind of math isn’t that hard!

  • Ben

    Time to start booking!

  • AAGK

    A DC hotel forgot to overcharge on inauguration weekend and that is supposed to be on the guest!!!?? The OTA should also reconsider its relationship with this property.


    This happened to friends from the UK in NYC about 8 years ago, They had booked a hotel for Thanksgiving on a similar site about 10 months in advice. They were contacted in September of that year and were told the hotel would not honor the price confirmed at booking and pre-paid.

  • Peter Varhol

    I have been walked, at the Rio in Vegas. Due to a stupid flight delay (an airliner rest room was out of order, and we had to wait an hour and a half for a certified technician to come and post an “Out of Order” sign), I arrived in Vegas at midnight. The bad thing about the walking was that this was for an event my company was having at the hotel with 500 people, and I was one of the principals. The other bad thing was that when the Rio finally let me check in, they looked at my BoA AmEx Accolades card dubiously and said, “Is this a credit card or debit card?”
    I’m sure my company extracted a concession from them for my inconvenience, but I was only inconvenienced.

  • Rebecca

    Gotta love union rules! One of those things that’s funny now, but I’m sure wasn’t at the time.

  • When a travel company makes an error, it gets a do-over. If you make an error, you don’t.

  • Annie M

    If they don’t agree, I can pretty much guess he’ll be walked to a hotel well outside of Washington DC. When a hotel is oversold, the first ones who are walked are the ones who paid the lowest prices through the OTA.

    The hotel SHOULD be held to the rate that was booked and I believe as the middle man should be working this out too. Who charged his credit card?

  • Jake S

    “No, the free market should dictate.” I have a feeling that in free market it would be a breach of contract.

  • KanExplore

    This has nothing whatsoever to do with “free market,” a straw man choice that Elliott loves to put up in his votes (I know he didn’t write the story, but the poll question has his fingerprints all over it). Free market is freedom to set your price to reflect market conditions in the first place and, yes, to change prices of inventory while it remains unsold. This, by contrast, is bait and switch. If you advertise a hotel price and a customer completes the necessary steps to book the room, then you can’t change the price just because you later realize you should have priced it higher. This doesn’t look like a fat finger error (say if it had been offered for $30 instead of $309), but rather a conscious decision to change the rate after the booking was made. That’s wrong and shouldn’t be allowed.

  • Tom McShane

    I’d say that the free market is more broadly defined than freedom to set your price. I would bet that there are people who would hold that regulations regarding bait and switch are a violation of free market principles. They would go all Let the Buyer Beware.

    Not that I see this as a bait and switch. I don’t think that the hotel was trying to lure the guest in with a low price, then drastically raise the price for him. They just wanted him and his low-priced room gone. It was a bone-headed error. If the hotel has a sense on decency, they should honor the rate.

  • Tom McShane

    Without union rules, things might get kinda tricky when they tell the flight attendant to change out the pitot tubes. I’m sure FAs generally work more cheaply than aircraft mechanics.

  • jim6555

    What do unions have to do with this??? The airline had to wait for a “certified technician” to make the repairs. Certified means that the repair person has been evaluated and has proven that he/she is competent to make the repair. It does not denote that the technician is a member of a labor organization. Airlines are responsible for the safety of the flying public and have to be make sure that those working on their aircraft have the technical expertise to properly do the work.

  • Jake S

    The free market proponents I know believe that law should be simple (as opposed to excessive government regulation and corruption), and contracts have to be enforced one way or another. Free market doesn’t mean lawlessness and chaos.

  • Tom McShane

    The tricky part is how you define excessive. Does non-excessive regulation=caveat emptor?
    Anyhow, props to Elliott for regularly tell us the caveats, whatever his view on the market.

  • Jake S

    I would say that representative examples of excessive regulation are when (1) a company has to pay for an army of lawyers to be in compliance with thousands and thousands of obscure laws instead of providing high quality products and services and investing in R&D, when (2) the legal environment is such that contracts and terms of service can legally contain all kinds of abusive items to take advantage of the customer, and when (3) in countries such as France, you have to constantly just through hoops because the government wants to regulate every detail of your life.

  • Tom McShane

    So, there’s a representative democracy that wants to regulate every details of one’s life? That could possibly, almost sound sorta like hyperbole.

  • Jake S

    I have lived in Paris for a few years.
    You can never do anything official without going there at least twice.
    To buy a house in France, the government requires you to have a French bank account.
    I had to go something like 5-10 times to the immigration office to obtain my residence permit, because every time they wanted me to bring an additional document, and it was trivial, bureaucratic stuff. Last time, they found a microscopic scratch on my photos and considered asking me to bring new ones,
    The government practically forbids setting up recurring credit card payments online.
    If your French credit card is declined several times in a row, the bank is required to report you to the Bank of France, and then all of your French credit cards may be deactivated.
    When you open a personal bank account, the bank can ask you for all kinds of documents such as tax statements, referring to the regulations.
    I can go on, and on, and on. If you wish, you can google expat experiences in France for countless more examples.

  • Tom McShane

    What do you reckon Our Friends, The French would have done about the RL Hotel?

  • Jake S

    There are lots of abusive, one-sided contracts in France. I don’t know the regulations that would apply to this particular case, but it could easily go two ways — either it would be strictly forbidden for the hotel to charge the higher price, or terms allowing the hotel to do that would be set in stone and would be enforced from a high tower with all might and arrogance.

  • Tom McShane

    Dang. Sounds like they are right harsh never there. No more French onion soup for moi. And if the word fromage ever passes my lips, may my langue cleave to the roof of my bouche. Heck, no more French kissing, either.

  • Tom McShane

    What kind of snake was it? thos

  • Jake S

    What kind of snake?
    By the way, I love France and go there any chance I get. The culture, the cuisine, and the savoir-vivre are simply delightful. But their excessive government regulation is probably exemplary in the Western world, and it is in horrible contrast to the positive aspects.

  • Tom McShane

    Oops, wrong article. I didn’t realized hitting reply on my email would reply to you, Jake.Often when I try to reply on Elliott, the reply field will zip out of site with each character I type, so I type on my email copy and paste the reply on Elliott. This time I hit send instead of copy and here we are.Wonder if anyone else has the jumping reply problem on Disquis thos

  • nativenewyorker

    Even your question is poorly worded in the hotel’s favor. The price he was offered was a free market price as determined by the hotel. The question is whether they should be allowed a mulligan at their customer’s expense because they priced their product poorly in the free market.

  • cscasi

    Sounds like what Obama and Clinton want for the U.S.A.

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