Why won’t American Airlines refund my hotel?

By | January 24th, 2017

Hurricane Matthew ruined Antonio Grau’s vacation to Portugal. Now American Airlines is ruining his hopes for a full refund.

Grau purchased a vacation package that included airfare and hotel through American Airlines Vacations. He was to supposed to leave Miami on Oct. 6.

Then came Hurricane Matthew.

On Oct. 5, Grau was informed by American Airlines that, because of the planned airport closures for the next day, his vacation dates needed to be slightly adjusted.

Of course, no one enjoys their travel plans being disrupted by weather related issues. But when weather-related issues end up costing a traveler more than $1,000, who is to blame? In this case it appears that, because of some misunderstandings of his travel terms, Grau will be bearing the financial brunt of Hurricane Matthew. And he isn’t happy about it.

Grau says that, during the call on Oct. 5, he was assured by the American Airlines representative that because he had purchased the Pre-Departure Protection (PDP) for his trip, he would be fully refunded should he decide to cancel.

“Based upon the agent’s indication and relying on them, I then canceled my trip,” he says.

Within several days, Grau received the refund for the airfare portion of his trip ($1,522). He called American Airlines to ask about the rest of his refund and was shocked when he was then informed that the hotel portion was nonrefundable ($1,297).

How could this be? Grau was certain that he was protected by the PDP, for which he had paid an additional $258. He was also sure that the American Airlines representative had confirmed this information, prior to his cancellation.

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So, he used our listed contacts for American Airlines and began his quest for his refund.

American Airlines reiterated to Grau that there are exceptions to what is covered under the PDP. They pointed out that he had “self-booked” a hotel that was nonrefundable. Grau insisted that he had no idea that his hotel was nonrefundable and asked American Airlines to provide him with the recordings of his Oct. 5 call. He believed that this recording would prove that the representative told him that he would receive a full refund for his vacation.

American Airlines declined his requests for the refund and for the access to the recordings.

So Grau turned to us for help.

We contacted American Airlines and asked them to clarify Grau’s situation. Our executive contact responded with the following information:

There has been a lot of research put into this booking by our call center including listening to call recordings regarding the customer’s claim that we told him it was refundable. We found no evidence that he was told this.

The customer made the booking online on his own, with the room showing as nonrefundable. We did reach out to the hotel to ask for a waiver of the nonrefundable status due to the conditions under which the cancellation happened but the hotel declined; you may want to reach out to them directly.

So that is what we did.

Certainly, a hotel would be understanding about a customer’s need to cancel or reschedule a stay due to a hurricane. No?

No. Not this hotel.

This hotel was not sympathetic to Grau’s plight at all. In fact, it completely ignored our attempts to negotiate a refund or a voucher for him.

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So, unfortunately, as much as we would like to help him with a refund, we can’t. The contract that Grau supplied to us is quite wordy, but it does explain that PDP does not apply to nonrefundable hotels. American Airlines refunded the airfare, but could not force the hotel to give Grau a refund.

Although this is unfortunate, it does appear that American Airlines fulfilled its obligation under Grau’s vacation contract. But there are lessons to be learned from this case.

If you choose to self-book a vacation, be sure you read and understand all the documents relating to your vacation package. Specifically, make sure that you know the refund and cancellation policy. Although Grau thought he was fully protected by the PDP insurance, the contract said differently. And that is ultimately why his story ends as a Case Dismissed file.

Did American Airlines adequately compensate Grau for his canceled vacation?

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  • Mark

    That’s a pretty appalling trip insurance cover if it excludes non-refundable hotel bookings, especially given the $258 premium he paid.

    I have used a company called World Nomads in the past – a two week policy from them would cost $102 and give you a full refund for holiday costs up to $10K if the airline had cancelled all flights out of MIA for 24 hours.

  • Jeff W.

    I am confused. The portion of the article mentions that he booked a package — airfare and hotel. Then AA (and later in the article) claims that he self-booked the hotel. It is one or the other, not both.

    Or did he use AA to book both the airfare and hotel separately? AA combined the two bookings as a single itinerary, but it was not a package deal.

  • Alan Gore

    The air portion of his vacation would have been refundable anyway because of the schedule change not accepted by the passenger, so LW didn’t actually get insurance coverage for anything.

  • cscasi

    I believe you can book a package online with American. First, you choose the flights you want to your destination and return. Then, you are usually shown a number of hotels from which you can choose and finally add on any “extras” you might like; i.e. tours, airport pickup, etc.
    It could be the hotel he selected had the no cancellation policy. That’s just my thoughts and I could be wrong as we did not get the whole picture.

  • cscasi

    Thanks for bringing that up.

  • Bill___A

    American said he “self booked” the hotel, so I don’t think it was done through American Airlines at all.

  • Bill___A

    American says he “self booked” the hotel and I am very inclined to believe American in this case. That would mean American has nothing to do with the hotel. At all.

  • Bill___A

    “Grau purchased a vacation package that included airfare and hotel through American Airlines Vacations. He was to supposed to leave Miami on Oct. 6.” It later comes to light that he self booked the hotel. This should have been quite obvious to the OP and he should not have had to escalate it to an advocacy site. It makes no sense to ask American to cover it.

  • Mark

    You’ve missed the point.

    Proper travel insurance (which is cheaper than the bogus policy sold by AA), would cover you for trip cancellation, including “self booked” / “non-refundable” hotels in the event of a total shutdown of your local airport because of a hurricane.

    AA seems to have sold Garu cover at a very high price with very, very weak cover.

  • Annie M

    If the hotel wasn’t booked as a package then insurance only covers the airfare, which isn’t needed in this case anyway. And if it was there may be exclusions for hurricanes.

    What needs to be clarified is what “self booking” means.

  • Asiansm Dan

    It’s not fair because of if the OP bought the Travel Insurance elsewhere than American Airlines, anything is covered, no matter who booked and where.

  • Tigger57

    It appears he booked with AAVacations. They have air/land vacations all over the world. They also have hotels that are clearly noted “nonrefundable”. As a travel agent I see this happening more and more and think it is not quite right to offer insurance on a package where part of it is not covered. One wold have to purchase insurance elsewhere.

  • Annie M

    I think the issue is the policy itself which states “nonrefundable” hotel rates are not covered.(the link above it broken)

    Cancellation and Change Waiver (Pre-Departure Protection)



    With the purchase of the Cancellation and Change Waiver, travelers may cancel and/or change either the land and/or air portion of their package. Some hotel room categories and airfares may be non-refundable and are not covered by this Waiver. Optional activities (transfers, sight-seeing, theme park passes, rail passes, etc) are non-refundable even when the waiver is purchased. In addition, some airfares may be available only in connection with land arrangements and those requirements are not covered by this Waiver. Administrative Service Charges (ASC) on certain airfares may still be applicable even if waiver is purchased.

    Cancel – the waiver covers cancellations, for any reason, up until scheduled departure time. The waiver also covers revision fees. Restrictions may apply as outlined in land revisions of terms and conditions. When making your reservation on-line, you will be given the option to add this valuable protection in the booking process. Please read the terms and conditions associated with the package you are purchasing before selecting the Cancellation and Change Waiver option and completing your reservation. When two or more parties travel together and stay in the same room, a cancellation will result in a refund on air and land only if thevroom is cancelled completely. If one person still stays in the room then there is no refund of the land cost to the canceling party. Cancellation should be advised as early as possible.

  • Annie M

    The travel insurance states that nonrefundable hotel rates are not included.

    He should have bought 3rd party insurance. He just purchased the wrong policy.

  • Mark

    Yep, so it’s a pretty terrible policy. As I said above, AA seems to have sold Garu a very high price with very weak cover (relative to price).

    Sadly he’d have been better off declining the AA insurance and buying cover elsewhere.

  • Annie M

    That I am very true. Every policy is different and one needs to read what is and isn’t covered. When I read the policy it’s pretty useless. Always question what you are getting when you look at the cost of a policy. If it seems very cheap there is often a reason why.

  • Nathan Witt

    What, exactly, is travel insurance for, if not to reimburse “non-refundable” costs when a covered even prevents you from using the booking as planned? American cancelled the flights, not the LW, so that refund would have happened whether he had insurance or not. And a refundable hotel reservation would likewise have been returned without the need for insurance. So what, exactly, did he get for his $258, other than a runaround?

  • random_observation_source

    Before anyone flames me into oblivion, I know that the responsibility for checking on his travel insurance’s terms and conditions rests squarely on him.

    But in this day and age of (near) self-driving cars, drones, instance Google searches and smart phones, is it be too much to ask for these online vacation/airline/ticket vendors to present a self-consistent product for sale?

    Its not technically complicated to, once someone clicks on insurance that doesn’t cover non-refundable hotels, to not show non-refundable hotels as an add-on purchase, or at least warn a user at checkout that their hotel isn’t covered in the insurance they’re purchasing.

  • Annie M

    Your guess is as good as mine. This policy stinks. But it clearly says it doesn’t cover non-refundable hotels. Got to read the policy before buying.

  • AAGK

    The financial brunt of Hurricane Matthew was 6 billion dollars so he’s not bearing the cost alone.

  • Bill___A

    Clarity in these sorts of things is something that’s not in abundance on this site, leaving us all to speculate upon issues which should be known to us from the article.

  • PsyGuy

    Bank card dispute. The service/product was not fit for purpose.

  • PsyGuy

    I agree the policy sucks and it’s sold at a premium.

  • PsyGuy

    Self Book means that AA Vacations offers hotel options outside their network as part of the booking process. It’s a convenience which is why it’s called self book, they are offering you the option through their web portal, but they are essentially hands off. It’s like your medical insurance. Your carrier provides a booklet of providers, some of them are “out of network”, you get reduced benefits if any, but they are still in the provider’s book.

  • PsyGuy

    I’ve used World Nomads, never had to make a claim, but they are far more affordable and provide better protection in most CFAR scenarios.

  • Mark

    I had to make a claim from them for Rabies shots in Mongolia and China after being bitten by a wild horse.

    Their advice was pretty useless “Uh, we have no recommended hospitals in Mongolia. Speak to the embassy, ask where they recommend, and try to get the doctor to write in English what they’ve done.” I also had to pay upfront for treatment and then claim back.

    Aside from that, the claims process was relatively easy and the ~$600 or so was approved / paid within a week.

  • PsyGuy

    Fair enough but you think AA vacations or any other consumer insurance provider would have had a better answer?

  • Mark

    Not necessarily. I do still recommend their coverage to friends, as ultimately they were quite pragmatic, didn’t quibble over the medical costs, and paid out quickly.

    That being said, there are third party databases of recommended hospitals in every country (e.g. one provided through International SOS) – it’s not unreasonable to expect the contact centre to have access to something like that.

    Frankly staff could even have googled the embassy’s website, which lists suggested medical providers.

  • Harvey-6-3.5

    I hope no one flames you. It would be a good idea (and probably a lucrative business if priced right), to offer this additional insurance.

  • Tracy Larson

    I believe he “self booked” on aavacations. He choose a hotel from a list provided on the site. He didn’t speak with a rep or travel agent, hence the “self book” status.

  • Lindabator

    they allow you to book a hotel OUTSIDE the package, and those terms and conditions may be nonrefundable, as in this case

  • Lindabator

    but they specifically do NOT cover the hotels they do not offer in the standard package – so get 3rd party insurance and it is no longer an issue

  • Lindabator

    they do not cover your lack of reading skills — was clearly stipulated, so no leg to stand on

  • PsyGuy

    Companies claim all sorts of clauses, terms, etc. Its worth a shot and costs nothing to try.

  • Annie M

    You are right. I’ve never seen a policy like this.

  • jsn55

    Well, I understand what he bought, but even if the hotel was listed as non-ref, surely it would be covered under the trip insurance he purchased? He paid $258 to insure just the flight? This seems like a gigantic snarl where the traveller is left holding the bag.

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