A reservation gauranteed by credit card is a legal contract and cannot be cancelled except within the time or cancellation but only by the guest or otherwise by agreement of both parties. Therefore, the hotel cannot cancel the reservation. It that were allowed, during times when hotels are fully booked they could simply cancel all of their reservations at low prices and rebook at higher prices leaving guests stranded without the rooms they booked or they could inform their guests with reservations that the price had gone up and they would have to pay more if they wished to keep their reservations.