Go Back   > > >
 
Thread Tools Search this Thread
Old Oct 27, 13, 8:47 am   #1
Original Poster
  
Join Date: Jan 2010
Posts: 66
Legality of the no-show cash fee policy for award bookings

Recently, I was charged an outrageous fee of $400 for a hotel room that averages around 100 as a no-show fee. I am a Hyatt Diamond and fought it with the hotel (which initially refused to reverse it) and then on their facebook page, Twitter page and on the survey. The charge has seen been removed. My initial booking was with points (8K). My question is what is the legal basis for the charge if this were to happen again? When I book the hotel there is some verbiage around that I assume but can this stand from a legal basis? Nowhere do they spell out the exact charge but even if they did is it legal?
If I book a suite in Paris using points and they charge me 2.5K for no-show will it still stand? I understand if they take the points for the booking but since I never agreed to pay the dollar charge and transacted with points is this policy legal? I read some post on SPG in the past where this happened to someone else as well but dont remember the details.

Last edited by saaru; Oct 27, 13 at 10:05 am
saaru is offline   Reply With Quote
Old Oct 27, 13, 9:26 am   #2
Hyatt Contributor Badge
  
Join Date: Jul 2010
Location: Between AMS and BRU
Posts: 8,781
This is how it normally happens.... even on redemption stays the no-show will normally be cash. Rather easy to avoid though, cancel in time or don't book with points if you don't know if you will make it.
On the legality I'm not sure. Seems excessive, but I doubt there will be many cases where people ended up paying the full amount.

But the biggest problem I have with this is that there is no way of knowing what the cancellation policy is because you never get the full details in your confirmation mail, nor are they easy to find anywhere else (if at all).
RTW1 is offline   Reply With Quote
Old Oct 27, 13, 10:02 am   #3
Original Poster
  
Join Date: Jan 2010
Posts: 66
Quote:
Originally Posted by RTW1 View Post
This is how it normally happens.... even on redemption stays the no-show will normally be cash. Rather easy to avoid though, cancel in time or don't book with points if you don't know if you will make it.
On the legality I'm not sure. Seems excessive, but I doubt there will be many cases where people ended up paying the full amount.

But the biggest problem I have with this is that there is no way of knowing what the cancellation policy is because you never get the full details in your confirmation mail, nor are they easy to find anywhere else (if at all).
I narrowly focused my question on the legality of charging a fee without disclosing it or without my express approval (I did try to cancel but didn't check to see if I got the email confirmation and it showed up as not canceled). When I buy a plane ticket I agree to the pay the ticket price in dollars (cash) or points. If I don't show up for the flight they cant charge me the unrestricted fare price. Question is if this is legal and if its disputed in court whether it will stand.

Last edited by saaru; Oct 27, 13 at 10:09 am
saaru is offline   Reply With Quote
Old Oct 27, 13, 10:18 am   #4
FlyerTalk Evangelist
  
Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 31,535
The sole question is what OP contracted for. Many contracts have liquidated damages clauses and they are entirely legal in all 50 states (I am presuming that OP is in the USA and the property in question is in the USA).

Bottom line, read the t&c. If it includes a $400 cash cancellation fee and you don't like it, don't book it. But, once you agree to it by checking the little box, you've agreed. If you haven't read everything, that's fine too. Just don't expect that your decision not to read gets you off the hook.

The air ticket example doesn't work because no carrier I know of does what OP suggests. But, a carrier could. It would simply need to disclose the deal in its COC & fare rules, e.g., "if you no show on your $100 ticket, you owe us $1,000 and you authorize us to charge your CC on file for the $1,000."
Often1 is offline   Reply With Quote
Old Oct 27, 13, 10:36 am   #5
FlyerTalk Evangelist
  
Join Date: May 2003
Location: AA Plat / UA NOTHING / Alaska 75K / Hyatt Diamond / SPG LT Plat / Marriott Gold / Priority Club Plat / Hertz Pres
Posts: 14,055
Quote:
Originally Posted by saaru View Post
I narrowly focused my question on the legality of charging a fee without disclosing it or without my express approval (I did try to cancel but didn't check to see if I got the email confirmation and it showed up as not canceled).
Well, if the no show cost was buried somewhere in the cancellation policy (where it usually is located in my experience) then by agreeing to the cancellation policy, you would have agreed to the no show charge.

Quote:
Originally Posted by saaru View Post
When I buy a plane ticket I agree to the pay the ticket price in dollars (cash) or points. If I don't show up for the flight they cant charge me the unrestricted fare price. Question is if this is legal and if its disputed in court whether it will stand.
But when you buy the plane ticket, you agree to the CoC of the airline. They are bound by it as are you. It may be extremely fine print and it may not be carefully explained but it's there and you've agreed to it.

All that being said, charging $400 to no show for a $100 per night hotel is crazy steep. If you were cancelling a 2. 3 or 4 night reservation that's one thing. If it was simply a one night reservation, that's another.

Which reminds me of my latest pet peeve - the early departure fee.

Just my two cents.

Last edited by fireworksboy; Oct 27, 13 at 10:48 am
fireworksboy is offline   Reply With Quote
Old Oct 27, 13, 11:03 am   #6
Original Poster
  
Join Date: Jan 2010
Posts: 66
Quote:
Originally Posted by Often1 View Post
The sole question is what OP contracted for. Many contracts have liquidated damages clauses and they are entirely legal in all 50 states (I am presuming that OP is in the USA and the property in question is in the USA).

Bottom line, read the t&c. If it includes a $400 cash cancellation fee and you don't like it, don't book it. But, once you agree to it by checking the little box, you've agreed. If you haven't read everything, that's fine too. Just don't expect that your decision not to read gets you off the hook.

The air ticket example doesn't work because no carrier I know of does what OP suggests. But, a carrier could. It would simply need to disclose the deal in its COC & fare rules, e.g., "if you no show on your $100 ticket, you owe us $1,000 and you authorize us to charge your CC on file for the $1,000."
I read and read it and no where does it list the actual amount. additionally I would want to know whether this can stand Legal scrutiny. it's one thing to have it in the contacts but it's another thing to have it legally enforcAble. I would understand if thEy charged me 8k pts which would be fair. The rationale I was given for the initial charge for that they had a special event going on that weekend.
saaru is offline   Reply With Quote
Old Oct 27, 13, 11:13 am   #7
Hyatt Contributor Badge
  
Join Date: Jul 2010
Location: Between AMS and BRU
Posts: 8,781
I really wonder where you read it.... I wasn't able to find a single hotel cancellation policy online for the hotels I have currently booked.

Some are a bit more clear in the text when booking but some are something like "cancel until 24hrs day before arrival" or "subject to the hotels cancellation policy". Hardly any mention what the penalty is for cancelling late or not showing up at all. Some do state "one night penalty" but how to value that seems up to them.... and really nothing for award bookings.

This is also interesting, although a bit short on facts (also only a reference to the hotels cancellation policy without any content of what that is): http://www.dealyst.com/blog/overview...tion-policies/
But it's clear you are not only on the hook for your points or the daily rate, it seems quite common to also charge a no-show fee.

And if done within reason, I must say I can hardly blame them.

Last edited by RTW1; Oct 27, 13 at 11:19 am
RTW1 is offline   Reply With Quote
Old Oct 27, 13, 11:17 am   #8
Original Poster
  
Join Date: Jan 2010
Posts: 66
Quote:
Originally Posted by Often1 View Post
The sole question is what OP contracted for. Many contracts have liquidated damages clauses and they are entirely legal in all 50 states (I am presuming that OP is in the USA and the property in question is in the USA).
This is from WikiPedia on liquidated damages:
"At common law, a liquidated damages clause will not be enforced if its purpose is to punish the wrongdoer/party in breach rather than to compensate the injured party (in which case it is referred to as a penal or penalty clause).[2] One reason for this is that the enforcement of the term would, in effect, require an equitable order of specific performance. However, courts sitting in equity will seek to achieve a fair result and will not enforce a term that will lead to the unjust enrichment of the enforcing party.[3]
In order for a liquidated damages clause to be upheld, two conditions must be met:
First, the amount of the damages identified must roughly approximate the damages likely to fall upon the party seeking the benefit of the term.[2]
Second, the damages must be sufficiently uncertain at the time the contract is made that such a clause will likely save both parties the future difficulty of estimating damages.
"

Based on that, I don't think the 1000 fee for a flight for no-show on a 100 dollar ticket or a 400 dollar charge on 100 dollar night fees should stand legal scrutiny? Valid? They are compensated by the 8K points - there are no additional losses to the hotel if I don't show up.
saaru is offline   Reply With Quote
Old Oct 27, 13, 11:38 am   #9
Hyatt Contributor Badge
  
Join Date: Jul 2010
Location: Between AMS and BRU
Posts: 8,781
Quote:
Originally Posted by saaru View Post
Based on that, I don't think the 1000 fee for a flight for no-show on a 100 dollar ticket or a 400 dollar charge on 100 dollar night fees should stand legal scrutiny? Valid? They are compensated by the 8K points - there are no additional losses to the hotel if I don't show up.
Please stop doing that... plenty of threads already where people presume they can figure out the law. It's real information we want here not idle speculation of a wannabe lawyer. I'm pretty sure we can do that ourselves as well . It's not about what's reasonable, it's about what's agreed or enforceable.

Pretty long thread a few months ago about hotels in CA and NY that cancelled reservation during special events without providing any form of compensation. Something nobody really finds reasonable, but that doesn't matter since the law allows it.

Last edited by RTW1; Oct 27, 13 at 11:44 am
RTW1 is offline   Reply With Quote
Old Oct 27, 13, 12:15 pm   #10
Original Poster
  
Join Date: Jan 2010
Posts: 66
Quote:
Originally Posted by RTW1 View Post
Please stop doing that... plenty of threads already where people presume they can figure out the law. It's real information we want here not idle speculation of a wannabe lawyer. I'm pretty sure we can do that ourselves as well . It's not about what's reasonable, it's about what's agreed or enforceable.

Pretty long thread a few months ago about hotels in CA and NY that cancelled reservation during special events without providing any form of compensation. Something nobody really finds reasonable, but that doesn't matter since the law allows it.
Please stop doing what? I am not trying to be a wannabe lawyer. All I want to do is to ascertain in case of an unforeseen situation in the future if I have a legal recourse.


The underlying question is , is this enforceable? What if an airline had a similar contract, can it be enforced? What if an electronic store had a contract where I buy a 500 dollar tv and don't show up to pick it up the day i agreed to, can they charge me a punitive fee of 1000?

Additionally, if I transacted in a certain currency, can I be asked to pay in another format? Can that be enforced?

I don't know what the background of what the hotels in CA and NY did. However, if I had a room in Maldives or Paris or some extremely expensive hotel, can they legally gouge me for any amount they deem necessary even if the said hotel room was booked using points and the terms and conditions are vague and don't specify a dollar amount. Even if the contract did specify a dollar amount for a no-show fee, can they still do it?

Last edited by saaru; Oct 27, 13 at 12:24 pm
saaru is offline   Reply With Quote
Old Oct 27, 13, 12:48 pm   #11
  
Join Date: Nov 2011
Location: California
Programs: Hyatt Whateverist, Starwood LTP, Marriot Platinum (SPG merge)
Posts: 1,702
Quote:
Originally Posted by Often1 View Post
The sole question is what OP contracted for. Many contracts have liquidated damages clauses and they are entirely legal in all 50 states (I am presuming that OP is in the USA and the property in question is in the USA).

Bottom line, read the t&c. If it includes a $400 cash cancellation fee and you don't like it, don't book it. But, once you agree to it by checking the little box, you've agreed. If you haven't read everything, that's fine too. Just don't expect that your decision not to read gets you off the hook.

The air ticket example doesn't work because no carrier I know of does what OP suggests. But, a carrier could. It would simply need to disclose the deal in its COC & fare rules, e.g., "if you no show on your $100 ticket, you owe us $1,000 and you authorize us to charge your CC on file for the $1,000."
The problem here is if the cancellation policy doesn't specify a specific fee. You can't make an informed decision if you don't know how much it is.
JackE is offline   Reply With Quote
Old Oct 27, 13, 1:57 pm   #12
FlyerTalk Evangelist
  
Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 31,535
Putting the wannabes reading Wikipedia aside,

1. You know there's a fee, but you don't do anything to figure it out. Tough.

2. You contract for something and then ask if it's legal. Presume it's legal. Rarely in the USA are contracts overturned, other than in the Court of FT.
Often1 is offline   Reply With Quote
Old Oct 27, 13, 2:43 pm   #13
Original Poster
  
Join Date: Jan 2010
Posts: 66
Quote:
Originally Posted by Often1 View Post
Putting the wannabes reading Wikipedia aside,

1. You know there's a fee, but you don't do anything to figure it out. Tough.

2. You contract for something and then ask if it's legal. Presume it's legal. Rarely in the USA are contracts overturned, other than in the Court of FT.
1- the burden of figuring out a fee should not lie with a consumer. It should be exactly spelled out. Thats why the legality issue comes to play in part.
2- I didn't contract anywhere to pay a 400 dollar fee. I will leave aside the assertion that contracts are rarely overturned but would state that I have seen otherwise.

Let me add a 3rd because the legality of this is dubious at best. Here I am asked to pay for something for an action I didn't undertake above and beyond the payment for the initial contract. If this is legal can an electronic store charge me 1000 for a 500 dollar TV that I didn't pick up on a timely basis? I would doubt the legality of such a contract even if it was clearly spelled out.

Last edited by saaru; Oct 27, 13 at 3:04 pm
saaru is offline   Reply With Quote
Old Oct 27, 13, 3:17 pm   #14
  
Join Date: Apr 2004
Location: BOS
Programs: Marriott Plat, SPG Plat, Hyatt Explorist-in-exile, HHonors Gold, AA Plat, Nat'l Exec
Posts: 3,091
Leaving aside the legal arguments, at least one other chain (SPG) has started charging no-shows on award rooms in points.

That seems like a much more fair policy; the whole point of a no-show fee is to compensate the hotel for the loss of the revenue they expected for the night. If they expected to be reimbursed for a points stay (said reimbursement generally being much less than BAR) it isn't reasonable for them to expect to be compensated rack rate.
dtremit is offline   Reply With Quote
Old Oct 27, 13, 3:40 pm   #15
nnn
  
Join Date: Jan 2005
Location: San Francisco
Programs: All-Around Kettle
Posts: 2,852
Nobody here can tell you the legality as a blanket matter, because even if the legal answer were out there, it would depend on the jurisdiction whose law controls. In the U.S., the question could be a matter the law of the state in which the hotel is located, though you could potentially agree to have a different state's law apply in the booking contract. Each state can theoretically handle the issue differently.

That said, contract law is, generally speaking, relatively universal in the U.S., but hotel law is not. If there is something in the booking contract, that controls. If the contract mentions a no-show fee but is silent on the actual amount, then it would be up to the court to decide what that fee ought to be, likely based on how much of a fee you are implicitly presumed to have agreed to. The no-show amount the OP quoted sounds rather steep, but that's just my personal opinion based on the facts as presented in the OP.

If this came down to "liquidated damages," I suspect the answer there would be $0, since the hotel was already compensated for the room in points. Perhaps the hotel could have an argument to tack on the average profit it would have expected from additional purchases by the guest, such as from room service, spa treatments, etc., but the OP seems to have been charged much more than I suspect that number would be.

This is not legal advice.
nnn is offline   Reply With Quote
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Thread Tools
Search Thread
Go to Top
Forum Jump
Contact Us - FlyerTalk - Archive - Top