Friday, 6 Dec 2019

When Your Hotel Is Overbooked, You Might Be ‘Walked’ to Another

The term in the travel industry is “walked.”

That’s when a hotel tells a traveler with a confirmed reservation that it does not, in fact, have an available room and instead books a room for the guest at another hotel.

“Walking” is not new. According to hotel industry experts, however, it has been on the rise as the strong economy drives up hotel occupancy rates. At the same time, hotels have been under pressure to maximize their revenues, experts say. To do that, hotels, much as airlines do, try to predict who will not show up or cancel at the last minute. Sometimes, they guess wrong.

While hotels are not under any legal obligation to the guests they walk, it is industry policy to book guests a room in a comparable property and pay for that room, according to Reneta McCarthy, a senior lecturer at the School of Hotel Administration at Cornell University.

Still, some travelers, like Paul Lanyi, a marketing contractor from Los Angeles, argue that a free night’s stay may not be worth the hassle. Mr. Lanyi said he had a confirmed reservation at the Waterfront hotel in Oakland, Calif., a couple of years ago. But when he tried to check in close to midnight, the front desk employee told him that the property was oversold and no more rooms were available.

To make matters worse, he recalled, the employee said that he hadn’t yet been able to find alternative accommodations. Luckily, the employee was able to secure a room at a nearby hotel, but Mr. Lanyi, who was on a business trip, said he didn’t end up going to bed until 2 a.m. “I had to wake up for an 8:30 a.m. meeting,” he said. “It was not fun.”

The hotel’s general manager, Chris Offutt, said that “during oversold situations, which are infrequent and largely due to high demand in the area, the hotel works to ensure guests are comfortably accommodated at a nearby comparable hotel.” She added, “Waterfront is committed to caring for our guests.”

Ms. McCarthy said, “If you’re a leisure traveler, you might be O.K. staying at another property that you don’t have to pay for. But, she added, “Business travelers aren’t paying for their room anyway, so they don’t care as much.”

While there are no official statistics on how many travelers get walked, and individual hotels are generally mum on the subject for fear of hurting their reputation and business, Bjorn Hanson, an adjunct professor at the Tisch Center of Hospitality at New York University, said a big reason walking was increasingly problematic was because hotel occupancy was at a high.

He said his research showed that 2019 was expected to have the highest hotel occupancy percentage since 1981 — more than 66 percent of the available rooms in the United States were expected to be occupied on an average night. In 2009, by comparison, 54.6 percent of rooms were occupied, according to the travel research company STR. On weekdays this year in business travel markets, Dr. Hanson said, he expected occupancy percentages in the 90s.

“In periods of high occupancy, hotels overbook more hotel rooms, which results in more guests getting walked,” Dr. Hanson said.

Walking is also growing because hotels are under increasing pressure to make as much money as they can, said Rummy Pandit, the executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University in New Jersey. “The supply side is growing faster than the demand side so hotels have more competition,” he said. “And they’re also getting competition from home rental companies like Airbnb.”

STR and Tourism Economics’ forecast for this year projects a 2.3 percent increase in revenue per available room, to $87.94. This would be the lowest year-over-year percentage change in that metric since the end of the financial crisis in 2009.

“In the current climate, hotels will overbook by 10 to 15 percent of their room capacity, which will result in more guests being walked,” Dr. Pandit said. “Properties use revenue management systems that estimate no-shows and cancellations, in additional to several other parameters, but these are only estimates.”

Dr. Pandit estimated that a 500- to 700-room property is likely to walk five guests on high occupancy days.

As to determining which hotels in which city are most likely to “walk” a traveler, Dr. Pandit said: “The probability of being walked is not necessarily dependent on the size of city. It would generally depend on demand and supply of hotel rooms at any particular time, and the specific policy of the operator in terms of overbooking in order to maximize occupancy.”

But, he added, “If you have to pick cities, I would say the chances of being walked are greater in large cities with higher number of year-round peak occupancy days.”

Some hotels try to assuage guests they have “walked” by giving them gifts.

Katie Perkins, who is a front officer manager at the Four Seasons Hotel Westlake Village near Los Angeles, said that when she had to walk a business traveler, she tried to offer something meaningful. “Sometimes, it’s a massage, or, if they want to come back on a personal trip, I offer them an upgrade to a suite,” she said. “The next day, I call them to apologize again.”

Ms. Perkins added some companies that have a contract with the hotel for a negotiated rate include a clause that states that none of its employees can be walked.

How properties decide who gets walked depends on a number of factors. Ms. McCarthy said that men have a higher chance of being walked than women, solo travelers are more at risk than a couple or a family, and travelers with a reservation for one night have a higher chance than those staying multiple nights.

Travelers checking in late in the day also have a greater likelihood of being walked.

Dr. Hanson advised guests with confirmed reservations to arrive at their hotel at or soon after the official check-in time when more rooms are available. “If you’re going to be getting there late, call the property, reconfirm your reservation with a live person whose name you get and tell them when you’ll be arriving,” he said.

Being part of a hotel’s loyalty program, if it offers one, can also protect travelers, and if they are walked, the loyalty program may give them added benefits.

Marriott International, for example, has six tiers as part of its Marriott Bonvoy loyalty program and offers a cash gift card and loyalty points to walked members at all tiers, except the entry level basic. The amounts vary based on the Marriott brand. Walked travelers who are part of the second tier, called Silver Elite, with a reservation at a JW Marriott or W Hotels receive $200 and 90,000 points. If they’re staying at a Ritz-Carlton or St. Regis, they get $200 and 140,000 points.

And, according to a Marriott spokesman, John Wolf, the company always tries to ensure a member’s reservation is honored at the hotel of their choice.

Nonetheless, being a member of Marriott’s top tier didn’t help Zach Honig, the editor at large of the travel site The Points Guy. Mr. Honig said he was walked in October when he checked in for a two-night stay at the Courtyard Santa Monica. “The hotel was willing to put me up at a Le Meridien for one night but wanted me to come back there for the second night, which would have been a pain,” he said.

Following a lengthy back-and-forth with the front desk employee, Mr. Honig managed to get the property to approve a second night’s stay at Le Meridien. “It took a lot of my time and energy, but I have to admit, the compensation Marriott offered helped make the situation better,” he said.

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