How To Approach Dishonored Reservations With Hotels

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.

In this video, you'll learn how to approach dishonored reservations at your event hotel, how to navigate the Walk Clause with your hotel partner in your contract.

Check out what Barbara Dunn (Partner at Barnes & Thornburg LLP, representing groups) and Lisa Sommer Devlin (Devlin Law Firm, P.C. representing hotels) have to say in Legalease With the Ladies- powered by HopSkip!

Video Transcript:

How to approach dishonored reservations with hotels 

Barbara: Hi, I'm Barbara Dunn, an attorney that works with groups in connection with their meetings travel and hospitality contracts.

Lisa: And I'm Lisa Sommer Devlin, an attorney that represents hotels and resorts regarding convention and event contract matters.

Barbara: And together, we're Legalease with the Ladies powered by HopSkip. Often groups are concerned that there won't be any room at the end when their guests check in for their meeting. Many of you are familiar with the concept of walking or dishonored reservations. But when hotels fill up and in some cases over, so it may be the case that one of your guests checks in or attempts to check in. And there isn't the room for them and that's the so-called walk clause. That's going to be the focus of our topic today on the video. From a group standpoint when I work with many groups, they like to say, ‘I want a clause in the contract that says you will not walk our attendees.’ And my position and my response back is, ‘That's all well and good but if it happens anyway then what.’

So, it's like that "planning the contingency" just as we talk about with so many other contingencies in hotel contracts. I personally think the best strategy is to discourage the hotel from walking your guests, but also put the onus on the hotel to provide certain benefits to that guest. Certainly typically, the hotels will provide accommodations, transportation, etc. Many groups look to enhance that list just to make sure that their attendees are accommodated. And really and most importantly has been my experience that the group needs to hear about a walk situation first before an attendee comes in. That's also something to manage. But those of you who work with the "I’m either not going to address walk in the contract because I don't want them to walk my attendees" or "I’m going to say you won't walk my attendees", I think you're really doing a disservice.

I think the best strategy quite honestly is to make it unattractive to walk your attendees and instead potentially walk other attendees. A lot of times people attribute this to oversold situations and hotels like airlines certainly from time to time might oversell as well anticipating a cancellation factor. But what a lot of hoteliers have reminded me over the years is that, walking in a lot of cases is due to not to oversell but to under departed guests. So, guests that might have been held over at the hotel because they couldn't travel back to their home state because of a snowstorm. All those varieties happen and yet the guest that's coming the next day wants to check in. so, there's a whole bunch of circumstances under which walks can occur.

I really recommend in the contract be specific as to what would happen - the process for which the hotel would address a walk situation. But here again, you can't manage everything in the contract. You've got to manage it from a practical standpoint. Talk with the hotel leading into the meeting. See how things are going. Particularly if there's a circumstance where there might be that under departed population that may not yet be able to leave the hotel and really try to manage it from a practical standpoint. Lisa, I've been the victim so to speak of a walk or two before and in my tenure perhaps you have. I know on the hotels part this is something they certainly don't strive to have happen frequently.

Lisa: That's true. I mean hotels don't like to walk guests, because what that means is you've got an unhappy guest trying to check in usually late at night. Because they're one of the last people to get there and they don't want to have to go to another hotel. So, this is not something that hotels want to do or that they regularly do. But as Barbara says, things happen. I’ve had hotels have a pipe break and three floors of the hotel were suddenly out of order. That's nobody's fault, but at that point you've got people with reservations that can't check in because there just aren't enough rooms in inventory anymore. So, it's not just a matter of the hotel overbooking. Yes, Barbara's right. Sometimes hotels take extra reservations because they anticipate there will be cancellations.

But more often it's other issues that come up that prevent the hotel from being able to accommodate all those guests. So, having a clause that says, thou shalt not walk my people isn't going to help you. Because no hotel can realistically promise that. Too many things can go wrong. So, it's better to have that clause as Barbara says that says, ‘This is what you're going to do for my attendees, if they have to be walked.’ And how you're going to treat them when they return. More importantly, how you're going to communicate those issues with us. Because as Barbara said, if the event sponsor knows that this is happening, they can help communicate the message to the people involved and help smooth that process.

Another thing that I see customers request as Barbara said is they want to make their attendees the least attractive to walk. So, they'll build in something to the clause that says, and for every guest you walk you're going to pay the group $300 or some other number. That's probably not legally enforceable, because it's a type of liquidated damage clause that is saying we're agreeing in advance that this is the amount that will be paid. But it doesn't really make sense because most often the group doesn't really suffer any loss if their attendees are walked. Yes, their attendees may be inconvenienced and they may be frustrated. But the attendees know that it's the hotel's fault not the group sponsor's and so the group isn't suffering any loss. That's not going to be legally enforceable.

So again, it's better to have a plus that says, “This is what will happen here's how we'll communicate and avoid those thou shall not walk clauses. Because they aren't going to help you in the long run.

Barbara: Lisa, I agree with you with regard to the enforceability on the credit side, I will note some things that certainly I have had situations over the years perhaps as you have in which the hotel communicates to a guest that it isn't the hotel's fault it's the group's fault. For not booking enough rooms, which of course isn't, the group isn't happy about. That said certainly there's a lot of bells and whistles on that clause beyond the additional room at an alternate facility and transportation. I'm going to chuckle and date myself by saying I recall a time when we were charged for long distance telephone calls. And in fact, in a lot of walk clauses you will see reference to a five-minute long distance call.

I think most of us can call from our mobile device at likely no additional charge. Yet, guest room internet to me is always a sensitive thing. So, if we're going to contact anyone/business contacts, usually having the complimentary guest room internet access is important. Another point that you made Lisa and also to emphasize is the fact that if a guest is walked and chooses to stay at that walked property (the alternate property), even though the hotel has notified that guest that they do have another room the next day, then I agree it isn't the hotel's responsibility at that point. But up until that, it really is an obligation on the hotel's part for each day of the reservation in which the hotel can't accommodate the group. Lisa, anything else to add?

Lisa: I agree with you and I always chuckle at those two free phone calls. I don't know why that stays in the clause people still do it all the time and I say, ‘Well okay nobody ever takes advantage of that’. The other thing that you might want to add to your clause which usually goes without saying but people like to put it in there is that to the extent the hotel walks people from your event, you should receive credit for them towards your performance,  complimentary rooms, whatever else is dependent on the number of rooms that you occupy. I agree with you the hotel should never tell the guests that it's the group's fault. That may be just a front desk person that's trying to get somebody off of their back. But no, that's not an appropriate thing to say. Walks happen there's no way you can prevent it but being in good communication with your hotel partner is the best way to handle that kind of situation.

This has been Legalease with the Ladies. Thanks for joining us. Please leave your comments below and we'll look forward to seeing you on our next video.

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.