Travel Troubleshooter: When hotel shuts, must it reimburse other costs?

12/08/2013 12:00 AM

12/05/2013 6:07 PM

I’m hoping you can help me. My entire extended family booked an expensive vacation at the Veranda Resort in Turks and Caicos for a week. My immediate family had stayed there last spring and we loved it. When we booked it, it was managed by Grace Bay.

We found out less than a week ago that it was being taken over by Beaches, which is owned by Sandals, and was being shut down, and that they were refunding our deposit (although we haven’t seen a penny of the $16,000 yet). Beaches would not reimburse us for our flights or any expenses associated with rebooking elsewhere. Our travel insurance also would not pay for any of our expenses.

Our travel agent was able to rebook us at Round Hill in Jamaica, which seems amazing, but there are a lot of associated fees. Change fees for the flights alone are several thousand dollars.

What are our rights? We think that Beaches should reimburse us for our out-of-pocket expenses. I’m a lawyer, but strongly suspect we don’t have any clear contractual rights. How can we get them to make us whole? Thank you for any help you can give.

– Miriam Ingber, New York

When a hotel cancels your stay, it owes you a full and immediate refund of your deposit. I’m a little surprised that Beaches hasn’t given you your money back yet. Beyond that, it’s whatever you can negotiate. Generally, a hotel has no legal obligation to cover the additional costs you incurred. But that doesn’t mean it shouldn’t try to make you whole.

Normally, when a hotel is overbooked it will “walk” a customer to a comparable hotel and pay for the room; in other words, it will make sure you don’t incur any additional expenses as a result of its overbooking. This is a similar situation. I think you can make a case for asking Beaches to cover some of the costs of moving to Round Hill.

The most effective way to do that is through a brief, polite email to the company. I reviewed the letter your travel agent and you sent to Beaches. They were not brief, and in your letter, you mentioned that you were an attorney and suggested you might take them to court.

It’s true that some companies will roll over when threatened with a lawsuit. But not all of them. For example, when someone threatens me with a lawsuit, I have the opposite reaction. It makes for some interesting stories.

Anyway, I might have taken a softer approach to your request for compensation. If that doesn’t work, you could have threatened Beaches with legal action later.

I contacted the company on your behalf. It offered to pay you $3,800, which covers your flight change fees and 20 percent of the cost of the new hotel.

By the way, this case was resolved a few months ago, and since then, Beaches Turks and Caicos Resort Villages and Spa (www.beaches.com/main/tc/tc-home.cfm) has since opened, and it looks lovely. I’m sure you would have enjoyed your stay there. You also signed a confidentiality agreement with Beaches when you accepted its settlement, and for the record, it should be noted that you provided all this information to me before you signed the agreement.

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