With Coronavirus, Some Hotels Warn Refunds Could Take 90 Days, an extremely long time for a traveler to wait after a cancellation to receive a deposit or pre-payment. Here's what to do to avoid this situation or to expedite a refund if it happens to you.
While protracted airline and cruise coronavirus refund policies have been the most egregious offenders (see DoT to Airlines: Refund Passengers Within 7 Days), some hotels, particularly resorts that require significant deposits or prepayments, have had their own cash flow struggles. They've put in place these longer than usual refund timelines to try to delay cash outflows and pay their staff and fixed operating costs. That's what prompted this recent offer to one of our clients who had to cancel an upcoming stay (bolding mine):
“If you choose to reschedule your stay with us, we are happy to offer you the following added value, which is available through September 30, 2020. We encourage you to act before September 30, 2020, to take advantage of the most flexible terms and conditions.
- Flexibility with dates throughout 2020 and 2021
- The same rate you originally confirmed, no matter the season, subject to availability and some restrictions
- 200 Euro credit per room, per night for rebookings in September 2020; 100 Euro credit per room, per night for all other rebookings in 2020 and 2021
If you choose to cancel your stay: You may cancel your stay for a full refund (kindly note, that due to extraordinary circumstances, the amount of time required to process refunds/reimbursements may take up to ninety (90) days. We thank you for your patience and understanding.)”
While it's understandable in light of the pandemic for hotels to try to preserve cash on hand as a business goal, it's also understandable that you as a client are likely not amenable to providing free financing to the hotel or resort, any more than you are to an airline or cruise line that is also attempting to delay your refund or push you to take a future travel credit. Here's our advice on what to do:
1. Stick with Reliable Luxury Hotel and Resort Brands
While you should be protected as long as you're using a credit card for payment, it's still frustrating to have to spend time arguing over a prompt refund with an independent or boutique hotel that isn't bound by a larger brand's policies and oversight. And particularly during a pandemic, other aspects, such as proper cleaning and hygiene standards are also more likely to be standardized to a certain level with the better luxury hotel brands.
2. Clarify the Hotel's Refund Timeline Before Booking
Ask the Reservations Manager what the current policy and timeline is for refunding deposits and prepayments when prior to the cancellation deadline. While it's possible this could change between when you make the reservation and when you cancel, you can justifiably argue that you should receive your refund based on the policy in place at the time you made the reservation.
3. Reserve with a Virtuoso or Preferred Partner Travel Advisor
While most airlines and cruise lines at least claimed to be processing refunds in the order in which they were cancelled or by original travel date, our experience with hotels has been different–hotels where we are preferred partners have typically been highly responsive to our requests to expedite a refund. In the above example, which stated that it could take up to 90 days to receive a refund, the refund was initiated from the hotel side within 2 days (keep in mind that it can still take several days from the time the hotel initiates the refund to when it appears in the client's account).
By reserving through a luxury travel advisor and leveraging his or her relationship with the property, you'll improve the likelihood of a prompt refund over and above guests who book on their own.
4. If Repeated Requests Don't Yield a Prompt Refund, Initiate a Chargeback
In two instances this year, we did have to advise clients to issue credit card chargebacks against hotels that refused to promptly issue refunds. One was a St. Regis hotel, another was a Mandarin Oriental hotel. Prior to doing this, we requested the refund multiple times. Both credit card chargebacks were upheld, and the clients received the appropriate credits to their accounts. Credit card companies want to see that you made good faith efforts to resolve the issue with the merchant (and of course that the refunds are owed you, that you're not within the penalty cancellation period) before attempting the chargeback.
If you were told that due to the “exceptional circumstances” of the pandemic a hotel refund could take months, what did you do?
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