A hotel room, a perishable item? Huh?
So, you book an airline ticket to travel in a few weeks. It costs you £150 one way.
The terms are for no refunds, no changes, and no transfer to another person.
Why is that?
Because airline tickets are ‘perishable items’. The value disappears after the due date as the ‘product’ no longer exists for sale.
Imagine that you own a plane.
It costs you a fixed amount per month to own it (lease, fixed overheads etc). You pay the crew, the airport costs, the fuel etc per trip. All these costs are total amounts regardless of how many passengers you carry. So, provided you sell enough tickets you will break even and if you sell more than the minimum, you make money.
Airlines vary their prices based on booking rate, proximity to travel time and how may tickets have already been sold. Why? To first make sure they are at break even, then to ensure they make a profit.
Everybody knows, that right?
Nobody expects an airline to give e refund because you can’t make it, do they? You can’t go on your trip, so you either contact the airline and go through a process to change the booking (if its not past the point where this isn’t possible) and pay a free for the privilege, or you claim on your travel insurance or you take the hit.
Hotels, B&B’s, guest houses and self-catering accommodation are the same.
The time slot you can stay, is fixed in time. Once its sold, it is taken off sale and so cant be bought by anyone else. That makes sense if the guest turns up and or pays. If they don’t, and this does happen, it’s an actual loss for the hotelier, unless the guest has paid up front or unless the hotelier can re-sell the room/accommodation again before the date of the stay.
How come, people treat hotels and airlines different with this?
We run a hotel and in any typical year, we will get a small % of people who can’t come as booked. Mostly, we can work this out either by putting the room back on sale and refunding the original guest if its sold (nobody loses) or by agreeing to a change to the booking date, if its far enough in advance for us to take a chance on re-selling the room. We’ll sometimes use our discretion depending on the circumstances, and how the guest approaches it, mainly because we are humans and also its good business to provide good customer service, even to folks wanting to cancel. A small percentage aren’t too happy, because they could end up losing their money and seem to have the belief that because we have a nice house (we happen to live here too and yes, it is nice – but we have a mortgage like most people and in our case it’s quite a big one) that we can “afford it, because you are charging so much anyway”.
We can only sell our room night once. If it can’t be re-sold before the day , it’s an actual loss.
Let’s say you book a room with us, to stay in six weeks’ time. You begin to look forward to it, you make plans for where you are going to eat etc, all good. The whole time, the room is booked for you and so (obviously) no-one else can book it. Let’s say we are fully booked that weekend, so all is good. Anyone looking to stay the same time won’t be able to book with us because we are full. So any potential customers will look and book elsewhere. Happy days.
So, a week before your trip, your boss asks you to work late that Friday to attend an important dinner. These things happen right? You are not going to argue, as much as anything it will be good fun as your partner is invited too. Either way, you now can’t come to stay at our place, at least not that weekend.
So you ring us up, or more likely email us and tell us that you can’t come and you’d like a refund as you will now no longer be able to ‘enjoy’ the booking you paid for.
We say. Hmm, that could be tricky as the room may not re-sell in time. We will try though and if it does get booked out to a new guest, we’ll refund you, less the charges we have to pay, to make a refund (the card company doesn’t do this for free).
You say, but I won’t be attending and so I won’t be able to ‘enjoy’ the thing I booked. That means you must refund me.
Well, yes if the terms you booked with allow it, but not if free cancellation is not allowed.
Well, I’m going to give you a bad review, they say…….
The moral of this story. Hotel rooms are a perishable item. Once booked they are taken off sale and if a guest wants to change their date or cancel then its only fair that they take the hit, not the property owner. After all, it’s not the hotelier’s fault and if it is not re-sold, it is an actual loss. Why should a hotelier take a loss for someone else’s situation changing? Isn’t that what insurance is for?
Please don’t get angry with hotels, B&B’s guest houses, or self-catering accommodation providers when they stick to their no refund policies. They are just trying to make sure that they don’t lose money.