Hotel booking websites Booking and Expedia offer hotels more options to provide consumers with an alternative for cancelled bookings such as date changes or vouchers. Koninklijke Horeca Nederland (KHN), which is the trade association of the Dutch hospitality industry, had contacted the Netherlands Authority for Consumers and Markets (ACM) saying that hotel booking websites wrongfully accepted cancellations prompted by the Coronavirus (COVID-19) crisis. According to the trade association, it made the financial problems for hotels worse, since they had to refund all cancelled bookings to their customers.
What is the problem?
Due to the Coronavirus (COVID-19) crisis, many travelers have to cancel their accommodation bookings, because governments around the world have imposed travel restrictions. In their general terms and conditions, hotel booking websites Booking and Expedia have a ‘force majeure’ clause for accommodation bookings. Under this clause, travelers that had made ‘non-refundable’ bookings, too, are still able to get refunds. This may be advantageous to consumers, but it also poses a risk to the survival chances of several hotels.
What is the solution?
ACM has had several discussions with the different parties involved, and has looked into the matter. Hotel booking websites Booking and Expedia are allowed to use the ‘force majeure’ clause in their general terms and conditions. This clause allows travelers that had made ‘non-refundable’ bookings to get refunds. However, the hotel booking websites have already taken a number of measures that have improved the balance between the interests of accommodation owners and those of travelers:
- Hotel booking websites either will no longer offer any ‘non-refundable’ bookings for accommodations, or they clearly indicate that it is at the traveler’s own risk if they nonetheless make a ‘non-refundable’ booking, and ultimately end up not using that booking. After all, it is clear now what the risks are for travelers, and consumers are warned about this when making the bookings;
- Accommodations and booking sites will have more options to make bespoke arrangements with all travelers who have to cancel, such as distributing vouchers or rescheduling their bookings. Consumers continue to be entitled to refunds;
- ACM calls upon KHN to create an industry-wide, standard voucher that meets ACM’s requirements, and that can be redeemed with all participating accommodations.
ACM’s oversight during the Coronavirus crisis
The rules that ACM enforces offer room for collaborations in these extraordinary times, to prevent people and businesses from getting harmed as much as possible. During the Coronavirus crisis, ACM always seeks to strike the right balance between the rights of consumers and the interests of companies.