When Is a Reservation Actually a Reservation? : Hotels: Overbooking is an age-old reality as operators try to assure full capacity. New legislation may provide some guaranteed relief for consumers.

It’s late at night. You’ve just arrived, tired, in a strange city. A taxi takes you downtown to the hotel where you think you have a reservation.

When you get to the hotel, you head straight for the front desk. You give the clerk your name. He checks his computer.

“I’m sorry, sir, I don’t see your reservation, and the hotel is sold out.”

You argue that you made a reservation days, or weeks, ago.

The clerk is not budging. You’re out of a room, and, for all practical purposes, you’re homeless.

As Karl Malden so frequently asks, “What will you do?”

What protection do you have that the hotel reservation you made will be honored?

Answer: virtually none.

Hotel overbooking is as old as the hotel business itself. Like the airlines, hotels try to protect themselves by intentionally overselling their rooms, anticipating a certain percentage of no-shows.

It is an understandable practice. A hotel room, like an airline seat, is a precious commodity. Once an airplane takes off with an empty seat, or a hotel room goes unoccupied for a night, that is revenue forever lost to its owners.

As a result, the airline and hotel industries have developed special “yield management” programs to try to project what airline loads and hotel occupancies will be on specific nights, days and months of every year.

Sometimes the projections work. And sometimes they do not.

In the airline business, overbooking fails when other flights are delayed or canceled, and during peak holiday seasons.

In the hotel business, overbooking fails when guests already in the hotel decide to extend their stays, when the weather is bad, and when the city where a hotel is located is host to a major event, i.e., a political convention or athletic contest.

With conventions and sporting events, intentional hotel overbooking often leads to outright price gouging when so-called “room speculators” reserve blocks of rooms months in advance, and buy and sell them like options to the highest bidder. Such was the case in New Orleans during last January’s Super Bowl.

Overseas, travelers get absolutely no protection from overbooking practices of many privately owned hotels, especially during peak summer travel months. There are dozens of horror stories told by tourists who arrive at their destination, sometimes with a written confirmation in hand, only to be told by an arrogant desk clerk that officially the rooms are no longer available.

It’s one thing to be left high and dry in Pittsburgh after a two-hour flight from Chicago. It’s another to be stranded in Paris after an 11-hour flight from San Francisco.

Of course, many times the rooms are available . . . if the tourists are willing to negotiate a slightly higher rate, that is.

In the United States, the situation is slightly better. As a general practice, few hotels overbook their rooms by more than 8% (which is an average no-show factor).

Many hotel chains, such as Hilton, Sheraton and Hyatt, have codified strict policies concerning when a guest must be “walked,” to where and for how much.

Generally, if you have a confirmed reservation and are bounced from one of these hotels, the hotel will pay for your transportation to another hotel, pay for your room at the other hotel, and, in many cases, pay for a long distance phone call so you can tell at least one person where you aren’t staying.

But unlike denied-boarding compensation rules that govern airline travel, there are still no industry-wide guarantees in the hotel business that you will be protected if you hold a room reservation but no room.

Now at least one state legislator is trying to do something about it.

California Sen. David Roberti (D-Los Angeles) has just introduced SB 2082, a law that would require a hotel to provide transportation and alternate accommodations, at the hotel’s cost, if it fails or refuses to provide accommodations “pursuant to a confirmed reservation.”

Under the bill, if a hotel fails or refuses to provide (and pay for) alternate accommodations to a guest who holds a confirmed reservation, that hotel would then be liable for civil damages in the amount of $500 or three times the actual damages, whichever is greater.

Not surprisingly, the hotel industry is not thrilled about the possibilities of this bill becoming law.

“They’re trying to legislate something we already do,” says Alain Longatte, general manager of the Regent Beverly Wilshire. “We already have the same policy the law provides. We know every night that about six to eight of our guests won’t show up.

“But we don’t sell those rooms, just in case. And if we ever have an overbooking situation, we take very good care of our guests.”

A hotel like the Regent Beverly Wilshire, with an upscale (and repeat business) clientele, should almost be expected to do that.

But what about other hotels--hotels with huge turnovers?

“It’s a shame something like this has to be legislated,” says Jerry Golenor, general manager of the Sheraton Plaza La Reina hotel, at LAX. “But this law would have no impact on us. It’s a hotel’s moral obligation that when they take a reservation, they must provide that room.

“To us, it’s more than a moral obligation; it’s a financial one. We can’t afford to have an overbooking situation. It will kill our future bookings, not to mention our reputation. We encourage our guests who have reservations to guarantee them with a credit card.”

Since 1976, American Express has had a program called “Assured Reservations.” Specifically, it means that if you call a hotel to reserve a room, you can guarantee that room--no matter what your arrival time--by charging it to your American Express card.

The good news is that your reservation is guaranteed. But if you don’t show (and don’t cancel by a certain time; the time varies by each hotel, but it’s usually 6 p.m. on the day of scheduled arrival), you are charged for the room on your credit card.

But does the American Express program mean that you’re guaranteed the room you wanted in the hotel where you originally made your reservation? It does not. You are guaranteed a room, but not necessarily the one you had in mind.

Under terms of the program, and similar to the proposed legislation, if a guest with a reservation guaranteed by his/her American Express card shows up and there is no room, the hotel is obligated to provide and pay for a room in a “comparable establishment” for the first night, furnish free transportation to the alternate hotel and pay for a three-minute telephone call.

The best advice: When making a hotel reservation, ask for a confirmation number. Then, on the day you are traveling, call the hotel and talk to someone at the front desk to confirm that you are arriving and any other specific room needs or special services. Get the desk clerk’s name and title.

Then, if you show up and your room has been sold, you have some ammunition. With or without the Roberti law, a hotel reservation is, after all, an implied contract. If it is breached, you should be compensated.

Note: Hearings on the proposed overbooking legislation are scheduled for the week of April 23 in Sacramento.