How to Claim Hotel Compensation for Overbooked Rooms

Picture this: You arrive at your hotel after a long flight and Uber, only to hear, “Sorry, we overbooked your room!” 

It’s frustrating, but the hotel shouldn’t just leave you high and dry. And depending on their customer service policy, they may even compensate you for the inconvenience.

Generally, the hotel will offer you alternate accommodations at a nearby property — perhaps even from another hotel brand if necessary. But you don't always have to accept their first offer. 

If you get “walked” (the hotel industry lingo for moving you to another hotel due to overbooking), you may be entitled to refunds, room upgrades, loyalty points, and more. 

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Why Do Hotels Overbook Rooms?

It may seem odd to find out your hotel is overbooked even when you have a reservation. But just like airlines, hotels overbook to account for no-shows and cancellations. 

In many cases, the math works out and there are enough rooms for everyone. Occasionally, however, too many guests try to check in, to the point where no accommodations are left.

The business of overbooking 

From a business perspective, overbooking is valuable for hotels. 

Approximately 1-2% of hotel bookings are no-shows, which costs the industry $50 million to $100 million per year, according to Visa. 

Even if no-shows still pay for the rooms, there could be losses associated with guests spending money at hotel restaurants and other amenities. 

Plus, there's an opportunity to earn even more by booking guests to fill those empty rooms.

As such, hotels often overbook so they still end up at full capacity, even after no-shows and late cancellations. 

Common scenarios when overbooking occurs 

Overbooking can happen when there's a large influx of guests over a short period, such as for weddings, conferences, holidays, or during peak travel season. 

Overbooking can also happen due to errors, like if a hotel employee double-books a room by accident. 

Or it's possible there's an error where a guest pays for a room through a third-party booking platform, but the hotel never receives that reservation.

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Your Rights When Your Hotel Is Overbooked

When your hotel is overbooked, you don't have quite as comprehensive protection as you do with overbooked airlines. 

That's because airlines have strict rules they have to follow as defined by the Department of Transportation (DOT), whereas hotels operate under a patchwork of local, state, and federal laws. 

Some hotel brands have their own policies for overbooking, but much depends on the situation.

What hotels are obligated to provide

First things first: Hotels are under no legal obligation to rebook you if they’re overbooked. The only thing they are required to do is refund you any prepaid fees.

That said, it’s still industry standard for a hotel to provide you with alternative accommodations that are of equal or better quality than the room you reserved. 

This might mean moving you to another nearby property of the same hotel brand, or they might reserve a room for you at another brand if necessary.

If you have any additional costs associated with changing hotels, such as transportation to the new property, the original hotel might reimburse you for these expenses. But this depends on the hotel’s customer service policy.

Compensation you may be entitled to 

There's a lot of gray area in terms of what compensation you may be entitled to. 

You may be able to negotiate things like an upgrade, free meals, or extra nights at the new hotel. Or you might receive these perks for a future visit to the original hotel.

If the overbooked hotel has a loyalty program, you also might receive rewards points for the inconvenience. 

For example, Marriott says if you have elite status, they’ll compensate you up to 140,000 rewards points and up to $200, depending on your status level and the hotel brand. This is in addition to paying for your accommodations for the night at a nearby hotel.

Much of this compensation depends on the situation, the hotel chain, and even who's working the front desk at that time. 

But some factors, like your loyalty status and the magnitude of the inconvenience (e.g., if your hotel is changed for one night versus seven) can affect compensation, too.

Steps To Claim Compensation for Overbooked Rooms

If you find yourself getting walked, don't panic. Follow these steps to try to maximize your compensation:

Stay calm and communicate professionally 

Much of the compensation is up to the discretion of front desk staff or hotel managers. If you stay calm and communicate professionally, you can often get further than if you get angry. 

These workers are just trying to do their jobs, and you're just trying to enjoy your travel, so if you can be respectful and connect on a human level, they're more likely to sympathize and help you out!

Still, you don't have to leave everything up to what the staff suggests. If you can clearly and politely state what compensation you want, such as an extra night at the new property to account for the lost time you spent changing hotels, then you may be more likely to receive it.

Document everything 

Be sure to document everything related to reservations and compensation. Have your booking confirmation handy and receipts if you prepaid before arrival. 

If you booked through a third party, have that information and be ready to contact them if needed — they may offer guarantees that they'll honor if the hotel won’t.

For example, Booking.com says if a hotel you booked with them can’t offer you a suitable alternative, their customer support team can help you choose another hotel. If the new hotel is more expensive, they’ll refund you the difference.

Also save any emails, texts, or other written communication you had with the property before your arrival, which can help you make your case.

Then, document any new compensation and alternative arrangements, such as receipts for a taxi or rideshare to the new hotel and a copy of the bill. 

Ask staff at the original hotel to put any compensation offers in writing. For example, they may email you that you're entitled to a free night at that property anytime within the next year.

Escalate if necessary 

If the hotel staff isn't giving you what you want, consider escalating the situation before leaving the property. 

Politely tell the staff that you're not going to the new hotel until you contact corporate customer service (if applicable), as they may be in a position to offer you better compensation.

If you still aren't getting anywhere and need to leave, you can try to escalate the situation afterward, but your chances often diminish after the fact. You could file a complaint with the Federal Trade Commission or a state consumer protection agency if the hotel didn't honor their contractual obligations.

If you're still not getting what you want, consider going the legal route. While this might not be worthwhile for a one-night stay, getting an attorney involved for an expensive trip could be worth it.

Tips for Negotiating Better Compensation

There can be a lot of leeway in compensation for overbooking, so here are some ways to try to get more than the average person.

Ask for perks beyond a refund

A refund is great for you, but not so great for the hotel because they're losing money directly. 

However, you might be able to get more value without asking the hotel to give your money back, which can be a win-win situation. For example, you can request room upgrades — say hello to the Presidential Suite you never would have booked otherwise!

You can also ask for additional free nights, especially if you're being walked to a hotel under the same brand, or you can request vouchers for future stays. Staff might have permission to offer these, but not refunds.

Other ideas include asking for perks like meal credits or spa passes, which again have a lower direct cost to hotels but can offer a lot of value to you.

Use loyalty status to your advantage 

The higher your loyalty status, the more leverage you typically have, as hotels don't want to lose your future business. 

Politely mention your loyalty status and/or future travel plans with that hotel so staff are more incentivized to meet your compensation requests.

If you have a hotel credit card with that property, you may already have automatic elite status, which could mean better perks and compensation.

COMPARE: Best Hotel Credit Cards

How Travel Insurance and Credit Cards Can Help

You might be able to receive compensation from your travel insurance or the credit card you used to book the property. 

Travel insurance coverage 

It depends on the specific policy, but some travel insurance policies offer reimbursements for alternative accommodations or transportation costs if the original hotel doesn't honor the reservation. 

In addition to traditional overbookings, this could help in a situation like a technical error with the booking system, where the hotel claims you never made a reservation and thus won't offer you compensation for alternative arrangements.

If you don’t have a preferred travel insurance company, you can use an online broker like VisitorsCoverage to search for the right policy for your next trip.

Credit card benefits for hotel disruptions 

Your credit card can also provide travel protections, including for situations where your trip gets interrupted but isn't overbooked in the traditional sense. 

For example, the Chase Sapphire Preferred® Card comes with travel insurance that may cover situations when severe weather affects room availability at a hotel you booked.

Even if a specific perk isn't listed, contact your credit card company to see if they can help in some way. Some premium credit cards will go above and beyond for cardholders, such as booking you alternative accommodations at a hotel they have a corporate partnership with.

Or, if you have a co-branded hotel credit card, you could be automatically entitled to extra compensation. For example, the Marriott Bonvoy Boundless® Credit Card gets you automatic Silver Elite status, which offers points and cash compensation if a hotel under the Marriott brand is overbooked.

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FAQs About Hotel Overbooking Compensation

Should the overbooked hotel cover my transportation to the new location?

While hotels should cover your transportation as a show of good faith, there’s no guarantee they will. It depends on the hotel’s customer service policy and whether you’re a loyalty member with them.

If the hotel won’t reimburse you for the costs, you may be able to file a claim through your travel insurance or credit card. 

Can I request compensation from the overbooked hotel even if I accept alternative accommodations?

Yes, you can request compensation even if you accept alternative accommodations — but that doesn’t mean the hotel will give it to you. 

Ask politely and keep in mind that your best chances of receiving compensation come before leaving the original location.

Does travel insurance cover overbooked hotels?

Some travel insurance covers overbooked hotels, but it depends on the policy. Travel insurance might also cover other incidents where hotel accommodations are unavailable, such as due to weather.

TL;DR: Getting Compensated for an Overbooked Hotel

Finding yourself getting walked from an overbooked hotel is a major inconvenience, but knowing your rights helps ensure you receive fair compensation for your troubles. 

To maximize compensation, document everything, negotiate confidently and politely, and see whether your travel insurance or credit cards provide additional protection.

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Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.