Hotel deposit

pmatt_2

I booked a hotel room for 21st December and cancelled it yesterday, 13th June. That's over five months notice.

The hotel took a deposit of £40 when I made the reservation. The confirmation said the deposit was non-refundable.

Are they legally entitled to retain the deposit in this way?

InsideInsurance

Where did you book it? Where is that company based?

Assuming its covered by UK law then technically they'd only be able to retain the cost that you have incurred to them (which can be average rather explicitly you)

£40 when you consider possible sunk marketing costs, administration etc then £40 may not be considered that excessive.

daytona0

What is the point in agreeing to pay a non reundable deposit when you simply get it reversed?

That being said, unless someone states otherwise (and one user did quote the new regulations when I made this similar point), the seller shouldn't really be out o pocket 4 your cancellation and 40 quid sounds possibly reasonable to cover admin costs, wages, advertising etc. Why should the company be outta pocket 4 you cancelling here?

p00hsticks

InsideInsurance wrote: »

Assuming its covered by UK law then technically they'd only be able to retain the cost that you have incurred to them (which can be average rather explicitly you)

Are you sure about this ?

Most of the major hotel chains now offer rooms at cheaper rates on non-flexible terms, where you pay the full sum in advance and are not entitled to any refund if you cancel.

Although it doesn't sound as if the OP has booked such a room, the fact that the practice is so widespread would suggest that it perfectly legitimate for them to impose such terms - but I'd be interested if this not in fact the case.

InsideInsurance

p00hsticks wrote: »

Are you sure about this ?

Most of the major hotel chains now offer rooms at cheaper rates on non-flexible terms, where you pay the full sum in advance and are not entitled to any refund if you cancel.

Although it doesn't sound as if the OP has booked such a room, the fact that the practice is so widespread would suggest that it perfectly legitimate for them to impose such terms - but I'd be interested if this not in fact the case.

Yes I am sure, common practice doesnt make something legal but with major chains you actually need to check where the legal entity you are contracting with is based to see if its actually covered by UK consumer/ contract law or not.

Punitive damages are not enforceable in the UK, you can only be indemnified for your losses hence we had the banks being sued for "illegal" over limit/ late payment fees and those all reducing from £35 to ~£15

Now, if you book a room and simply dont show then the cost would be the full price because the hotel hasnt had an opportunity to sell the room to someone else so their losses are the full price. If you notify them the day before there is a fair chance they wouldnt be able to sell it again and so it may be reasonable to ask you to pay in full anyway. Give a hotel 9 months notice that you no longer require a room and they really should be able to sell it in that timescale and so the only charge they could legitimately retain is to cover the marketing and admin aspects.

Of cause if the contract is governed by USA law then the consumer rights are massively lower and punitive damage are certainly allowable.

bod1467

II is correct, but chances are a consumer would need to sue the hotel (in small claims) to get back anything. If the hotel resold that accommodation then they have suffered minimal loss, a business has a duty to mitigate any loss, and may only retain provable losses from any monies paid if the other party cancels in breach of contract.

Just because it is a term in a contract doesn't make it enforceable against a consumer. (Unfair Terms in Consumer Contract Regulations 1999).

p00hsticks

InsideInsurance wrote: »

Yes I am sure, common practice doesnt make something legal but with major chains you actually need to check where the legal entity you are contracting with is based to see if its actually covered by UK consumer/ contract law or not.

Punitive damages are not enforceable in the UK, you can only be indemnified for your losses hence we had the banks being sued for "illegal" over limit/ late payment fees and those all reducing from £35 to ~£15

Now, if you book a room and simply dont show then the cost would be the full price because the hotel hasnt had an opportunity to sell the room to someone else so their losses are the full price. If you notify them the day before there is a fair chance they wouldnt be able to sell it again and so it may be reasonable to ask you to pay in full anyway. Give a hotel 9 months notice that you no longer require a room and they really should be able to sell it in that timescale and so the only charge they could legitimately retain is to cover the marketing and admin aspects.

Of cause if the contract is governed by USA law then the consumer rights are massively lower and punitive damage are certainly allowable.

That;'s very interesting - thanks for that. I'm pretty sure that Whitbread, who own Premier Inn, are a UK company so I imagine that their contracts are governed by UK law - I'll try to find out.

In which case it would seem from what you say that the condition on their saver rates that "No cancellations, amendments or refunds can be made." is legally unenforceable ?

somethingcorporate

If only there was an FAQ post that covers this...!

http://forums.moneysavingexpert.com/showpost.php?p=42873192&postcount=16

bod1467

Which is pretty much what I said. (I must have read that before).

InsideInsurance

p00hsticks wrote: »

In which case it would seem from what you say that the condition on their saver rates that "No cancellations, amendments or refunds can be made." is legally unenforceable ?

No amendments is fine.

No cancellations is technically sort of ok but the no refunds may be unenforceable but as said, it will depend on when the cancellation is relative to the date of the stay and how much monies we are talking about.

If you book one night for £35 and try to cancel the day before then keeping the £35 is most likely going to be considered reasonable as it will reflect the overall cost of the breach of contract.

If you book a week for £1,400 and cancel 6 months before the stay then you are probably still looking at up to around £50 being reasonable but the rest having to be returned subject to the introducer route and the cost incurred with them.