Stephen N. wrote to me, to Lucky, and to Mommy Points about his upcoming booking at the Grand Hyatt Baha Mar which has been cancelled.
As you may be aware, the Grand Hyatt Baha Mar has entered bankruptcy and has indefinitely postponed their opening date. How this affects myself, and other guests, is that Hyatt has cancelled our reservations (mine was for October), offering change fees as our only compensation.
I would like to pose 2 questions to you all regarding the situation… In situations such as this, what do you feel is the appropriate compensation, if at all, for guests?
The hotel will not open on time. The property is going through bankruptcy. And all Hyatt is offering, it seems, is $300 towards change fees.
As you may be aware, the ownership entity of the Baha Mar resort in the Bahamas, Baha Mar Convention Hotel Company Ltd. (Owner), recently filed for protection under Chapter 11 of the United States bankruptcy code in the U.S. Bankruptcy Court in Delaware. Unfortunately, this means that the opening of the Grand Hyatt at Baha Mar hotel will be delayed due to the bankruptcy filing. …
In the meantime, because we cannot predict the timing of the Owner’s bankruptcy resolution, we believe it would be in your best interest to re-schedule your upcoming reservation at an alternate location in order to minimize the inconvenience to you. We realize this situation may cause you airfare penalties for rescheduling and we will reimburse you up to $300.00 per person on your reservation for cancellation fees and non-refundable airfare.
I assume the role that bankruptcy plays is that Hyatt is going to wind up funding compensation itself, versus the hotel coming out of pocket to make customers whole.
In the past I’ve received a free stay in a suite at an alternate Hyatt property. I’ve also been offered the equivalent points to book a free stay later.
My mental model is that this is like a walk situation, the hotel can’t honor your reservation. Traditionally that means they cover the nights they can’t host you and if you’re an elite otherwise generous it should mean free nights as well.
Obviously change fees aren’t sufficient here (and $300 certainly not).
- Ticket change fees are often $200 per person, plus difference in fare. Hyatt will reimburse $300 per person on the reservation though of course people don’t usually add names of all guests to their bookings, though I suppose it would be a best practice to do so.
- Hyatt elites won’t get the same benefits at other properties, so they should be covering breakfast and a room category upgrade plus internet charges if applicable.
- Inconvenienced customers no longer have the advantage of making advance bookings at other hotels and may face fewer choices or higher prices elsewhere
- The hotel was a Gold Passport category 4 property, it was moved up to category 5, making future redemptions there (if anyone would be willing to go back after this) more expensive.
Here’s an interesting nugget: earlier-cancelled guests were given “options including 20,000 points per night or a discount at a nearby hotel.” As I say, I assume the difference is that the hotel owner is now in bankruptcy.
And the bankruptcy is a complicated one, with the hotel reported ‘97% complete’ and responsible for 1.5% of its country’s employment and 12% of GDP. (The project houses a Hyatt and two other brands.)
My bottom line: Customers reasonably relied on Hyatt’s representation that they would have a room, not on that of the individual property with whom they’d have an unsecured claim. If there was a failure of due diligence here, it’s on Hyatt’s part with respect to their relationship with the owner. And at least for those guests who booked through Hyatt channels, greater compensation – bending over backwards even – should be the standard. No one should have to fight for this.
Hyatt has certainly been aware of the problems with the project for some time but did not notify guests.
This isn’t just the right thing to do with respect to customers, it’s good business. Because otherwise customers should be asking themselves, if Hyatt doesn’t stand behind reservations, at what point can I trust a booking I make at Hyatt.com?
Unfortunately after a week, multiple promises for comment from Hyatt, and holding off on this post more than once pending a reply nothing from them was ever forthcoming. So I’m disappointed not just in their unwillingness to stand behind their bookings but also their unwillingness to even offer insight into or defend their actions here.
One argument for booking through online travel agency sites or through traditional agents is that there’s another party you’ve got to both advocate on your behalf and make you whole when something goes wrong. I think Hyatt is undermining the credibility of their direct booking channel.
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