Earlier this year, Barry Shiller's rental owner got a better offer, leaving his family with nowhere to stay on vacation.
He had booked a house in Orlando through VRBO.com, a vacation-rental website. But a few weeks before the family was supposed to check in, the owner contacted him to report that the house had been "double-booked." A refund check was already in the mail.
Shiller, who runs a wholesale tool business in Cleveland, would have let it go at that. Except that he heard from a friend that someone else had booked the same house on the same dates after he'd confirmed his stay -- at a higher rate.
"We scrambled to find another rental house, which we were able to do, but at a higher cost," he says.
Can the owners do that? As a matter of fact, yes.
Common on cruises
All kinds of travel companies, not just vacation-rental owners, turn down your business when they get a better offer. The most common cancellations happen with cruises: A group books an entire ship, and individual customers are either rebooked on another vessel or must accept a refund. Airlines, hotels, restaurants and car rental companies do it, too.
VRBO spokesman Jordan Hoefar says the site doesn't regulate cancellations but that VRBO expects rental owners to honor their contracts.
"If an owner acts in a way that is inconsistent with that policy, he or she may be in breach of contract, in which case the travelers may have a legal recourse," he says, adding: "From a legal standpoint, travelers must be familiar with the cancellation policy in the contract."
One of the reasons companies can get away with a cancellation and an involuntary refund is that it's perfectly legal. Whether it's an airline contract of carriage or a cruise line's ticket contract, these so-called "adhesion" agreements typically apply only to the customer, not the company. So, although you can't cancel your reservation without losing your money or paying a penalty, the company can do so without consequence.
No one knows exactly how many better offers are received and accepted in travel -- except in one case. Airlines have to report their involuntarily denied boardings to the federal government.
We know, for example, that United Airlines showed 9,078 passengers the door last year because it overbooked flights, the highest among major airlines. But that's still a tiny number compared with the overall number of passenger enplanements: just 1.17 passengers per 10,000.
Government requires compensation
The government also requires passengers to be compensated when this happens. Federal regulations require that fliers receive anywhere from 200 to 400 percent of their fare, up to a maximum of $1,300, depending on the length of the delay.
But elsewhere? Not so much.
For example, Andy Abramson can't expect compensation from the restaurant at a winery just outside Krems, Austria. "Everything was confirmed," remembers Abramson, a Del Mar, Califorinia, communications consultant. "Then an email arrived telling me that my dinner reservation was being canceled because the hotel, which houses the restaurant, is now fully booked and the maitre d' doesn't want a solo table. The kitchen is working on a special menu for the group."
Ian Ford, who founded Undercovertourist.com, a guide to discount attractions, suspects he knows why it's happening. Businesses that cancel your reservations because they get a better offer aren't necessarily ethically challenged, but technically challenged.
When you don't have the tools that let you set competitive rates or manage your inventory, you're far likelier to be the car rental company that runs out of vehicles, leaving your arriving customers carless. Or you could be managing the hotel that has to turn away guests with reservations.
"This could be particularly relevant with small, inexperienced suppliers with limited rooms," he says.
Avoiding businesses that might let you down is difficult. When it comes to hotels, car-rental companies and even restaurants, a large and well-established business is far less likely to turn you away because it receives a better offer. With cruises and airlines, size doesn't matter as much as season. During a busy travel period, you may get bumped from a flight or a cruise.
Even though you may not have any rights on paper, you can still appeal to the company to do the right thing. For example, even if a hotel is overbooked, you can ask it to "walk" you to a comparable hotel at the same rate. A reputable property will do that. Yes, even a vacation rental.