Accommodation booking cancelled by provider with no compensation

Travel
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I just got a call from the provider of accommodation (apartment) in Brisbane where we were planning to stay for 4 nights in little over a month. Apparently their business or actual building has been sold, so they have cancelled the booking I made in January. They are still selling accommodation on their website, including the dates I booked (except one popular day in the middle of my booking) - at about double the price.

This particular weekend is very popular and and the cheapest alternative accommodation available elsewhere is also double the price.

The booking was non-refundable, and they are only refunding the amount I have paid, and apparently I have no option but to book somewhere else at double the price. If I had cancelled the booking, then I would have had to pay a $960 fee according to the T&C.

I am astounded that they can just cancel my accommodation with no penalty and then potentially resell the rooms at a higher price. At least I got a month’s notice, it would have been much worse to turn up and find the accommodation had been cancelled by the provider


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Hi @Tungsten, it is a difficult one. It is unfortunate circumstances which won’t occur all that often.

You will find that the booking you have made will be with the business which operated and/or owned the accommodation business before the sale. After the sale, it is likely that the new owner will be a different operator/owner and different registered business.

This poses challenges for the new owners, as your relationship/booking is with the previous owners. Things like insurance become a nightmare
as whose insurance covers you during your stay (the business which your prepaid your room with or the new owners at the time of the stay).

It is also possible that the old owners heavily discounted their accommodation in increase bookings to make the sale more attractive to potential buyers. This discounts is borne by the old owners and not the new ones.

It is also possible that under the contract of sale, bookings weren’t transferrable, thus meaning the new owners have no relationship or booking with you. You only have a booking with the previous owners which no longer have accommodation to offer.

Cancelling your booking tends to indicate that the new owners didn’t want to transfer the booking across to them (usually this is done by cancelling and then offering to rebook with them at the same price
or asking if you want your booking transferred to the new owners and once done, a new booking confirmation under the new owners are issued). Doing such may have been good business practice/customer relations if the offers for the bookings/room rates were similar.

You have to remember there are two different parties in play. The old owners who you had a booking with and the new owners which you don’t have a relationship with.

The old owners would be responsible for your old booking, while the new owners will be responsible for any new booking made with them.

Therefore, while it might be the same building/accommodation, one can’t say that they have deliberately cancelled the booking so that they can resell at a higher price.

We went through a similar scenario when we purchased our accommodation business a few years ago. We sought advice and transferred pre-sale bookings across to us and made it clear in the contract of sale. We fortunately has a long contract and also conditioned that there were not to be any pre-paid bookings made prior to the sale. The reason for this is we didn’t want to take action to recover prepayments made and not disclosed at settlement. Transferring accommodation business can be messy, especially when there are prepayments, bookings at different rates etc. The previous owners had discounted some of the bookings unbeknown to us (one finding out on handover we weren’t unimpressed). Fortunately this panned out okay for us as the Friday after settlement Australia went into Covid lockdowns and all bookings made prior to settlement were cancelled by out guests.

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As far as I can tell, the it is the same business that is still taking booking for the accommodation. It is not clear, the business told me that the owner (not a new owner) had decided to cancel our booking so they could use the apartment.

We booked through our travel agent, who were also very surprised - particularly that the business had asked me to cancel the booking through my travel agent, even though they were the ones who were cancelling it. This seems very suspicious


The travel agent went in to bat for me, and were the ones who told me that the premises had possibly been sold to a new owner who no longer had a contract with them. Possibly this means the actual apartment?

Unfortunately the travel agent was unable to do anything, but surely I have some consumer rights. The travel and accommodation industry guide to the Australian Consumer Law states:

“Service provider cancellations
You may be in breach of contract if you cancel a booking you have already accepted, unless you are
legally permitted to do so (for example, under a valid term of the contract or if performance of the contract is frustrated – see ‘Consumer cancellations’ on page 9).
The customer may be entitled to claim damages from you as compensation for any loss they suffer as a result of your actions.”

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I guess that unless the terms and conditions state that compensation will be payable by the accomodation provider to cover your increased cost of rental, it would be an appeal to their sense of decency (but sounds like they not a shred of that), or take legal action.
I assume what money you have paid in advance has or will be refunded in full.
Want to name and shame them for the benefit of others?

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The accommodation name might be the same (e.g. trading name for the accommodation), but the operating company can change. This is often done for smaller businesses as it draws a line in the sand in relation to outstanding accounts, liabilities etc. You possibly have seen this occurring when you see signage such as ‘under new management’ or’new owners’, but everything else effectively looks the same.

This is because your contact details would have been attached to the booking. Travel agents don’t book under their names, as a travel service provider (accommodation, flights, tours etc) may refuse to honour a booking if the booking name is different to the person showing up to fulfill the booking.

It could be. There are some accommodation buildings where each unit is owned by separate investors as well. If the unit is sold, the new investor may chose to no longer want it to be used for accommodation making it unavailable to anyone who has booked it post sale.

The ACL relates to the party you booked with, and not the new business/owners. It is possible after sale the presale business is wound up, meaning if there was a demonstrated loss (which may be unlikely unless you now can’t travel and any other travel costs haven’t been compensated through cancellations), there may be no one to claim against.

If you did have losses which weren’t compensated through cancellations, there might be an opportunity to claim against a domestic travel insurance policy.

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One point not mentioned is whether the accommodation owner or provider at the time they accepted the booking was intending to sell the unit or the business.

Would a failure to declare the possibility the accommodation would not be assured under those circumstances qualify as ‘misleading conduct’ in accordance with ACL?

My reading of the ACCC guide is that it might require a court action to determine/resolve, it might be excluded under state legislation or simply require a suitably worded letter seeking compensation for the inconvenience and any additional costs incurred in obtaining replacement accommodation. If this pathway is an option, it will be important to establish which entity contracted to provide the service, IE irrespective of ownership of the property who promised to supply the accommodation.

‘https://www.accc.gov.au/system/files/Travel%20%26%20accommodation%20-%20an%20industry%20guide%20to%20the%20Australian%20Consumer%20Law_0.pdf

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Thinking a bit more and looking into our own contract with booking sites, the request for you to cancel (not the business cancelling the booking in the booking platform) could also be driven by some other things:

  • the ability to cancel booking was been withdrawn from the business. This could be due a number of factors such as being in breach of the terms and conditions (evidence that booking made had been cancelled through the platform and rebooked directly with a business occurred to avoid booking commissions), complaints about bookings being cancelled unannounced in the past etc.
  • within a prescribed period, if a business cancels a booking without justifiable reason (e.g. natural disaster, fire etc), then the business may be responsible for any costs incurred by the booking platform rebooking the guest elsewhere. These costs may include the increased booking cost if the additional cost isn’t accepted by the guest.

The ACL losses conditions from what we understand (and advice given to our specific business) is about losses resulting from the cancellation of a booking. It is easier to explain using an long distance train. If an train operator cancels the train and the next train is a week away (and there are no other transport options in the interim), then the train operator may become responsible for any losses due not being able to travel. This may include accommodation paid for and not being used, tours or tickets to see things in the week etc. The loss isn’t necessarily about paying more for something, such as accommodation. If other bookings can be paid for and full/partial refunds possible, then the losses would be any fees associated with cancellations.

With airlines, there have been many reports that cancelled flights vouchers were issued for the value of the flight/or refunds given to the purchased tickets. When flights were rebooked (with the same carrier or another carrier), the new flight tickets were significantly more expensive. The original airline isn’t responsible for the difference in the ticket price. While it would not be good customer relations, it is unlikely that an accommodation provider would be responsible for the additional cost for the nights accommodation - unless it is within the contract of service such as the accommodation’s booking T&Cs or the booking platform T&Cs.

As outlined above, additional costs may be covered by a domestic travel insurance policy
as an amendment to travels plans outside your control. Whether it is worth making a claim, will depend on the excess and the additional amounts incurred.

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Unless the original booking was accepted under misleading circumstances, IE the provider or their agent knowingly failed to declare the possibility of a pending sale causing the booking to be lost.

Is it worth seeking a professional opinion as to whether a legal action would be able to recover the difference in accommodation costs, and any related losses plus 
.? EG what if you could not change annual leave and the time benefit to travel was affected? A providers T&C’s do not exclusively limit liability under ACL. The prospects will relate to what can be established factually vs supposition.

As some travel advisors suggest if all reasonable recourse is exhausted or one decides to ‘cut your losses and move on’ - one can ensure that as many public negative reviews concerning your treatment by the provider or business are shared to warn others.

The industry OTOH might ask why the customer had not taken out domestic travel insurance?

As has been raised in other topics, Australia lags other leading nations in providing protections for travel. For a nation full of rules and regulation getting a fair go is not necessarily an assured outcome? Little surprise Choice has such a large following.

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This isn’t misleading. The decision of cancellation might not have know until the point of settlement or after the sale.

It could be, but as outlined above, we have sought out own advice in relation to our business. The advice sought what was out liabilities should be have to close due to Covid within the family and require all bookings to be cancelled (business in quarantine and everyone in isolation). While the driver may be different, the end result is the same.

The cost to seek legal advice and pursue (if it was thought a claim may be worth pursuing) would be significant and likely to be more than the additional cost of accommodation elsewhere. Pursuing may also not be successful.

If I were @Tungsten, I would take my business elsewhere.

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Neither of us know what might be factual or established legally, hence the ‘unless’ as a qualifier for the circumstances.
Not all professional advice costs, including that of the various state and territory consumer offices/tribunals. EG .n.CAT. Assuming one is prepared for what might follow.

What is offered here is of broad interest and is of use for more than just @Tungsten. It’s up to each individual to consider there is more than one option and decide which is the next best alternative.

Agree there is a difference between what might be practical and what might be possible legally. @Tungsten appears to be relating the event after accepting a refund. Would a different response to the suppliers cancellation have resulted in a better outcome. I’m not about to speculate that a court action would be unsuccessful, or more forcefully challenging the cancellation at the time might have produced a better outcome.

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The business could have dealt with it better. Explain why the booking had to be cancelled and why it couldn’t be fulfilled. There could be a rational and reasonable reason to why it occurred. It is a pity that such information was not forthcoming.

In relation to pursing payment for additional cost of any replacement accommodation, there is enough other examples to indicate that it is unlikely to be successful. Many businesses cancel orders/contracts for various reasons. The simplest example is a retailer cancelling an order and refunding monies because their supplier can’t supply the goods which have been purchased. If a person faces this situation and ends up buying the same product elsewhere for more, this is the same situation. Could it be expected that the person takes legal action to recover the difference from the original business? A reasonable person would say such an expectation is unreasonable.

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Yes, even the ACCC agrees.

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Note the OP has suggested the accommodation originally offered appears to still be in the market place. Was the original offer to supply made in good faith with the intent to supply?

It’s not the same as there being no supply available if the observation is reliable. This could be a long hypothetical, and a good place to suggest that there is no single correct answer, if one is asking what the options are. Thank you for the business point of view.

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But at the time of purchase/booking, there was an expectation that the products or services could be supplied. The ACCC indicates it is illegal to take payment knowing that a business can’t supply the goods/services. There is no indication that this has occured in this case.

There are many reasons why a order can’t be fulfilled after purchase has been made. If a business needs to guarantee supply at the point of sale, this is a reasonable expectation. If a guarantee was required, then every business would only sell the inventory they have in stock.

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Possibly, but 
 it has been suggested by the OP.
Hence we’ve left a discussion that makes observations on either possibility. :wink:

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I have been assured by my travel agent that I will receive a full refund back to the method of payment (some of the cost was a travel credit, but they have extended its validity for 12 months)

The provider is Menso at southbank: mensoatsouthbank.com.au

Even when they are still offering accommodation at the higher price?

I have travel insurance, but it doesn’t cover replacement accommodation where the situation where the provider fails to provide it but gives a full refund. I wonder if any does cover this situation? The insurance really seems to be more cover for if I get sick or cannot travel.

I have already arranged a refund, and rebooked accommodation (at double the per night rate, which is the absolute cheapest available anywhere). However, to limit my added costs, I have changed my itinerary so I leave the night before instead in the morning. Thanks to my car rental company who are allowing me to pick up my car earlier at no extra cost, and my next accommodation provider who have allowed us to check in a day earlier - at less than 1/4 of the per night rate in Brisbane.

Today they show availability, except for one night of the 4 originally booked.

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I wonder if the reason requesting the cancellation is the room was double booked. Double booking can result for many reasons, from human error to miscommunication between booking platforms and their channel manager. If it was double booked, they might honour the first booking over any subsequent booking.

Some accommodation providers cease to offer discounts closer to the check-in dates. It could be your original booking is outside any promotional period.

I see they offer minimum 3 night specials, which are about 30% off standard nightly rates.

Rather than speculating, why not call them and ask why your booking had to be cancelled.

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Did you read my account? They called me, and when I asked that exact question they stated that “the owner wants to use the premises” and refused to clarify further. They then stated that there was no other apartment available. They then asked me to contact my travel agent to cancel the booking. I asked why they weren’t cancelling it from their end to which they replied that they could not cancel it at this time.

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Apologies, forgot what was written in your first post.

This could mean anything. You indicated that there was no accommodation on one night during your original dates of your booking. If this is across all room types (which might be the case from what you said they told you) could mean the accommodation is uninhabitable on that day/night for some reason and the owner is doing something. I wonder if the building was impacted by recent weather events in SE Qld (South Brisbane was impacted) or something else and there is something happening they can’t accommodate guests for that night. If this is the case, it could be a force majeure.

There are also some events they may not wish to announce publically
examples could be some sort of infestation, water damage etc. Announcing such could affect their reputation and potential to get future bookings.

It also appears that they advertise their accommodation on various booking platforms, and they may think it is easier to contact guests to cancel their bookings rather than go to each booking platform and try and manually cancel the bookings. Some platforms require guest acceptance of the cancellation before it is processed and booking removed from the platform. They also might not have access to cancel for some if the reasons outlined in an earlier post
 including the platform doesn’t allow providers to cancel bookings.

The business could have been more transparent to why the owner needs the accommodation in that particular day, and it is likely those who you spoke to were given a (scripted) message to communicate to affected guests. In our business we try and be upfront and transparent with guests, but this may be due to experience and working in other industries. I can see why others may take a different approach.

As you spoke to them and details were scant, you (we) may never know. It might be time to look forward to your future trip to Brisbane.

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In this case it was just a matter of coming up with an extra few hundred dollars and I have it all sorted. I’m more concerned about the situation where the accommodation provider (who can apparently just cancel a booking at any time for only vague reasons with no penalty) had cancelled with much shorter notice.

What if I’d turned up on the day to check in to be told that my accommodation had been cancelled by them? Do they really have no responsibility other than to refund my money?

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Looks very nice. Apartments rather than hotel rooms.
I cannot quite work out whether this is a hotel in the normal sense, or a facility with investors owning each apartment and renting them out under an accomodation booking facility.
If the latter, I would be complaining about your cancellation to Menso at Southbank about the behaviour of one of the apartment owners in cancelling your booking. They may have rules about such discraceful conduct.

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