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What to do if your hotel shuts down during -- or right before -- your stay

April 15, 2021
6 min read
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To say the hotel industry has been through a lot since the beginning of the coronavirus pandemic would be an understatement.

Shortly after the virus began spreading rapidly throughout the U.S. last year, demand for travel collapsed, leaving airplanes flying empty, or grounded altogether, and hotels vacant, with many deciding to close their doors for several months as the pandemic continued to wreak havoc across the country.

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(Photo by Nick Ellis/The Points Guy)

While the full scale of the pandemic's impact on the industry remains to be seen, hotels throughout the nation remain on shaky ground despite a recent rebound in travel.

The current instability of the industry is reflected most clearly in several recent examples of hotels missing previously communicated opening dates and remaining shuttered or closing for good, despite having reopened prior, and leaving guests scrambling to find new accommodations after being given just hours to pack up their belongings and leave.

In this month alone, we've seen several reports of hotels closing in different areas of the country, leaving employees and guests in the lurch.

In the Orlando area, the former Champions World Resort near Walt Disney World shuttered without any warning during the middle of spring break, forcing about 100 guests to leave within hours of the announcement, according to Your Mileage May Vary. And, with spring break coinciding with the Easter holiday this year, it wasn't exactly easy for the majority of these guests to find a new place to stay in just a few hours.

In New York City, the Sheraton Tribeca has closed temporarily, which TPG learned through a tip from a reader email. The reader reports the hotel offered to rebook the reader at a Hyatt property near Times Square. Luckily, that reader hadn't yet traveled to the hotel, but the situation still likely caused a headache as they now have to rework their New York travel plans around their new location, which is quite different than Tribeca.

The Sheraton Tribeca (Photo by Summer Hull/The Points Guy)

And on the West Coast, one of the most prestigious hotels in Southern California -- the Four Seasons Resort The Biltmore in Santa Barbara -- never reopened and reportedly has canceled all reservations and events through 2022. Now the employees of the shuttered hotel are said to be in talks with attorneys with the intent of bringing a lawsuit against the property.

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While you may be tempted to think a situation like this could never happen to you, it certainly can -- even before the pandemic hotels seemingly closed without warning all the time for a variety of reasons, from financial insolvency to management disputes.

Here are some strategies you can employ to mitigate the chance that something like this happens to you in the future and to lessen the stress that will no doubt ensue should something similar happen to you:

Don't cancel any reservations

Even if you suspect something is not right with your chosen hotel, don't cancel your reservation ahead of time. If a hotel closes before you arrive, it should contact you to update you on the situation and provide you with an alternative option. But if you cancel proactively, you won't be offered anything in the way of compensation.

Book direct

If the worst comes to pass and you experience a hotel closure while staying on property, booking direct will allow you to deal with the hotel chain the property belonged to, instead of going through a third-party booking platform which may complicate the situation further. If you have elite status with the chain at which you're staying, it may help to remind any agent you work with that you're a loyal customer who values stays at this particular chain for a reason. It may motivate them to go the extra mile to assist you.

Ask for compensation

You definitely will want to ask for compensation from the property or the chain the hotel was affiliated with, no matter how you booked. It's preferable to deal directly with the hotel brand or chain itself, but if you did book through an online travel agency (OTA), you'll want to contact them and explain the situation in case they're able to help. If the hotel is acting in the best interest of its affected guests, you should be re-accommodated and compensated fairly for the ordeal. And you might even end up with an upgraded stay at a nicer hotel in the area.

If all of this fails, you could file an insurance claim if you booked your stay with a credit card that comes with trip cancellation/delay insurance like the Chase Sapphire Preferred card and Chase Sapphire Reserve card. However, it's likely going to be hard to be awarded compensation this way. For example, the Sapphire Reserve might cover you if "you or your traveling companion’s lodging accommodations at the destination of the trip [are] made uninhabitable". But the CSR wouldn't cover you due to "financial insolvency of a travel agency, tour operator, or travel supplier."

Look to hotel apps to buy you time

If you need to be out in a hurry, you can leverage apps like HotelTonight which are great for finding day-of stays at hotels with unsold rooms. This could allow you to book a room and ensure you have a place to stay (call the hotel directly to make sure they're still open before you click "book," though) and then from there you can figure out longer-term arrangements and how you're going to approach asking for compensation from the hotel that closed on you.

Book a vacation home rental

If you can't find a suitable hotel, you could move into a vacation home rental booked through a platform like Airbnb, Vrbo, Marriott Homes and Villas or others. While you won't have the same experience as a hotel, you may find you like it even better since you'll likely have access to a full kitchen, multiple bedrooms (depending on the type of rental you book) and more.

Featured image by Sheraton Tribeca (Photo by Summer Hull / The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
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    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
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  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees