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

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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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.

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.

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.