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Dishonored Reservations or Walk Clause

Understanding Hotel Walk Clauses & Dishonored Reservations

In this video, you’ll learn how to approach dishonored reservations at your event hotel, and how to navigate the Walk Clause with your hotel partner in your contract.

Experts

Barbara Dunn (representing Groups) Partner at Barnes & Thornburg, LLP

Lisa Sommer Devlin (representing Hotels) Devlin Law Firm, P.C.

Overview

  • Once a room reservation is made by a Group guest with the Hotel, there is a contract between the guest and the Hotel which essentially states that the Hotel will provide a room for XX nights at $XX rate.
  • If the Hotel is unable to offer the guest a room as contracted, the Hotel will be required honor the “contract” in a different manner – typically by providing the guest with a room at a nearby hotel. The hotel contract should include a dishonored reservations or “walk clause” which specifies the requirements if the Hotel cannot honor a room reservation for one of Group’s guests.

Group Perspective

  • Some groups do not include a “walk” clause in hotel contracts because they don’t want to allow the hotel to walk guests. But that is the worst thing a group can do. Instead, they should include a walk clause which provides the maximum benefits and protection to Group’s guests if a walk must occur.
  • The provision should specify the process for walking a guest, e.g., “Hotel shall first notify Group and Group will direct which reservations are to be walked”.
  • The provision should also make clear that the alternate hotel be of “equal or better quality” than the Hotel and that the Group must approve the alternate hotel.
  • The Hotel should pay the cost for the alternate hotel room as well as Internet access for the guest and transportation costs to and from the alternate hotel to the Hotel.
  • The Hotel’s obligations should remain in place for each night the Hotel cannot provide a room to the guest.
  • If the Hotel can provide a room to a guest the next day, the Hotel should notify the guest. The guest can then decide if it wants to move to the Hotel or to stay at the alternate hotel. In either case, the Hotel’s obligations to pay the cost of the room should cease.
  • Groups should seek to get “credit” for walked rooms for purposes of complimentary room nights.
  • When the guest returns to the Hotel, they should be offered upgraded accommodations and a guest amenity and apology note from the Hotel.

Hotel Perspective

  • It is not helpful to request a clause that says “Hotel shall not walk group’s guests,” as walks can occur for many reasons that are beyond the control of the hotel, like guests overstaying their check out date, rooms being out of order, or other issues.
  • Hotels generally recognize their obligations if they fail to honor a reservation and will provide alternate accommodations and transportation to the displaced guest.
  • A walk clause including the types of things listed under “Group’s Perspective” is common and usually not controversial.
  • Clauses that provide cash payments to the individuals walked or to the group will be resisted, as they are likely a legally unenforceable penalty, not reasonable compensation for the inconvenience caused by the walk.