Tourist accommodation contracts
Best practice regarding booking contracts, cancellations and handling disputes with guests
If you run a tourist accommodation business, such as a hotel or B&B, it is essential that you have terms and conditions for all your bookings. This is because once you accept a booking request, terms and conditions will form a legal contract between you and your guest.
You will only be able to change the terms of the booking at a later date if you and the guest agree.
This guide will outline best practice regarding booking contracts, how to deal with cancellations and what to do if a guest does not accept their accommodation.
Tourist accommodation booking terms and conditions
Terms and conditions set when a guest makes a booking form a legal contract, will normally cover booking, pricing, cancellation policies and more
Each business has its own requirements, depending on the type of accommodation and the guests it attracts. You should specify your requirements and accommodation arrangements in the terms and conditions (T&Cs) of your booking.T&Cs will form a legal contract between you and your guest once you accept their booking request.
T&Cs usually cover:
- pricing and payment, including deposits
- cancellation policy
- damages and liability
- check in/out times
- children (eg discounted rate, sharing room, etc)
- pets (eg if they are allowed, if surcharge is required)
When writing terms and conditions, think about the problems your business could face, and how you would deal with them. Ensure this is covered in your terms. Give guests the details of any conditions they must follow before they book. This means the guest will be bound by the booking contract to adhere to these.
T&Cs can outline your liability for loss or damage within reason. However, legally you can't limit your liability for death or personal injury from negligence of an employee, agent or yourself.
Once you have accepted a booking from a guest, you normally have to honour the booking. This applies equally whether the arrangement has been made over the telephone, by email, online, or in writing. You may only change the terms of the booking at a later date if you and the guest agree to it.
As a matter of good practice, you should keep a clear, accurate record of the arrangements for each of your bookings. You might also want to have a simple checklist by the telephone or computer to remind you of the details you need to run through with each guest (eg pricing, deposit, cancellations, data protection).You should make clear what is included in the price quoted, and if any additional services (such as spa treatments, dinner, etc) need to be pre-booked.
Make any in-house policies or other information that might be useful for guests to know clear, this may include your smoking policy, payment methods and credit card surcharges, any access or car parking restrictions, and any refurbishment work in progress.
If possible, you should confirm all bookings by email or in writing. This may be particularly important when accepting booking for longer stays, from larger groups, or dealing with more problematic bookings.
Booking contracts and conditions are a complex area of law. For any detailed information or assistance, you should seek professional legal advice. Find a solicitor.
Tourist accommodation cancellation, charges and refunds
How to deal with guest cancellations, cancellation charges and refunds if your offer tourist accommodation
Cancellations and refunds are the main causes of disputes between accommodation owners and guests.
To avoid any problems with cancellation, no-shows or curtailment (when a guest cuts their stay short), you should have a clear cancellation policy in place.
You must make your cancellation and refund policy clear to guests before you accept the booking. Include this in your terms and conditions, and advise your guests of it via your website, on the telephone, email or in writing.
Dealing with cancellation
Be fair and flexible when dealing with cancellation. Keep in mind that your guest may cancel for a variety of reasons, eg death in the family, wedding being called off or, simply, because they've changed their mind.
Common ways of dealing with cancellations, no-shows and curtailment are:
- Charging an administration fee for the loss of business. The fee may vary according to the amount of notice given of cancellation.
- Retaining the deposit, or a part of the deposit, paid at the time of booking. Again, the amount you retain may vary according to the amount of notice given of cancellation.
- Give customers an option to take out cancellation insurance while booking their stay. If you need to comply with the Package Travel Regulations, you are required to tell the guest about the possibility of taking out cancellation insurance in good time before the start of their holiday. You can contact a local insurance company or broker for details of how to offer this facility. See package travel regulations.
Remember that your guest does not have an automatic right to a refund if they cancel. Terms and conditions should always cover any cancellation charges, wherever possible, require that a certain amount of notice is given. It's also be a good idea to require confirmation that the cancellation is accepted, so the customer cannot claim that they cancelled if they haven't.
On cancellation or curtailment, you will need to send an invoice to the guest for the amount due. This should exclude VAT (as no services have been provided) and less any deposit that you have retained.
If the guest refuses to pay, you may be able to:
- Charge the amount to their credit/debit card. This is only an if you have clearly stated to the guest at the time of the booking that their card account will be charged in the case of a cancellation, and they have accepted the condition.
- Take the matter to court using the small claims procedure.
Claiming damages when a guest cancels an accommodation booking
What you should do if a guest cancels their accommodation booking, therefore breaching a contract with you, including how to claim damages
If a guest cancels a booking or checks out early, they are in breach of the booking contract they have with you.
You may be entitled to claim damages for any losses you have suffered from the cancellation or curtailment. This applies whether or not you have cancellation procedures as a booking condition, although if you have these procedures they will normally prevail.
If you want to make a claim for damages, you must first make every reasonable effort to minimise your loss by trying to re-let the accommodation. If you re-let the room at the same price, you should have no loss and so have no basis for making a claim. If you can't re-let the accommodation, you will be entitled to claim damages which reflect your actual losses caused by the cancellation. This is the value of the booking, or the part of it for which the accommodation could not be re-let, less the value of any items included in the price which you did not have the expense of supplying, eg food, light, heat and service charge. You may keep the deposit, setting it off against the amount claimed.
You must wait until the period of the booking has elapsed before you can send the guest an invoice for the amount claimed (this should be exclusive of VAT, as no services have been provided).
If the guest is refusing to meet your claim, you could consider pursuing the claim through the small claims court. A small claim can be for any amount up to £3,000. You will have to pay a fee to start your claim, but this will be added to the money that you are already owed.
When a guest refuses the accommodation they booked
What to do if a customer refuses to accept tourist accommodation they have booked with you.
If a guest books accommodation and then refuses to accept the accommodation booked, you should offer them a suitable alternative accommodation that is available on your premises.
If a guest refuses to accept any suitable alternative accommodation you offer, then, depending on the reasons given by the guest, you may be able to treat this as a cancellation.
If your guest refuses accommodation because of false statements you or your staff made about it, you can't treat this as a cancellation.
If your guest refuses accommodation, for example on the basis of its quality, you should not only consider the legal and contractual position, but also the impact on your business's reputation.
What if I cancel a guest's accommodation booking?
If you cancel an accommodation booking you’ve already accepted you should find them alternative accommodation or be liable for damages
You will be in breach of contract if you cancel a guest's accommodation booking that you have already accepted.
You should try to find an alternative accommodation for the guest at the same or higher standard than the one that was booked. New accommodation should be comparable to yours. For example, if you're unable to find suitable alternative accommodation, and you're running a three-star B&B, you will not be expected to compensate your guest for a five-star hotel stay.
If you're unable to find suitable alternative accommodation, the guest will be entitled to claim damages from you. This is to compensate them for any losses incurred by them in finding alternative comparable accommodation. These loses can include charges for new accommodation costs, but also extras, eg for taxi fares.