Warning about Southwest Hotels Pre-Paid Bookings

[onefish]

I figured I'd share a recent struggle with SW Hotels as a caution for fellow travelers (I'm in the midst of a billing dispute that seems headed to arbitration or litigation.) I think my issue is probably not unique to the SW Hotels platform, but it's particularly problematic on this platform.

The story goes in April 2024, I booked a 2-day stay in Galveston in August 2024 (this is a 2-day stay prior to a cruise), and pre-paid. No big deal. However, when I arrive at the hotel in August, in true "WallyWorld" fashion, the security guard at the gate informed me that the hotel was closed due to hurricane damage (which was true.) I had no prior notice (and indeed got a reminder email on the date of the check-in telling me the standard details we get in those emails.) Not a big deal there--we called a local hotel, booked it, and went on our trip and cruise. 

The problem arose in terms of trying to get a refund on our pre-paid stay. It's now about 2 weeks later and I've had at least three different responses from the platform refusing to refund. First, they claimed that they offered an alternative hotel (which is false and completely inconsistent with how the platform even works--that was just a silly response). Second, they repeatedly claimed they needed more information that I'd previously provided, including when I began following the "Disputes" provision in the Terms and Conditions. Third, they finally claimed that the hotel was simply refusing to refund the money and that there was nothing more they could do.

As I moved forward with initiating arbitration, I decided to just try to call the property itself and see "what's up." It turned out that the property (this is Holiday Inn Vacations Club, and not some unknown outfit) had closed out the booking on July 25 (after Hurricane Beryl shut down the property), had no contact information through the platform to notify me, but that they also did not collect any payment.

Assuming the Holiday Inn rep wasn't blatantly lying (I doubt the rep was lying for several reasons,) my pre-paid booking is probably sitting somewhere in some Booking.com escrow account, but with nobody on the SW Hotels platform recognizing it--and instead giving a boilerplate "So sorry we did the best we could" final answer. 

At the moment, I'm moving forward with the credit card dispute and eventual arbitration, but this was the experience that finally showed why I really shouldn't use third-party platforms. They're nice and convenient, but when things go wrong, they really are a pain to deal with. 

[jksobonya]

This is unfortunate, but I am not sure that this is a Southwest Hotels/3rd party problem, but a problem specific to this particular hotel being closed due to hurricane damage. When you originally booked and pre-paid, was it non-refundable? Many pre-paid options are listed as non-refundable, and are a bit cheaper as a result. Obviously this situation should be an exception to that rule because the hotel was closed, but that may be a reason why they are not refunding you. I generally pay a little bit more for the "No prepayment needed" option, and I am charged when I stay. 

--Jessica

[onefish]

In this case, it is a SW Hotels problem, and not a hotel problem (unless the hotel representative was just lying to me, which I find very unlikely.)

The stay/hotel was a refundable pre-paid booking (refundable until about two or three days before the stay, which is typical). 

According to the Terms and Conditions, the way the platform works in that scenario is that when you click the link to book and pay, that gets collected by a third-party payment processor ("HotelBeds" is the name of the processor apparently). The selected hotel will then engage in transactions with that processor to collect the pre-paid fee (presumably with a small commission shaved off for Booking.com). 

When I spoke with the actual property, they informed me that they canceled the booking (on July 25, three weeks before the actual stay) and any transaction with the processor, and that at the time of that cancellation, they had not collected any money from the processor. In other words, the prepaid funds is held by someone other than the hotel that was closed, presumably the processor.  I suspect the funds are held in an escrow-like suspense fund at the processor, but Booking.com is a bit slow to sort all that out.

The good thing is that I'm a lawyer and commercial litigator, so this is what I do and well within my wheelhouse. I posted the warning about the situation given that it's hard to foresee because how the platform operates is actually a bit mysterious, and I don't think others may want to have to go through the efforts this will take (including paying an upfront $1,000 arbitration fee) to recoup a lost $600 hotel booking.