Reining in the Wild West of the travel industry

[Warm Breezes]

One should not have to pay to avoid an oppressive and unfair business practice.

Does anyone know if the cancellation penalties have ever been challenged legally?

 

You don't have to pay. You can choose another form of vacation. If you feel that the cruise contract is oppressive and unfair then don't cruise. You do have a choice to do other forms of vacation if you do not agree with the cancelation clauses. I agreed with them when I purchased my cruises. I purchase travel insurance to cover me in case I have to cancel. It is my choice and I did not feel it to be unfair or oppresive when I agreed with. We have had to cancel at the last minute. I was reimbursed for my expenses because I did purchase travel insurance...

[pmacher61]

Repeating myself (for last time)...I am not advocating anything except for cruise lines to be subject to normal contract law principles which limit penalty damages for breach of contract. I comprehend that it may be necessary to avoid last minute price drops on a routine basis in order to avoid customers deferring purchases to the last minute thereby causing uncertainty and even chaos.

 

But if a cabin could be sold for the same price after someone has cancelled, then why should the cruise line make 2x the value of its product at the expense of the poor guy who had to either pay for insurance or who didn't and lost his entire cruise payment.

[Donray]

Repeating myself (for last time)...I am not advocating anything except for cruise lines to be subject to normal contract law principles which limit penalty damages for breach of contract. I comprehend that it may be necessary to avoid last minute price drops on a routine basis in order to avoid customers deferring purchases to the last minute thereby causing uncertainty and even chaos.

 

But if a cabin could be sold for the same price after someone has cancelled, then why should the cruise line make 2x the value of its product at the expense of the poor guy who had to either pay for insurance or who didn't and lost his entire cruise payment.

 

So, you do agree that no hotels should have cancellation penalties and that Priceline and Hotline should be illegal because they do not have refunds if you cancel. Yet the hotel resells the room and makes double the money.

We should never book a hotel that is not fully refundable, is that correct?

You want a law that contacts are not enforceable if they do not offer full refund if cancelled before deliver of the product.

All tickets for football, concerts, theater, etc. must be fully refundable up to a minute before the performance. If your car breaks down and you don't use the ticket it should be refundable as long as you call to cancel before the start of the performance or game. Is that your logic?

[pmacher61]

So, you do agree that no hotels should have cancellation penalties and that Priceline and Hotline should be illegal because they do not have refunds if you cancel. Yet the hotel resells the room and makes double the money.

We should never book a hotel that is not fully refundable, is that correct?

You want a law that contacts are not enforceable if they do not offer full refund if cancelled before deliver of the product.

All tickets for football, concerts, theater, etc. must be fully refundable up to a minute before the performance. If your car breaks down and you don't use the ticket it should be refundable as long as you call to cancel before the start of the performance or game. Is that your logic?

No, that is not my logic.

Theater, concert, etc tickets and the like may be non-cancellable in the sense that there are no refunds, but you get to keep the tickets and may offer them to someone else. If I'm not mistaken (please correct me if I am), when you cancel a cruise you do not have the right to use the cabin or allow someone else to use it. It's a false analogy. There' is a difference between simple non-refundablilty vs forfeiture of both price and product.

 

Airlines offer a tiered pricing making only some tickets fully non-refundable, some partially refundable, and some totally refundable or exchangable, but I don't believe they resell the fully non-refundable seats.

 

Some doctors and restaurants have policies that require a charge for late cancellation. Depending on the specific details I don't think that is necessarily unfair. The office or restaurant is likely to have suffered a loss of business by someone reserving a table or office slot and then not showing up or cancelling at the last minute. Such cancellation policies can be reasonably justified as geared to avoiding last minute cancellations and no shows with the attendant loss of revenue.

 

Hotels typically have one night penalties if a reservation is not cancelled within a certain time frame, usually only 24 hours. I don't find that an offensive policy either. A case could be made that the room was withheld from being offered to another and the revenue was lost. That's hard to justify when the hotel still sells all rooms (overbooking in anticipation of late cancellations). If memory serves me correctly some litigation about such practices has been instituted though I do not know the results thereof.

 

The cruise company can avoid the negative financial effect of both a flurry of last minute cancellations and the practice of deferred purchasing in anticipation of a price drop by simply holding prices constant. If the cabin is not sold, the cancelling party is on the hook for the price paid per the terms of the original contract; however if the cabin is resold at the same price then it is contrary to general contract law principles that the cruise co should require the original buyer to forfeit the entire purchase price.

 

Cruise company penalties strike me as unlawful liquidated damages. I wouldn't be surprised if I were wrong (it wouldn't be the first time) and that this issue has already been litigated. I would appreciate if someone knowledgeable would ratchet up my thinking on this.

[luddite]

I'm gonna take a SWAG: you're a third-year law student?

 

The company doesn't need the agita of trying to fill a , ahem, 'boatload' of late cancels. Tilting at windmills isn't gonna change their policy.

[Donray]

No, that is not my logic.

Theater, concert, etc tickets and the like may be non-cancellable in the sense that there are no refunds, but you get to keep the tickets and may offer them to someone else. If I'm not mistaken (please correct me if I am), when you cancel a cruise you do not have the right to use the cabin or allow someone else to use it. It's a false analogy. There' is a difference between simple non-refundablilty vs forfeiture of both price and product.

 

Airlines offer a tiered pricing making only some tickets fully non-refundable, some partially refundable, and some totally refundable or exchangable, but I don't believe they resell the fully non-refundable seats.

 

Some doctors and restaurants have policies that require a charge for late cancellation. Depending on the specific details I don't think that is necessarily unfair. The office or restaurant is likely to have suffered a loss of business by someone reserving a table or office slot and then not showing up or cancelling at the last minute. Such cancellation policies can be reasonably justified as geared to avoiding last minute cancellations and no shows with the attendant loss of revenue.

 

Hotels typically have one night penalties if a reservation is not cancelled within a certain time frame, usually only 24 hours. I don't find that an offensive policy either. A case could be made that the room was withheld from being offered to another and the revenue was lost. That's hard to justify when the hotel still sells all rooms (overbooking in anticipation of late cancellations). If memory serves me correctly some litigation about such practices has been instituted though I do not know the results thereof.

 

The cruise company can avoid the negative financial effect of both a flurry of last minute cancellations and the practice of deferred purchasing in anticipation of a price drop by simply holding prices constant. If the cabin is not sold, the cancelling party is on the hook for the price paid per the terms of the original contract; however if the cabin is resold at the same price then it is contrary to general contract law principles that the cruise co should require the original buyer to forfeit the entire purchase price.

 

Cruise company penalties strike me as unlawful liquidated damages. I wouldn't be surprised if I were wrong (it wouldn't be the first time) and that this issue has already been litigated. I would appreciate if someone knowledgeable would ratchet up my thinking on this.

 

Sound like a bunch of non legal BS. First off, I would want a refund on a theater ticket and not just give it away to someone. Reselling the ticket is not legal in many places. So are you advocating that only cruise lines offer a full refund?

Since you think giving the ticket to someone solves the problem, you would be OK giving the cruise ticket to someone as long as they follow all the government rules on name changes and pay a change fee?

You failed to address the issue of Priceline and Hotwire that don't give refunds and do not allow a change of names. Why didn't address that issue?

Sorry but are ignorant about the hotels charging for one night only. If you take internet rate that require payment up front they keep all the money if you don't show up. So what do you propose doing about that?

Your happy with the airline selling either refundable or non refundable tickets so I guess you would be OK if the cruise lines offers a refundable ticket for let’s say three times the current of the non-refundable rate? That would solve your problem, correct?

So, address the Priceline issue and the non refundable hotel issue and the concert ticket issue where it is illegal to resell your ticket.

[pmacher61]

I'm gonna take a SWAG: you're a third-year law student?

 

The company doesn't need the agita of trying to fill a , ahem, 'boatload' of late cancels. Tilting at windmills isn't gonna change their policy.

 

Why do you think I am a 3rd year law student? Is that an implication that my statements about the law have been incorrect? Please do correct me - I am "thinking out loud" and would welcome correction from informed sources.

 

Agita? (as in agitate which is defined as " to stir up public discussion of")

Gee whiz, I think the cancellation polices are oppressive and unfair (and possibly unlawful). You don't. Okay, but do you really think the subject is not worthy of public discussion especially on a site like this? Is avoiding agita (as in agitation, disturbance) on the part of the cruise co a good reason not to have them bring their policies more into line with the legal and business standards of other commercial enterprises? According to the cruise ship hotel manager who posts here, each cabin is turned over about 7 times before final sale. It seems that the companies already deal with agita in their sales depts.

 

Would you be more apt to book a cruise believing you might not get any refund if you cancelled than knowing for certain you would not get any refund? Do you think there would be a boatload of last minute cancellations if those cancelling were not sure they would get any money returned? As it is, cabins are turned over quite frequently before final sale. Extending that period of turnover doesn't seem like it would be difficult. If the cancelled cabin did get sold and the cruise ship did obtain 100% occupancy why should the cancelling passengers suffer a forfeiture?

 

It occurs to me that the draconian cancellation policy utilized by all cruise ships is a result of the standard industry practice of relying on passenger spending on board to generate profit. It is my understanding that for many lines little or no profit is generated by the sale of the basic cruise passage. Consequently, cruise ships need to sail full (and almost always do) in order to maximize profit. If they changed their cancellation policy they probably believe it would reduce the odds of sailing 100% full. That might cause them to rethink their business strategy.

 

But quite apart from business strategies that are opted for by the cruise lines, it still remains my belief that the current cancellation policies constitute unlawful liquidated damages.

p.s. And it's been a long time since I was a 3rd year law school student, but those sure were wonderful days.