Linda and Michael Morgan learned that the hard way when their reservations for the Thanksgiving holiday were dumped in favor of a contingent of Saudi princes - reservations, if should be noted, that had been made last summer. From the NYT:
Mrs. Morgan, who lives in Seattle, said that she and her husband learned only by chance that the rooms were not available when her husband called to make a last-minute change. "My husband called to cancel one room after my mother decided not to travel. That was when he was told that none of the rooms was available," she said. "If he hadn't called, we would have all shown up at the Waldorf and effectively gotten kicked out." Reluctantly, the Morgans accepted the Waldorf's offer of alternate accommodations, including a free night's stay, at the nearby Hilton New York. But the world-famous Waldorf was supposed to be the highlight of the trip, she said. "They assured us the Hilton was just as nice, but come on, there were people in the elevators at the Hilton carrying pizza boxes."
In New York, famous hotels like the Waldorf are always heavily booked during holidays. Given a sudden demand for rooms from prominent customers like a valued foreign delegation, a hotel like the Waldorf can face a tough choice: accommodate individual guests who may have booked at discount rates that were widely available last summer (as the Morgans did), or accommodate the last-minute, high-yield group that will pay a premium that, in the case of the Waldorf, can account for what one industry expert estimated at $80,000 to $100,000 in daily revenue. While the situation at the Waldorf was unusual, research by TripAdvisor indicates that 30 percent of travelers have been bumped from a hotel at some point, despite having confirmed reservations, Brooke Ferencsik, a spokesman, said.
Story describes it as a tough choice, but it's really not. Either you act responsibly to all your customers or you don't.