Guest Complaints – When Should You Refund Or Compensate?

No matter how well you prepare for your guests there will come a time when someone makes a complaint.  Causes for this are varied – it could be a breakdown in an appliance or amenity, a misunderstanding over an expectation or simply a disgruntled guest who transfers disappointment over poor weather to a complaint about the property.  Whatever the nature of the grievance it’s worthwhile being ready for it to happen and have some solutions in place.

Most guests will take a pragmatic approach to the occasional situation where a breakdown occurs, and will just be happy to have you respond promptly and get it fixed or replaced.  A few, however, will use it to demand a refund or compensation.

Did it cause inconvenience or significant discomfort?
What is mildly inconvenient for some might be a significant event for others.   Loss of the satellite TV for a few hours wouldn’t bother most people, but if they had booked the property to have a weekend away focused on a sports event, and disruption prevented them watching it, they would be impacted in a greater way.  Another example might be a couple arriving for a weekend of canoeing to find the canoe had been damaged the previous week and was unusable.

It’s important you make your entertainment options unambiguous so guests know what to expect.  If they tell you they plan to view an important sports event when they are at your place, let them know what channels are available.

Make it clear in your contract, Terms and Conditions of Rental and Guest Guide what your policies are such as in this example:
Equipment and facilities are provided at the discretion of the Owner and while every attempt is made to ensure that such equipment is in working order for the duration of the rental period, should a breakdown or some other situation occur that renders the element unusable, we do not accept responsibility for refunding the Guest for the lack of use of these equipment or facilities. The equipment and facilities referred to include (but are not exclusive to) such items as watercraft, motors, televisions, VCRs, satellite equipment, internet access, hot tubs, saunas and Jacuzzis.

Of course you can use your discretion in terms of refund or compensation but it is good to have a clause in your contract that you can refer back to in case of unreasonable complaint.

Were you given a chance to rectify the situation?
If guests have not told you about an issue that caused their disappointment until after they leave the property, should you then be expected to compensate them? 
Guests will often say they didn’t want to bother anyone, or that they managed the situation but should not have had their stay disrupted by it.  However, if you have a clear statement in your contract and Guest Guide that requires you to be informed as soon as an issue arises, there would be no requirement to refund any money if they complain after they get home. 

Were guests required to leave or were unable to access the property?
If extreme weather is cause for guests to leave a property or delay arrival because of imminent danger and/or evacuation notices, you should consider what your course of action will be.  If you offer guests the opportunity to purchase travel insurance they should be covered by a clause similar to this:

TRIP CANCELLATION & INTERRUPTION
The Insurer will pay benefits, up to the Maximum Limit shown on the Schedule, if an Insured cancels his/her Trip or is unable to continue on his/her Trip due to the following Unforeseen events:
1. Inclement Weather causing delay or cancellation of travel;
2. a named hurricane causing cancellation of travel to the Insured’s Destination that is Inaccessible or Uninhabitable
The Insurer will only pay benefits for losses occurring within 30 calendar days after the named hurricane makes the Insured’s Destination Inaccessible or Uninhabitable. Benefits are not payable if a hurricane is named on or before the effective date of the Insured’s Trip Cancellation coverage;
If they elect not to purchase travel insurance, you should not have to compensate in any way for a loss of vacation time owing to a weather related incident.
 
However, if an essential amenity breaks down, such as a refrigerator in summer or the only source of heating in winter, and you are unable to get it fixed, then a partial or complete refund will probably be necessary. 
 
Even with all your clauses in place there may be times when you feel it would be right to compensate your guests for something that happened.  Here are some options:
  • Offer a discount for a future stay
  • Add on an extra day’s stay (if there is one available)
  • Deliver a gift basket or a voucher for a nearby restaurant
 
Whether you compensate or not it’s entirely up to you and will often depend on the relationship you have with your guests. If you are fair with claims for refunds and have made your policies clear, threats of negative reviews should not be cause for concern.