You are the manager of a franchised, 90-room limited-service hotel property located across the highway from 7 Flags, a major amusement park that is extremely busy in the summer.
One of the most popular family packages your hotel sells includes a two-night stay (in on Friday night, out on Sunday morning), complimentary breakfast, and tickets to 7 Flags. You purchase the tickets in a large quantity from the 7 Flags group sales department. Your packages are marketed directly by your hotel and sold through select travel agents to whom you pay a sales commission.
At 3:00 P.M. on a Saturday afternoon in July, lightning from a severe thunderstorm strikes a major electrical transformer in the area, causing a power outage that includes the amusement park and results in the its immediate closure. Your hotel is sold out. The power company is unsure how long it will take to fully restore power, but its estimate is hours, not minutes.
Your hotel has a backup generator—thus, essential hotel services such as emergency lighting and power to the property management system (PMS) are maintained. Your lobby, however, is filled with families seeking to check out (it is 4:30 P.M.) so they can leave the area and drive back to their homes.
Approximately 60 guests want to check out. None of these guests believe they should have to pay for their Saturday night stay because, due to the power outage, they will not use their reserved rooms. Some want a refund for Friday night as well, claiming the hotel did not provide the complete two-day “package” that was promised.
Would you bill these 60 guests for Saturday night’s stay even if they elect to leave? Would you give the guests any other compensation? Would your course of action be affected if you learned the theme park had made the decision to refund the price of admission to all those who entered the park on that day?
If the theme park had made the refund mentioned, do you believe the amount of the refund belongs to the disappointed park attendee or to your hotel?
Describe briefly how the decision you make will affect: Your relationship with the theme park’s management The relationship with your franchisor Your relationship with travel agents marketing your packages
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