There has to be laws protecting guests against this.
I would be extremely surprised if hotels can just do this with no consequences, even if you somehow signed into it on their T&C.
Edit: Downvotes on this? Really? Hail corporate!
I would be extremely surprised if hotels can just do this with no consequences, even if you somehow signed into it on their T&C.
Edit: Downvotes on this? Really? Hail corporate!
what consequences can you put on a bankrupt company?
I guess that guests might have claims for not used part of the stay but that’s going to be handled by bankruptcy process and there are rules who get money back in which order I guess employees get their paychecks first or something.
Same as what happens when a homeowner fails to pay their home insurance.
Don't worry, I happen to be knowledgeable about this.
Some key differences that come to mind (obviously YMMV):
Home insurance stops almost as soon as you stop paying vs. corporate insurance which is usually a bit more lenient and even has things like "tail coverage" in place.
The regulatory protections that apply to home insurance are very different to the ones applying to corporate insurance.
It's not uncommon for corporate insurance to cover events that happened while the company was insured, even if by the time the claim is filed the policy has been canceled.
Insurance is considered an asset of a company, and a judge can rule over what happens to them. This come into play particularly when bankruptcy is involved.
Many commercial insurance contracts, under some situations, cannot be canceled by the insurer, even if the company stops paying their premiums.
Anyway, I know on a naive approach it's easy to think that "all insurance is the same", but once you scratch a bit more than the surface of it you'll see it's a very complex affair!
Such an assumption is not necessary. (The difference between consumer and commercial insurance is also not germane when discussing a novel bonding scheme.)
If you’re getting thrown off by the home insurance analogy, think regulatory capital instead.
> regulatory protections that apply to home insurance are very different to the ones applying to corporate insurance
We’re discussing a hypothetical regulatory environment. Given the insurance is guaranteeing consumer protections, one would expect it to be strict.
If they can't afford it, they face prison time.
I bet that would fix the issue damn quickly.
Won't happen in this timeline, though.
For management? Not at all. It's almost just customary that employment agreements don't make employees, including senior managers, personally liable for their mistakes.
You'd just have to pay Board members and executives boatloads more. (Or, more accurately, they'd be able to justify more pay for the risk. And then go and purchase insurance to offload it anyway.)
I’m all for paying folks that legitimately have real power and responsibility, very well, but I would also hold them to rigorous standards.
For example, police. A cop having a bad day, can ruin your whole life. Pay the cop well, but also, ruin their life, if they abuse their power.
Again, we’re in the Dark Timeline, so that won’t happen.
You’d have a difficult time proving intent, nevertheless. The only practical solution is reducing the standard of proof, which is historically a straight line to hard oligarchy.
> A cop having a bad day, can ruin your whole life. Pay the cop well, but also, ruin their life, if they abuse their power
Cops deal in violence, which is far more black and white than e.g. being a hotelier.
That said, starting with cops is a good idea. Culture of responsibility and all that.
The idea being probably that not risking your entire personal wealth just to lead company would lead to more entrepreneurship, but it clearly ended up with small businesses (without legal or clear reason to make it LLC) not doing that cos of bureucracy, and everyone above abusing that construct wherever they can.
CEOs ballooning compensation would even be understandable in conditions where their biggest fuck up could get their private stuff seized but...
Personal financial liability would probably be more effective.
Force them sign a special type of insurance, or something else where other companies can temporarily pick up the pieces until the current stays are over. Make the company pay into a fund to pay for that before they get their license to operate the hotel, and make it a legal requirement that the fund needs to be able to cover all the currently active stays for N days. Consequences can be put on the people who run the company, that if they don't fulfill their legal duties they get fines or even prison.
Of course, this is just me brainstorming ideas in two minutes, I'm sure with a proper legal system and actual professionals they could work something out to protect guests and works better than "Sorry, we're bankrupt, you need to leave in one hour or sooner".
1. Secure creditors (like liens on specific assets)
2. Administrative expensive post bankruptcy
3. Priority unsecured claims like employee wages
4. General unsecured creditors like suppliers and customers
5. Shareholders
I think customers who paid by credit card or have travel insurance might be able to make a faster claim with those as the legal process is slow especially since it involves multiple countries where they do business.
You require a bond.
Are they really operating on such slim margins that it would have been a threat to their business/chains if they didn't immediately evict and re-book the room(s) out?
If you paid by credit card, just start a chargeback?
Chances are there are, but it varies by city.
> Edit: Downvotes on this?
Flagged. (Happy to unflag if edited.)
It was definitely surprising to see a backlash on that comment, though.
It also happens to be the comment with the deepest discussion, go figure.