The recession has officially touched paradise with the news that an iconic Hawaiian resort is shutting its doors. The distinctive, Y-shaped Ilikai, made famous in the 1970s thanks to its role in the opening sequence of Hawaii Five-0, has closed after a long period of financial trouble. The privately-owned condominium portion of the property is not being affected by the hotel shutdown.
The hotel had been purchased by a developer in 2006 with big plans to pour $60 million worth of renovations into the property and restore its status as a Waikiki icon. The Ilikai's current owner formerly held that developer's loan; when the developer defaulted, the lender picked up the hotel at a foreclosure auction back in May but wasn't able to pull the money-losing property back into the black. According to the Honolulu Star-Bulletin, the owner plans to relocate guests currently at the resort as well as those with future reservations, to other properties.
While it's unfortunate, this situation might also make travelers think: Could this happen to me? Many hotels around the country right now are in default or bankruptcy; while most of those stay open (in fact, guests may never even be aware that the place is having trouble paying its bills), there is a slim chance that you could book -- or, worse yet, already be staying in -- a hotel that's closing its doors.
Walletpop asked Alexander Anolik, San Francisco-based travel attorney and author of Traveler's Rights: Your Legal Guide to Fair Treatment and Full Value to give some advice on what travelers should do if their getaway goes away.
"The first thing is try to get your money back," he says. To do this, Anolik says, contact your credit card company. Since it's highly likely you reserved your stay with a credit card, contact them as soon as possible and explain the situation. Whether you booked directly with the property or through a third-party website, your card issuer should be your first stop. In most cases, Anolik says the card company will issue you a chargeback for the nights you won't be spending at the property.
Whether you're already at your destination or have travel plans for the future, don't rely on the defunct hotel's owners or managers to find you a new place to lay your head, even if they say they will. While it's always possible they might offer you alternate accommodations that make you happy, you're taking a risk. What if they stick you in a lower-quality hotel, or don't offer anything at all?
"Who are you going to complain to if they don't make good on their pledge?" Anolik says. "I wouldn't like to place my vacation in the hands of a group that just went bankrupt and rely on them. They're not even going to be around if something goes wrong," he points out.
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