A late arrival is standing at the desk waiting to be roomed. The night manager stays silent allowing the guest-service agent to handle the situation. There are no rooms. “You don’t seem to understand; I have a reservation. It was guaranteed with my credit card because I knew I was going to be late.” “Sir, you made that reservation nine weeks ago on credit-card number 4300 0000 0000 0003. The card company dishonored that card; so we cancelled the reservation. We have no rooms and the citywide convention means the closest accommodations are in the next town, 18 miles away. Their rate is $165; my guess is the cab will be about $60. They’re on the telephone, what should I tell them?” “I need a room. Have them hold space.” The reservation confirmed, the guest turned toward the manager. “I feel you should pay the cab fare and the $75 difference between the rates. Since apparently we have both made mistakes; make it an even $100 and we’ll each take a hit!”

Questions

1. Was there a management failure here; if so, what?

2. What is the hotel’s immediate response (or action) to the incident?

3. What further, long-run action should management take, if any?