TheWaldorf Astoria cancelation of the Morgan’s reservation was notfair given the number of years that Morgan has been visiting thehotel. As a customer for the last 30 years, the hotel should haveconsidered Morgan as one of its esteemed customer and reserved a roomfor her. However, considering that the Hotel was a profit makingenterprise, it must utilize the peak season to the maximum in orderto remain competitive in the Hotel industry. Therefore, there is aconflict between the honoring of the customer loyalty and keeping thepromise and the interests of the company to make enough profit duringthe peak season. This conflict would have been solved by adjustingthe policy of the company. The Hotel should make it clear thatcancellation of reservation is possible in case a visitor pays morefor the reservation during the peak times. There is no problem withthe relocation of visitors to another Hotel but the visitors shouldbe informed before by phone or other means. In this situation, it wasa grave mistake for the Hotel not to inform Morgan about thecancellation because this would have brought great embarrassment ifthe husband did not make the call. The Hotel should give the visitorsa chance for the reservation by negotiating with them about the priceincrement of the reservation due to the increased demand. Otherwisewhat the Hotel did to Morgan was not fair.


TheHotels should not be allowed to cancel reservations if they offerguaranteed reservations because this is a great violation of otherpeople’s rights. If the Hotels have an option of cancelling thereservation they should make it clear to the guests that thereservation can be altered or modified to a new price in case newconditions occur. The Hotel should value al its customers regardlessof what they offer to the company. Customer loyalty and qualityservice is an important part of managing any business. Denial of theguaranteed reservations is a breach of trust by the company and thevictims can sue the company for the refund of their money. If thishas to occur, prior communication with the victims is necessary.


Theimplication of the Hotel for walking the guests is very significant.The practice of walking away the guests results in their lack ofconfidence with the Hotel. For example, the over 100 guests who werewalked away by the Hotel might never book reservations in that hotelagain. This practice can turn away long time customers forever. Forexample in the above case, Morgan might never return to that hoteleven if she had been an esteemed customer in the hotel for more thanthirty years. The hotel could have lost more money in the long termbasis if there were five or ten esteemed customers like Morgan whomight decide to never return to the hotel again. The Saudi Arabianvisitors made a onetime visit and they might never return to thehotel again. Although they brought a lot of money to the hotel, theamount that they would have received in years to follow would havebeen more had they not turned the guests away. The customer loyaltyis a crucial part of managing any business and the reputation of abusiness especially a hotel is very important for success. In thiscase, the reputation of the hotel was ruined significantly.