Hotel Fines Guests $500 for Bad Reviews

The Union Street Guest House, a wedding venue in the Catskills, charges married couples that stay there $500 for any bad online reviews from people in their wedding party.

Here’s the contractual language:

Please know that despite the fact that wedding couples love Hudson and our inn, your friends and families may not…   If you have booked the inn for a wedding or other type of event . . . and given us a deposit of any kind . . . there will be a $500 fine that will be deducted from your deposit for every negative review . . . placed on any internet site by anyone in your party.

Of course, this policy has ignited a firestorm of criticism on review sites like Yelp, a firestorm that will likely bankrupt the hotel.

Obviously, this was a bad decision.  However, that’s not what makes this example so interesting.

It’s interesting to me because it shows that:

  • Reputation is on the march.  It demonstrates how powerful online reputation has become and how protective we are of it.  Online reputation, and the trust it creates, is becoming the single most important element of every buying decision we make.
  • Reputation Trumps Clever Contracts.  Reputation is now more powerful than legalism and contractual language.  Clever contracts or threats of lawsuits won’t protect you from the repercussions of bad behavior as it did in the past.
  • Reputation needs to go both ways.  There’s a flaw in many of our current reputation systems (like Yelp).  One sided reputation systems that allow anonymous reviews aren’t fair to the provider.  In contrast, advanced reputation systems like those at Airbnb and Lyft are two-way — both the provider and the buyer rate each other.

As big as reputation is already, it’s going to become much bigger still.

We’re going to use reputation systems to return trust to every aspect of the American economic system.

Don’t think that’s possible?  Just wait.


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PS:  The hotel was built by the Vanderbilts in upstate New York.

PPS:  American trust is based on an expectation of moral behavior, fairness, and respect.

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Discussion — 2 Responses

  • nate August 4, 2014 on 8:08 pm

    I always put proper reviews based upon my experiences when it comes to yelping. It’s rare that I give a bad review but it does happen. Many of the bad reviews I’ve given are for companies that aren’t even on the site yet. The reason? I get duped by just thinking they can help me out with what ever their business is. Well if you’re stupidly rude or just a plain asshole I’ll call you out on it. If you’re trying to rip me off, I’m gonna do the same.

    The thing is online review sites have more of a pull to obtain better service than say the BBB does now. If people can’t actually get this knowledge of experiences out to the mass public how are we to expect good services for spending our money?

  • Mylinda August 8, 2014 on 2:17 pm

    I agree they are going to go bankrupt. I wouldn’t even consider them for a wedding.