A well functioning marketplace will have step-changes in 'fair value' when there are step-changes in the underlying fundamentals (i.e. 'uncertainty' becomes 'certainty').
Don't blame the woman. Booking.com has a free cancelation policy. In the financial markets, options cost money. There is an intrinsic underlying value. In this case, the woman was given a free option and she took it. She did the smart thing.
Don't blame the hotel. Booking.com also offers a similar policy to the room providers - if the rate is clearly in error, they can cancel. The hotel likely operated in the same manner as the woman (i.e. they said "hey there's no penalty for requesting a refund... lets try it and see if we get away with it" or more sinister "hey Booking.com uses an automated system for these requests and any price discrepancy >50% is auto-approved by the system!"). While this feels adversarial, the hotel also did 'the smart thing' (... something about the "fiduciary duty to maximize value for the shareholders" ...)
The issue: Booking.com approved the hotel's cancellation request for a room with a rate that was (likely) correct at the time it was booked. (Given the well established dynamics around market pricing around events)
The policies of Booking.com led to this mess - ultimately Booking.com did the right thing by upholding the reservation and covering the difference.
A well functioning marketplace will have step-changes in 'fair value' when there are step-changes in the underlying fundamentals (i.e. 'uncertainty' becomes 'certainty').
Don't blame the woman. Booking.com has a free cancelation policy. In the financial markets, options cost money. There is an intrinsic underlying value. In this case, the woman was given a free option and she took it. She did the smart thing.
Don't blame the hotel. Booking.com also offers a similar policy to the room providers - if the rate is clearly in error, they can cancel. The hotel likely operated in the same manner as the woman (i.e. they said "hey there's no penalty for requesting a refund... lets try it and see if we get away with it" or more sinister "hey Booking.com uses an automated system for these requests and any price discrepancy >50% is auto-approved by the system!"). While this feels adversarial, the hotel also did 'the smart thing' (... something about the "fiduciary duty to maximize value for the shareholders" ...)
The issue: Booking.com approved the hotel's cancellation request for a room with a rate that was (likely) correct at the time it was booked. (Given the well established dynamics around market pricing around events)
The policies of Booking.com led to this mess - ultimately Booking.com did the right thing by upholding the reservation and covering the difference.