Yes, a hotel can legally cancel your reservation, although it is usually considered a "breach of contract" if they do so without a valid reason. Common reasons for cancellation include overbooking (where the hotel sells more rooms than it has, anticipating cancellations), maintenance emergencies (like a burst pipe), or "force majeure" events like natural disasters. In the event of overbooking, the industry standard is for the hotel to "walk" you—meaning they must find you comparable accommodation at a nearby hotel, pay for the first night, and provide transportation to the new location. However, if the hotel cancels your booking well in advance (e.g., due to a planned renovation or a full-hotel buyout for a wedding), they are typically only required to provide a full refund of your deposit. Always read the "fine print" of your booking, as many hotel contracts include clauses that limit their liability to a simple refund.