Seven of us from my company just returned from Cabo last night. We had scheduled a short 3-day trip to the RIU Palace all-inclusive resort as a reward. Upon our arrival, we went to the front desk and and were immediately ushered aside. We were informed that the hotel was overbooked and that they would not be able to accommodate us. We were given wristbands to use the facilities, restaurants and bars, etc. We spent the next 3 hours on the front desk's phone speaking to Expedia, who booked the trip, trying to get alternate accommodations. There was nothing available. Expedia was terrific, although ultimately they couldn't help us. They did give us a full refund for the hotel, as the reservations were guaranteed. The front-desk staff at the RIU was rude and not willing to help at all. The next flight home was not until the following day, so we had nowhere to go.
We ultimately ended up sleeping on the beach at the hotel and went to the airport the next morning. I can't believe a hotel would overbook and not have another options for its guests.