Do hotels cancel bookings?

Do hotels cancel bookings without any reason? I find Sri Lanka to be the most difficult place to book a hotel. I booked 28 hotels (twice in each location because of the cancellations) for a 30-day stay in different locations across the country, and you won't believe it, they mostly offer a "pay later" option, and then these bookings get canceled for no apparent reason. Is this some kind of scam?