One of the most confusing aspects of a hotel stay, whether for a novice or seasoned traveler, is the financial one. For most, it tends to be what charges, (pending or permanent), may happen before, during or after you have checked out. Over my years of being part of this industry, I have acquired knowledge and expertise that I will be using to elaborate on the main differences between authorizations that are pending and payments that are permanent, between first night room & tax deposit and full pre-payment, between security deposits and incidentals.
In my line of work this tends to be one of the most frequent requests.. to break it down into simpler terms and put the guest at ease when certain charges occur and there isn’t enough clarity about said charges. I have been successful in doing so for my dear guests thus far, and believe I can anticipate and prevent some frustration, to ensure less confusion, or none at all, occurs during future stays.
Normally, details about potential charges should be available during the booking process. In the instance when they are not, or one has rushed through that part, it can be simply remedied by extending a call to the front desk. Ask about what kind of charges there will be, and when they will occur. The type, amounts and frequency depend on the size and type of the property. While smaller transient or business-oriented properties may authorize for reasonable incidental amounts, larger luxury ones may authorize for sizable security deposits instead.
One piece of advice I would like to offer you is to use a credit card for payment, (if available). Even better, one that offers points that can be used for future stays, and ensures you have enough credit to cover the whole cost of the stay, plus any temporary incidental or deposit holds. When it comes to credit cards, payments and refunds take less time because they are quicker to process and therefore allow for easier corrections.
With that being said, most smaller properties, such as Hampton Inn or Hyatt Place, will authorize the guests’ card for the room, tax and an “incidental amount” at the time of check-in. This creates a credit for potential charges that may include, but are not limited to, the following: Food, beverages, movies, internet, and valet. More often than not, it will be a fixed amount authorized once. If charges incurred during a guest’s stay are below that amount, the card will not be authorized again. However, if over, the charge(s) will occur sometime during the night audit process to ensure there is enough to cover the balance. There may be properties that prefer to authorize for charges AND keep the incidental hold intact, in case a guest leaves without paying the balance, or there is damage to the room. If the guest doesn’t charge anything to the room, no additional authorizations should occur and the incidental hold amount will be released back to the guest upon check-out.
When planning a vacation, if you prefer a resort-type setting, or you travel for business and are used to upscale rooms, ensure sufficient credit for a security deposit. If you’re unsure about the amount and its’ frequency, and it’s difficult to find additional information on the hotel page, don’t hesitate to call the property to receive clarification. I’ve worked for a few hotels that authorized a fixed security deposit at the time of check-in, and I’ve worked for some that authorized a security deposit multiplied by the number of days the guest stayed. In some instances, this can add up to a rather substantial amount of money. This is why you should inquire about any alternative options. Some properties may offer a fixed security deposit with charging privileges that require settling the balance every day, while others may have a fixed, one-time amount with no charging privileges whatsoever.
There are properties, small and large alike, which may authorize, or charge, a one night deposit even before check-in of the guest. Once the reservation is booked, the hotel has discretion to either authorize the first night room & tax, or take payment for it altogether. Don’t be alarmed, this amount can be released or refunded, if the reservation gets canceled. During check-in, the guests’ card may be authorized for the entire cost of the stay, plus any additional charges (incidental, security deposit, resort fee). However, if first night room & tax has already been collected, or authorized in advance, the card will be authorized for the remaining cost of the stay, plus any additional charges.
In certain cases, when the guest wants to benefit from a lower rate, a decreased fee may be offered in exchange for a full, non-refundable pre-payment that will be processed as soon as the hotel becomes aware of such reservation. In this instance, the payment is permanent and not just an authorization.
During your stay, authorizations are standard while final payments are rare, though they do happen. It’s also worth mentioning that these policies are influenced by the type of property management systems/software the hotel is using. Some systems allow for various options and alternatives, others use ancient software that only allows for one option. Final payments typically occur at the end of the stay and are clearly marked on the hotel bill. In cases where a first night room & tax deposit have been collected, it will be reflected at the beginning of the itemized bill, while the final payment for the remaining balance will be at the end of it. Adding the first and last payment is the total cost of your stay, and anything outside of that amount will be released back to the you.
Smaller properties will sometimes take payment once the balance reaches a certain level, and then re-authorize the guests’ card.
To recap: The incidental hold is primarily meant to create a credit for potential charges, while the security deposit is meant to ensure no damage occurs to the guests’ room, and the guest doesn’t leave without paying the balance. Between booking and check-in, the hotel has the discretion to either authorize, or take, payment for at least one night of your stay. When it’s non-refundable, the entire cost of the stay may get charged. Consider using a credit card with a sufficient limit to allow for all possible charges. During check-in, your card is authorized.. final payments are rare. Payments, while easy to reverse, take longer to process and settle, which is why they are avoided until the guest checks out. This minimizes frustration and helps ensure a streamlined look to the hotel bill, which is often submitted for expense reports.
While writing, I realized there are various combinations of circumstances that this piece simply cannot go into enough depth to cover. Therefore, I cordially invite you to post your questions, in the comment section, so I may offer further assistance. As I always say: If I don’t have the answer, I will do my very best to find one, or to steer you in the right direction.