Why do hotels require you to use a credit card when booking?
Hotels often require guests to book a room with a credit card because it’s more secure. This way, should there be issues with the room, the hotel has a security deposit that they can use to cover the damage. On the other hand, this deposit can be done with a debit card, but only if there is enough money to cover the charge.
By using a credit card, the line of credit established can be used in case of damage, or should the guests incur incidental fees like use of the mini-bar or late check-out. Hotels can put a hold on the credit card for the number of nights booked plus taxes and incidental fees, and have the security that they will be covered no matter what.
Problems when booking a hotel without a credit card
Booking without a credit card provides hotels with less security because should anything go wrong during the stay, such as the guests leaving without paying, damage to the room, or any other unexpected occurrence, there is no so-called “security blanket.”
Furthermore, hotel rooms usually cost upwards of $50 per night depending on the level of the hotel, and if guests stay more than one night the amount of cash on hand can go up quickly.
The more cash a hotel has on hand, the more vulnerable they are to robbery or even theft from employees who have access to the till. The more cash on premises, the more potential risks and also the more unnecessary trips employees have to take to the bank to cash in the money.
How to book a hotel without a credit card
Having a hotel payment processing system in place is key to ensuring safe and instantaneous transactions online, with or without a credit card.
The great part about a payment processing system like Mews property management system is that transactions can be processed in a variety of shapes and forms whether that be an e-wallet, a debit card, a credit card or a mobile smart payment like Apple Pay or Google Pay, in any phase of the guest journey.
Another key element to accepting different kinds of payments is to have your staff trained in all aspects relating to payment, so they’re prepared to process and accept the payments that you decide are the most suitable to your business and structure size.
Accepting alternative payments as a boutique hotel
Boutique hotels or smaller hotels that don’t belong to a chain might want to offer more flexibility in the way of payments.
As boutique hoteliers will have smaller budgets, they will want to rely more on direct bookings and less on third party booking sites to avoid high commissions. In this case they can be more lenient about accepting alternative payments such as a courtesy hold, debit cards, payment upon arrival, or electronic payment methods.
The ins and outs of debit cards
While debit cards are often thought of as a close replacement for credit cards, this isn’t entirely true. Whereas credit cards have a line of credit and a series of protections for both vendors and customers, debit cards rely heavily on the actual available amount of money in the debit cardholder’s account.
In this case, it is harder to place a hold for incidental fees and other fees if the funds are not sufficient.
This hold will reduce the amount of cash the client has access to in their bank account, so hopefully this would not prevent them from spending on other extra services. On the other hand, it should be noted that most clients are in possession of a debit card, so accepting debit cards frees up space for all potential clients whether they have a credit card or not.
Use PayPal or other e-payments
PayPal and e-payments or e-wallets such as Apple Pay or Google Pay are on the rise, and accepting these forms of payments is a great alternative to credit cards.
They can be linked to your debit card or any other form of payment, and they are incredibly secure ways to pay a hotel since the physical card never comes into contact with a person, and they also require a passcode or Face ID to use them.
OTAs
OTAs will take some of the payment processing responsibilities away from your front desk staff. While many hotels will have chosen not to accept PayPal, many OTAs do, which allows guests to link their bank account as a payment method. OTAs act as a middleman between your hotel and the customer, taking the risk and responsibility away from your hotel.
While working with OTAs results in high commissions, it’s a great way to enhance your bookings because it provides more visibility to your hotel thanks to their large marketing budgets. Find out about the top 10 OTAs to boost bookings.
Conclusion
In this article we’ve looked at making hotel bookings without a credit card, why hotels usually require a credit card when booking, the potential problems that might arise when accepting a booking without a credit card and other options for payments.
It is important that hoteliers understand the different options out there, so they can choose the payment tools that are right for them.
From fraud protection to a line of credit that you can put a hold on until the guest checks out, there are many advantages to credit cards, but that isn’t to say it’s the only way.
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