How do hotels get away with this?

Imagine you go to your local supermarket to buy a loaf of bread. As you enter, you’re stopped by a member of staff and asked to pay a deposit of £10, just in case you pick up a pint of milk on your way round. You’d likely go somewhere else. Or if you book a plane ticket, then when you reach the check in desk the agent says you have to pay an extra £100 just in case you want to buy a sandwich on board or you’re not getting a boarding pass? Again, madness. So how do hotels get away with a similar thing?
When I started staying in hotels on a regular basis back in 2012, the price advertised was the price you were charged. Yet in early 2013 in a hotel in Faro, they tried to take way more than agreed. When i queried this, I was told “It’s for incidentals” and that the extra would be released upon check out. Fine then, and I put it down to a one off. Although over the following years its seemingly become more and more of a standard practice. Now before I get a ton of comments saying that they’re not actually taking the money, and that its only a pre-authorisation – I know. But the money is still blocked from your account for at least a week. And in some cases, the amount pre authorised isn’t an insignificant amount either. Sometimes, it isn’t just a case of a pre-authorisation. At the MGM Grand in Las Vegas, they wanted to actually take the money from my account. I noticed there were a few others complaining about this at check in but the attitude of the staff was “pay up, or go elsewhere”. In order to check in, I had to shell out an extra $600 which would be refunded upon check out. And as this was an actual debit from my account as opposed to a pre authorisation, I ended up losing a few pounds due to not only paying a foreign transaction fee (this was in the days before Curve) that wasn’t refunded, but also the exchange rate changing in the few days before paying up and the refund hitting my account.
Probably the one incident that sticks in my mind with this was when I stayed at the DoubleTree in Boston. Having flown from London-Toronto-Boston, I was in need of a bit of a rest! When I reached the hotel, again, no mention was made of any extras to be charged (a common trick I’ve noticed) just an amount that was WAY more than the £450ish cost of the room for the three nights I would be staying. As I was paying with a credit card that had a £500 limit, and they were trying to take well over $1000, it obviously declined. I decided to play hardball with their game, just to see what would actually happen. I asked why I was being charged so much, to which she replied that there was a $200/night incidental fee. I said I didn’t wish to pay this and I’ll just pay for the room thanks. She just gave me a blank look, and said I have to. Again, I was still playing hardball to see how far I could push it and told her that I only had enough on my card to cover the cost of the room on that card – which was true. Again, she shrugged and said I’d have to pay cash instead then. Sorry, I don’t have that amount of cash on me. At this point she started delving into the small print, where all it said was that “An incidental fee may be charged”. I pointed out that this was a little on the vague side, and how can they justify charging way more than the nightly rate just in case? Again, I received a blank look, a shrug and said I had to find the money somehow. I knew when I was beaten and used another card to pay the $600. Upon check out, I made a point of telling them to release the pre-authorisation, to which they said they had. It was a good seven days later that the funds were made available in my account. At that point I was pretty loyal to Hilton and held Gold status with them – in fact I was just one stay off gaining their top tier Diamond status.

I decided to make a dummy booking on their website for research purposes for this article, and whilst it does mention a hold may be placed for incidentals, it doesn’t go as far as to mention how much or indeed about it being mandatory.

Since then, I’ve stayed in the grand total of one Hilton and shifted my loyalty to IHG. Not that they don’t play the same game either. The same trick was pulled at the Intercontinental in Istanbul earlier this year, and again, I decided to play them at their own game. The resolution this time was what I thought was paying the equivalent of £15 for the contents of the minibar. Well, I never use the minibar, but I’d rather pay £15 then have what was likely over £100 blocked from my account for an unspecified time. Although something was lost in translation, and what actually happened was that I paid £15 for a member of staff to come and empty the minibar instead. Do they trust their guests so little? Upon making a dummy booking, I couldn’t find any mention of a pre-authority being taken. Only another real vague sentence in the small print about “other hotel specific charges may apply”.
I have had some success when challenging this however. At the Park Inn in Malmo, they tried the trick of putting in an amount higher than what I was due to pay and hoping I wouldn’t notice. When I questioned it this time, they were more flexible and said if I didn’t wish to pay the incidental fee, then I could settle up there and then. Fine. Another success story was at the Hilton Heathrow T5, where they were completely upfront about any incidental charges, and pro actively asked whether I wished to leave my card open or settle the bill there and then. Again, I have no issues with this whatsoever. Its when they try and hide it and then force it upon you I have issue with.
The amount the hotels place a hold on seems to be completely random too. On a trip to the US last year, upon checking into the Crowne Plaza in Portland, there was a $25 hold placed on my account. That’s reasonable I guess, however as there wasn’t any mini-bar or restaurant on site, I fail to see the need. I remember mentioning to the check in agent on that occasion that $25 was the lowest pre-authorisation that I’d ever had, and that a lot of places want at least $100. She seemed shocked and replied that there was no need to be charging that much. The following day, I checked into the Holiday Inn Long Beach, and it was a totally different story. On every check in desk, there was a sign saying:

“Please be advised that the use of debit or credit cards will auhorise [sic] us to place a hold on your account.An amount equal to your room rate, applicable taxes, and $100 for incidentals for the entire duration of your stay will be authorised upon check-in. Any unused amounts will be released back to your account same day from this hotel. Depending on your bank’s/ card’s processing procedures after your departure date. Use of a DEBIT CARD upon check-in will immediately withdraw any authorised amount from your account. Please be aware that Holiday Inn Long Beach Downtown is not responsible for any fees that your [sic] may incur from your financial institution from using your Debit or Credit card.We do not accept personal checks [sic] or cash deposits.Credit or Debit cards must have cardholders name and must match government issued ID.Prepaid debit cards will not be accepted”

If you ignore the dodgy spelling and grammar, its basically saying you need to provide an extra $100 in order to check in and this payment can only be made on a card. Very welcoming. This is the only time I’ve seen it made so clear that they will be taking a pre authorisation, so I can only assume this particular hotel has had a few people trying to argue the case before. Its not like anything has been mentioned in the small print when you go to book a room here. In fairness, at least they didn’t try and hide these extra charges when you actually arrive at the hotel, like a lot of places do.
Another thing I have noticed is that once checked out, the hotel seems quite happy to push the release of the pre-authorisation on to your bank. Now I’m not going to pretend that I know the in’s and out’s of how the process works, although upon checking out of the Parc55 in San Francisco last year, I got a notification on my phone saying the amount had been released before I’d left the lobby. So how come on this occasion, my bank could release the hold almost instantly where as in the case of leaving the Holiday Inn in Montreal earlier this year, I had to contact both my bank and the hotel after 7 days because the funds were still not available. The hotel blamed it on my bank being slow, and the bank blamed it on the hotel not having released the hold. So who is responsible for releasing the hold?
The final incident related to this subject, and what spurred me into writing this piece is for an upcoming stay in Lisbon. Usually, free cancellation generally means you pay upon arrival at the hotel. This is an option I usually go for providing it doesn’t cost too much more than the advance rate as I’ve learned over the years how plans can change through no fault of your own. So its good to have a little bit of flexibility. When booking the Eurostars Das Letras, I again selected the free cancellation option. It was pretty clear that payment would be taken at the hotel, and that the pay today price would be 0. Even reading the small print made no reason to think otherwise.
Well, guess what? Upon checking my bank account the morning after booking, they had indeed taken €20.
Sorry, but that’s not my idea of “paying at the hotel” and “0.00 to pay today”. Sure, it’s not a ground breaking amount, but that’s not the point. Again, it’s only showing as pending, so a pre-authorisation, but it’s effectively funds that are no longer available to me. And once more, no indication was made about this hold being made. Quite the opposite in fact – they were quite clear that nothing would be taken until I arrived at the hotel.
I have a reasonably big trip coming up in September, which will involve at least a dozen hotel stays. The main concern I have is will I need to have an extra $1200 on tap for them all to dip into? As mentioned, they’re not exactly quick with releasing the funds once you’ve checked out so if you’re staying in a few places within a few days, these extra charges soon mount up – as mentioned, they’re only pre-authorisations, so they’re not taking the money as such – but the funds are still unavailable to you until they’re released.
As briefly touched upon earlier in the article, do hotels trust their customers so little that they have to take the guilty until proven innocent stance? Sure, you no doubt do get a few people out there who do try and pull a few scams, however I suspect the vast majority of people are trustworthy. So why make things difficult for majority because of the minority? Most places require a credit card, name and address to check in so if you were to trash the room for example, the hotel would be able to find them and charge them without too much hassle I would have thought. Of course, the more common reason for this is that you can use the minibar or onsite restaurant and the hotel can take the charges out of the pre-authorisation they have taken. But I rarely use either facility, and I’m pretty sure most savvy travellers rarely do either as they’re known to be a little on the pricey side? So why insist on everyone paying up anyway? Why can’t the hotel restaurant operate like every other on the face of the planet and give you the bill when you leave? Why not have locking mini bars? If a pre-authorisation hasn’t been given, lock it remotely. The cynical side of me says that there’s some way that the hotels are earning a bit extra on the side from this. Take the hotel in Long Beach for example – it has 134 rooms, so if the hotel was full there would be $13,400 sat somewhere. Worse still is the case of the MGM Grand in Las Vegas where they actually took the money rather than place a hold. They have 6852 rooms, and from what I recall they took $200/night. That’s over ONE MILLION dollars they have in their account every night providing the place is full. That sure is a lot of interest they’ll be earning on everyone elses cash.
Will this practice stop? I doubt it. As mentioned its slowly gone from here and there to pretty much expected over the last few years. What would be better though is if they were more upfront about the charges and if you didn’t wish to pay then accept that. Not bully their customer into it and basically tell them to go elsewhere if they don’t pay up. In the case of a once loyal Hilton customer right here, all this did, along with the attitude of the hotel manager, was encourage me to go elsewhere for my hotel stays. Surely I cant be the only person in the world who finds this practice just a little shady?