How to Manage your Hotel’s Guaranteed Reservations

Guaranteed reservation of a hotel room is a reservation that is paid in advance. If a hotel, motel or a similar type of business offers guaranteed reservation service to consumers, the hotel is required to have a room available when the cardholder arrives (until checkout time the next day). The consumer, for his or her part, must cancel a confirmed reservation before 18:00 on the arrival date at the hotel (merchant’s local time). Failure to do this will allow the hotel to charge the consumer’s card a no-show charge equal to one night’s lodging.

The following procedures will be in force at check-in:

1. If a cardholder calls a hotel and requests to book a room using a credit or debit card, the hotel’s representative must explain the terms of the guaranteed reservations service, and specifically inform the cardholder the following:
   • An authorization check will be made at the time of arrival.
   • The specifics of the cancellation procedure that the cardholder must follow to avoid being charged a no-show charge equal to one night’s lodging.
2. The representative takes the cardholder’s card account information and confirms the room rate and location. Then the cardholder is issued a reservation confirmation number. It is recommended that the hotel also confirm the reservation in writing, advising the cardholder of his or her confirmation number and cancellation procedures.
3. If a cardholder who has made a reservation using a bank card calls the hotel to cancel the reservation within the agreed upon period, the hotel must cancel the reservation and issue the cardholder a cancellation number that is a verification that the reservation has been canceled. It is also recommended that the hotel confirm the cancellation in writing advising the cardholder of the cancellation number.
4. If a cardholder who has made a reservation using a bank card arrives within the specified period (until checkout time the next day), the hotel must provide a room. If the hotel is unable to provide a room, the hotel must provide at no additional charge a comparable room for one night, transportation to the other lodging and a three-minute domestic or long distance phone call, whichever the cardholder deems necessary to advise of a change of location.
5. Before the cardholder’s expected arrival, the hotel must prepare a registration card and assign a room number on that card.
6. If the cardholder does not cancel and does not stay at the hotel, the hotel may bill the cardholder for one night’s room rate (a no-show charge). The following procedures should be followed when billing the no-show charge:
   1. Complete a transaction, filling in the cardholder’s name and card account information, date of no-show, assigned room number and merchant identification, and write the words “guaranteed reservation / no-show” in place of the cardholder’s signature.
   2. Follow your usual authorization procedures.
   3. Providing the account is under the floor limit, or authorization has been given, deposit the no-show charge in the usual manner.
   4. Retain the actual no-show registration card, reflecting the assigned room number, for six months from the date the sales ticket is deposited.
7. If the account number used to guarantee the transaction that results in a no-show was unidentifiable as to a specific card issuer or was fictitious, your processing bank will bear the liability. The acquiring bank also bears the liability if the transaction is identifiable to a specific card issuer but is not identifiable to a specific account number within the card issuer.

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