How Do Hotel Deposits Work?

When a guest makes a payment before he checks in, or in other words, before he consumes any of the hotel’s products or services, the payment is an advanced deposit. Deposits sit in a guest’s bill as a credit, meaning the hotel always owes the guest this money, if it is not used against charges to settle the bill.

What does it mean when a hotel asks for a deposit?

It can mean one of the below two:

1. To guarantee your booking

When booking, the reservations agent asks for a deposit to confirm your booking. The hotel guarantees the booking if credit card details are provided, or the booking is coming from a trusted source, such as the guest’s company. The hotel won’t charge the credit card and keep it in the file in case, of cancellation or no-show, where the charges or penalty might apply

Can you pay hotel deposit with cash to guarantee the booking? Yes, you can pay the deposit through other ways like bank transfer if you are not willing to provide your credit card to the hotel agent.

With a guaranteed reservation, you can late check in, however, with a non-guaranteed reservation, the hotel has the right to cancel the reservation on or after the specified hold time (such as 2PM Release, 6PM Release, etc)on the arrival date.

2. As a security deposit

Usually, at check-in, hotels take a deposit to cover the total stay’s room charges, a fixed amount for incidentals per day during the stay. This ensures covering any incidental charges and (in the case of) damages to the room.

Here is an example deposit rule: