The Evils of Hidden Hotel Holds
Exposing Fees and Charges That Throw Off a Travel Budget
When budgeting for a trip, many travelers are unaware that many hotels put holds on additional funds when checking in. What are these holds and is it legal to do it?
So you book your hotel stay, you check in and the front desk clerk asks for a credit card to “cover incidentals during your stay.” You hand over your information and hours later go to use the same card to pay for your restaurant bill…only to find your card is declined. What happened?
Well, unfortunately, it probably means you were hit with one of the ugly hidden secrets of staying in a hotel nowadays – the often undisclosed hold put on credit cards to make sure the hotel gets paid if you charge anything to your room bill.
Why Do Hotels Hold These Funds?
It used to be you would just pay for your stay and that would be it. However with so many hotels today offering additional room amenities for a charge, such as pay-per-view movies, room service and mini bars, they have also run into the problem of guests checking out without paying. Then upon trying to charge the card used to pay the bill, they would find the card maxed out or closed, meaning the hotel wouldn’t get compensated for charges made. Multiply that times thousands of guests a year and that’s a lot of money the hotels don’t get back.
So, to compensate, hotels are now putting additional monetary holds on cards used for payment of the room. They average the additional room charges that guests regularly add to their hotel bills and then request a hold on funds at check-in to cover that average. As charges appear on the hotel bill, they are automatically covered by these holds, so the hotel isn’t left high and dry.
Sounds simple and fair, right? If only it were as straightforward as that.
Why These Holds Cause Problems For Budget Travelers
Hands up…how many of you have been told at check-in to a hotel they need a credit card to cover incidentals? Probably most of you.
Now how many of you have been told that money is being held off these cards immediately at check-in, how much the hold charge is and when it will be released back to your card for use? Probably none of you.
And there lies the problem. As a budget traveler, you often plan your trip down to the finest detail when it comes to how much you have to spend and what you’ll be spending it on. So imagine how much a $50 hold on your card by the hotel can throw off your entire budget. And usually hotels charge this hold for each day of your stay. That means if you’re staying there three days, that is three days worth of holds on your card, too. It adds up fast. Not to mention, the more upscale a hotel is, the higher the hold will be.
To put this in perspective, you can sometimes get a night at the MGM Grand Hotel in Las Vegas for less than $100 a night, which is an amazing deal…until you check in and find out they levy an additional “incidentals” hold on your card for $150 to $500 per night of your stay on top of the actual room charge. Ouch!
Add to this the fact that many guests are not even informed by the front desk clerk of the holds and you can see where a budget can immediately be thrown off course, leaving the traveler stranded and broke.
Debit Cards Pose Additional Problems
Many budget travelers use debit cards instead of credit cards, but this leads to even more problems when dealing with these hotel holds. Why? Since debit cards instantly access funds in your bank account, this means a hold on the card is actually freezing money in your bank from being used.
That means that $300 you had budgeted on your debit card for food can instantly be frozen from use by the hotel hold and trying to pay for the dinner check can lead to the embarrassment of being told your card has been declined.
Not to mention a debit card hold can take anywhere from seven days to three weeks to be cleared from your account. Multiply that times how many hotel nights you plan to use and you can find yourself in deep trouble before the trip is even done.
Is It Legal For Them To Do This?
Unfortunately, yes. It’s highly unethical for them to not disclose the hold at check in and the amount they are holding, but they can legally do it. It’s also become common for hotels to charge you a “resort fee” for these incidentals and those are also legal, as long as the fee and amount are posted at the check-in desk.
But you can also not let them take the hold or at least reduce the hold’s impact on your trip budget. We’ll tell you how in the next article, How to Avoid Hidden Hotel Holds.
Have You Encountered a Hidden Hotel Hold?
Talk about it in the discussion threads below.
