When you book a hotel room, have you ever noticed an extra charge on your credit card before arriving? This isn’t a mistake—it’s called a pre-authorization, and it plays a crucial role in the booking process. But what exactly is pre-authorization, and why do hotels use it?
Consider you’re reserving a room for your next trip. The hotel wants to ensure that your payment method is valid and that funds are available to cover your stay. That’s where pre-authorization hotel booking comes in. It’s like a security check, temporarily holding a certain amount on your card to guarantee your booking.
So, how does this impact you? And what should you keep in mind when planning your stay? This blog will help you understand the ins and outs of hotel pre-authorization and how it ensures a smooth check-in experience.
What is the Hotel Booking Pre-Authorization Process?
Pre-authorization is when a hotel temporarily holds a certain amount of funds on your credit or debit card. This amount is not charged to your account but is reserved by the hotel to cover potential costs associated with your stay. The funds are typically held for a period, often until check-out, and released once the final charges are settled.
Why Do Hotels Use Pre-Authorization?
Hotels use pre-authorization hotel booking for several reasons:
- Guaranteeing Reservation : Pre-authorization assures the hotel you have the financial means to cover your stay. It is crucial for the hotel’s revenue assurance and your reservation’s security.
- Covering Incidentals : The pre-authorization amount often covers incidental charges such as room service, mini-bar usage, or damages. This way, the hotel can cover additional costs without hassle at check-out.
- Reducing No-Shows : By holding a deposit, hotels can deter guests from canceling or not showing up, which can be costly.
How Does Pre-Authorization Work?
Here’s a step-by-step look at how the hotel booking pre-authorization process typically works:
- At Booking : When you make a reservation, the hotel may ask for your credit card details. This information is used to initiate the pre-authorization.
- During Check-In : Upon arrival, the hotel may process the pre-authorization on your card. The amount held can vary based on the hotel’s policies and the length of your stay.
- During Your Stay : The pre-authorization hotel booking amount is on hold but not deducted from your account. It acts as a security deposit for the hotel.
- Check-Out : After you check out, the hotel will finalize the bill. Any extra charges or adjustments will be added to your bill, and the pre-authorized amount will be released if unused.
- Release of Funds : If no additional charges or damages exist, the pre-authorization hold is released, usually within a few business days. However, depending on your bank or card issuer, it can take longer.
Key Points to Remember
- Amount Held : The pre-authorization hotel booking amount is typically higher than your room rate to cover potential extra charges. It’s important to check with the hotel about how much will be held and for how long.
- Impact on Your Available Balance : Although the funds are not charged, they are temporarily unavailable. Ensure you have enough available credit to avoid any issues with your account balance.
- Refund Timing : The release of pre-authorized funds can vary. While many hotels process this quickly, some banks or card issuers might take longer. Contact your hotel if you notice any delays beyond the expected period.
- Not a Charge : Pre-authorization hotel booking is not the same as a charge. Only the actual amount used or any damages are charged to your card at check-out.
- Different from a Deposit : Unlike a deposit, which is often used to secure the booking and is refundable or deducted from the final bill, pre-authorization is a temporary hold and not an actual charge until final settlement.
Tips for a Smooth Experience
- Understand the Hotel’s Policy : Before booking, inquire about the hotel’s pre-authorization policy. Knowing the amount and duration of the hold can help you plan your finances accordingly.
- Monitor Your Account : Monitor your account to ensure the pre-authorization hotel booking hold is properly released after check-out. When using high-limit credit cards, there’s a risk that some hotels might charge extra amounts, making the process of getting chargebacks a hassle. To avoid this, consider using one-time virtual cards. These cards ensure that only the intended amount is held, preventing any unexpected charges.
- Prepare for Your Stay : Ensure you have sufficient credit available on your card to cover the hotel booking pre-authorization process hold. This will prevent any issues at check-in.
- Communicate Clearly : If you have any concerns or special requirements, communicate them to the hotel in advance. Clear communication can help avoid misunderstandings regarding charges.
Switch to itilite Corporate Card
Now that you have a clear understanding of how pre-authorization works and why hotels use it to secure your booking, it’s important to note how itilite corporate cards can simplify this process.
itilite creates a one-time virtual card directly linked to your reservation for each booking, ensuring that your pre-authorization amount is properly managed. This approach prevents common issues, such as hotels blocking excessively high amounts beyond the booking value, which can occur with traditional credit cards that have higher limits.
With itilite, your pre-authorization hotel booking is handled efficiently, safeguarding your funds and streamlining the check-in process. And the best part? Travelers gain access to a booking-specific card, ensuring a smooth check-in process every time.
If you want to explore more benefits, book a free demo with us today.
