How To Accept Payments For A Hotel

A hotel handles more distinct payment situations than almost any business: bookings months ahead through channels it does not control, authorisation holds at check-in, incidentals charged to a room, group contracts, and departments that each sell differently. The setup has to hold all of it without the front desk becoming a bottleneck. Here is how.

Updated July 28, 2026. Figures cited below; reviewed quarterly.

How hotel money actually arrives

Four flows. Room revenue: direct bookings where you keep the full rate, and channel bookings that arrive net of commission on the channel's timetable. Incidentals: food, beverage, spa, parking, and minibar charged to the room and settled at departure. Group and event business: weddings, conferences, and blocks, contracted with deposits and staged payments. And departmental revenue from restaurant, bar, and spa operations that also serve non-guests.

By the numbers (July 28, 2026)

On Square's 2026 US card, this lane is 2.6% + 15¢ in person. A $780 guest folio at departure carries $20.43 in fees. Settled at the desk against the folio, with the authorisation hold released promptly and the release timing explained rather than promised.

Authorisation holds and the guest experience

A hold placed at check-in covers the room and anticipated incidentals, and it is the most misunderstood part of hotel payments from the guest's side. Disclose the amount and the release timing at booking and again at check-in, because a guest whose card is held for several hundred dollars and who did not expect it is the guest at your desk complaining. Release holds promptly at departure and understand that the actual release timing depends on the guest's own bank, which is worth explaining rather than promising.

Channel commissions and the direct booking case

Channel commission is typically the largest single cost on a booking, which makes direct reservations materially more profitable at the same rate. Make direct easy and worthwhile: a booking engine that works on a phone, a rate or benefit that rewards booking direct within your channel agreements, and a card on file for repeat guests. Even a modest shift in channel mix moves the bottom line more than most operational efficiencies, which is why the booking engine deserves attention that housekeeping software usually gets first.

Group business and staged contracts

Weddings, conferences, and room blocks are contracts rather than reservations: a signed agreement, a deposit securing the dates, staged payments approaching the event, a cut-off date for the block, attrition and cancellation clauses, and a final settlement after. Never let a group depart with a balance outstanding. Attrition clauses in particular are where hotels either recover the cost of held inventory or absorb it, and they only work if they were written clearly and applied consistently.

Departments, chargebacks, and the tax layer

Restaurant, bar, and spa operations sell to guests and to the public, and keeping departmental revenue distinguishable is what lets management see which department actually earns. On disputes, hotel chargebacks are common on no-shows, cancellations, and incidentals, and they are defended with signed registration cards, disclosed policies, and itemised folios. Occupancy and tourism taxes apply in most jurisdictions with specific collection and remittance requirements, and channel platforms handle some of these in some places and not others, which is worth confirming precisely rather than assuming.

Sources

• NerdWallet — Square Fees: Calculator and Pricing for 2026
• Swipesum — Square Fees Explained 2026 (verified against Square's published pricing)

What people ask me

How should authorisation holds be handled?

Disclosed at booking and again at check-in with the amount and release timing, then released promptly, while explaining that actual release depends on the guest's own bank.

Why do direct bookings matter so much?

Channel commission is typically the largest single cost on a booking, so even a modest shift in channel mix moves the bottom line more than most operational efficiencies.

How should group business be contracted?

With a signed agreement, deposit securing dates, staged payments, a block cut-off, attrition and cancellation clauses, and no group departing with a balance outstanding.

How are hotel chargebacks defended?

With signed registration cards, disclosed policies, and itemised folios, since disputes cluster around no-shows, cancellations, and incidentals.

What about occupancy taxes?

They apply in most jurisdictions with specific collection and remittance requirements, and channels handle some in some places only, which needs confirming precisely.

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