Debt Collection Strategies For Hotels

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Debt Collection Strategies For Hotels

Hotels offer lodging accommodations on a short term basis. They usually provide additional amenities, like meals, swimming pools, and different guest services. Some larger hotels may feature conference rooms and other facilities for corporate travelers. As such, they’re used by traveling families, in addition to commercial travelers.

Whereas hotels provide great conveniences and much-needed services, they can additionally face money flow challenges from unpaid customers. These delinquent, past due accounts mostly result from:

Long distance charges- the hotel guest leaves behind unpaid telephone charges incurred throughout their stay.
NSF checks
Credit card chargebacks- This can happen when a guest’s line of credit which is established upon check in is exceeded during their stay. Without the guest’s specific approval, it may be troublesome for the hotel to apply the further charges.
Travel Agency Discounts- Agencies may have booked the hotel property but only partially paid the bill.
Late Checkouts- Guests who have paid in advance for their hotel may incur further charges when they stay beyond their predetermined checkout time.
Function Accounts- An events organizer may pay an initial deposit to the hotel, but fail to pay the rest when the bill is due.

Alternative debt collection problems are hotel skips and open billing, where open company accounts with the hotel are not paid when the bills are sent. Any hotel property wanting to keep on top of their accounts receivable and minimize outstanding unpaid bills must implement sound debt collection strategies.

Internal Debt Collection Strategies

One of the first things any hotel property may do to improve on their internal debt collections is asking for extra info on hotel registration forms. For instance, asking for the guest’s home phone number is terribly important. In the past, numerous properties have not asked for this. Without this, successful collections can be quite difficult.

Whereas a few guests could not want to provide that info, a possible response can be asking for emergency contact information. This will result in additional reliable phone numbers for guests. And it'll prove very useful should these accounts go delinquent plus you would like to contact the guest.

Early Intervention Is Very Crucial

Whether or not the hotel property is singularly-owned or handled by a property management firm, when it comes to overdue accounts early intervention is key to successful debt recovery, and a very important debt collection strategy.

When a bill goes unpaid, an individual assigned to handle late accounts must contact the debtor to rectify the matter. In fact, when it comes to NSF checks, they are meant to be handled immediately. Don’t settle for another check, but ask for an alternative method of payment, such as a credit or debit card.

If you've got an ongoing open account with a corporate client, and/or you're owed by an events planner, you could provide payment arrangements to settle the late account(s). At any rate, consistent contact via reminder notices and the phone is critical at this stage. The most successful recoveries take place within the first sixty to 90 days of a past due bill.

If your efforts haven’t proven successful in getting payment in full or ongoing payment arrangements, its time to think about outsourcing to a debt collection agency. Statistics provide evidence that if an account isn’t settled inside ninety days, internal efforts aren’t likely to ever recover the monies. Typically, small balances are written off as uncollectible. Collection agencies can help tremendously if they’re brought in early enough.

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