When booking a reservation for a hotel room, guest may be asked to make an advance deposit, which is money paid, usually by check or credit card, by a guest that is generally equal to one night's lodging fees. The purpose of the advance deposit is to guarantee a reservation, and the full amount is applied to the guest's bill upon check-out.
Also known as a guarantee, these advance deposits help hotels, motels, inns, and other forms of accommodation prepare for guests arrival, budget finances, and cover costs of last-minute cancellations.
Although not all hotel rooms require an advance deposit, the practice is becoming more and more commonplace, especially among luxury and more expensive accommodations like Hilton, Four Seasons, Ritz-Carlton, and Park Hyatt chains.
What to Check for at Checking-In
When you arrive at the hotel for check-in, the concierge or hotel worker behind the front desk will always ask for a credit or debit card to put the room charges on, but before they do they should also inform you of how much your card will be authorized in advance for incidentals or damages.
This charge is considered the advance deposit and typically is less than $100 per day of your stay, though can increase with larger and more expensive hotels. In any case, reputable hotels should inform guests of this "down payment" at the time of booking as to avoid any unnecessary surprises. At this time, hotels may also notify you of additional fees like parking, pet charges, or cleaning fees, if applicable, though these, too, should be listed on the hotel's website.
Warning: If you're using a debit card instead of a credit card to pay for your hotel room, the hotel will automatically deduct the full amount of the advance deposit from your bank account. Unlike credit cards, which allow for a "hold" on the funds available to your credit, debit cards are attached only to direct funds, so be careful you don't overdraft your account before you've even stayed in the room!
Always Check the Cancellation Policy Before Booking
Because advance deposits can get quite expensive on higher-caliber hotels like the Ritz-Carlton, guests hoping to reserve a room but unsure if they'll make it in time for check-in should always remember to check the specific hotel's cancellation policy, which oftentimes includes a passage that says advance deposits are non-refundable.
Especially when booking on popular holidays or when a big event is happening, hotels may increase the strictness of their cancellation policies. In any case, most also require advanced notice—which ranges from 24-hours to a full week before the reservation date—before cancellation to avoid any additional fees.
Also, if you are booking your hotel room indirectly through a third-party website like Travelocity, Expedia, or Priceline, these companies may have additional cancellation policies that differ from the hotel chains they represent. Be sure to check both the hotel and the website to avoid unnecessary cancellation fees or losing your advance deposit.