The hold on your guest's card expires long before she arrives
Card networks let a hotel hold money on a card for about 30 days, so the guest who books in spring for summer arrives with nothing blocked, only a card number in your system
by Markus Busch
The booking that looks safe. A guest books in March for three nights in August. The reservation is guaranteed by card. Some hotels place a hold on the card when the booking comes in; many simply store the number. Either way, the arrivals list shows it as secured, and nobody at the desk thinks about it again until she checks in, or doesn't.
What a hold can actually do. A hold, the pre-authorization that blocks part of a guest's credit limit, has a shelf life set by the card schemes, and hotels get one of the longest. Under Visa's rules, a hotel can keep a hold for about a month, 30 or 31 days depending on the provider, and it can't be stretched. Mastercard allows 30 days, and the only way to keep it alive longer is to authorize again. The payment companies that process hotel cards publish these limits in their own technical documentation, Adyen and Revolut among them.
So the March hold, if there was one, ran out in April. For the four months before arrival, nothing on her card is set aside for you.
What you have instead. A card number and a cancellation policy. If she doesn't arrive in August, the no-show charge is a new transaction, run months after the booking, on a card that may have expired, been replaced after a fraud alert, or reached its limit on a summer of other trips. And she can dispute it.
In Europe, one more condition. The EU's banking regulator has answered exactly this question in its official guidance. When a hotel takes card details as a guarantee at booking, its later charges only count as hotel-initiated if the guest went through strong authentication when she gave the card: the code from her bank, the approval in her banking app. Visa's own guide for travel merchants describes the same sequence, with the no-show fee as its example.
Whether that step happened depends on how the booking reached you. Your own booking engine, your channel manager and each OTA pass the card along differently, and the proof of authentication doesn't always travel with it.
What to check this week. Pull your arrivals more than 30 days out that are guaranteed by card alone, and sort them by value and by date. Peak weekends and long stays go to the top. For those, ask your payment provider two questions. Can you place a fresh hold a few days before arrival? And did the booking come in with the guest's authentication on record?
Where the answer to both is no, the only guarantee that holds any money is a deposit you've actually charged.
Read also: Your non-refundable rate can now be canceled. Hopper charges the guest for it.
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