How Much Deposit Should You Collect from Guests for Online Bookings

Everyone knows how online booking works these days. A small deposit is collected from the guest at the time of confirmation. If you use one of the services that requires you to manually confirm bookings, contact your guests, and get deposit monies yourself, then your booking method is still in the stone ages. And believe me, there are still quite a few of this type of reservation service that claims “instant booking”, but cannot deliver. Furthermore, if your online booking method involves a Paypal interface, know that this method still does not work for guests in many regions around the world. You might also have heard that a Paypal payment interface instantly signals to many that your website is amateur and unprofessional. This is not exactly the reputation you want to develop for your website.

First, let me tell you that you absolutely need a professional third party service that is able to collect more than just Visa and Mastercard. You need a service that is able to collect at least 4 major global card types. If you feature online booking on your own website, know that almost all booking services are able to collect 5-10% deposit for your bookings. But is this enough? No. You should be collecting from 30% to 75% deposit for every booking taken on your website. This is for 2 reasons. One, guests who have found your website, and are interested in booking with you are serious about staying with you. They know that if they’re paying on your website, they’re going to have some personal interaction with you, and their reputation is on the line. Fraud transactions on a hotel’s own website is low. Second, since you know the guest is serious, you want to collect a reasonably high deposit to secure their booking, and eliminate any possibility of problems in the event of a cancellation or no-show. Instant World Booking recommends collecting either 35% or 50% as the optimal deposit for most hotels, hostels, and bed & breakfasts.

Instant World Booking is one of the only services that enables you to collect more than 10% deposit at time of booking. In fact, they can enable collection of up to 100% of your bookings at reservation time, effectively enabling you to collect credit cards right online from your own website. Instant World Booking takes this service one step further, offering full no-show and cancellation protection. With this service, Instant World Booking guarantees you receive your deposits, even in the event that a guest cancels late or does not show up.

We’ve been giving the latest on some controversial topics about marketing your hotel or hostel online. We uncover the world of online booking and marketing in a way that hasn’t been done before. Check out more advice at our blog. We’ll lead you to the most effective and low-cost solutions for marketing your property.