Mastering Credit Card Best Practices for Luxury Hotels 

A lot of money is spent at luxury hotels—most of which is processed by credit cards. But credit card processing fees eat into your bottom line, often costing hundreds of thousands, if not millions, each year for a single hotel location. Following the best practices below can help you save money and keep your guests happy at the same time. 

Transparency is Key 

Failing to be transparent about your prices can cost you much more than just an unhappy guest—it can lead to chargebacks and potential legal penalties for non-compliance. For example, credit card surcharge laws vary by state. Even in the states where surcharging is legal, the law often requires this fee to be clearly stated on the website and on-premises. There’s no reason to be deceptive when dealing with luxury consumers willing to spend more than the average person. Any additional costs likely won’t upset the guest if you’re transparent. 

Make In-Person Transactions More Appealing 

Collecting credit card information online for holds and deposits is obviously standard practice in the luxury hotel industry. But when it comes time for the bill to be paid at checkout, try to collect the card again instead of charging the card on file. Online and on-file transactions are more expensive to process than card payments that are swiped, dipped, or tapped in person using a physical card terminal. 

Use Your Effective Rate For Improved Accuracy 

Credit card processing rates can significantly vary per transaction. American Express transactions will have a different fee than Visa and Mastercard. Corporate cards will have different rates than consumer cards. You’ll even see rate variations for cards on the same network, such as travel rewards cards. The easiest and most accurate way to determine the true cost of processing a card is by calculating your effective rate—the total processing fees you’ve paid in a billing cycle divided by total net sales. 

Audit Your Statements 

Credit card processors are notorious for being sneaky with fees. Monthly statements are often difficult to read, and additional fees are sometimes added without any clear warning. One of the easiest ways to spot these extra charges is by reviewing your statements each month. Compare your newest statement against last month’s and the previous month’s to spot any outliers or line items that appear on one or not the other. You can’t get those fees removed if you can’t find them.

Always Negotiate 

Credit card processing is negotiable. It’s cheaper and easier to negotiate rates with your existing processor instead of switching to another one. If you’re not making progress on your own, you can use an experienced merchant consultant to negotiate on your behalf. At MCC, we’ve had tremendous success negotiating rates for our clients in the luxury hotel space. In one particular case, we helped a hotel save over $350,000 in annual processing fees and got them a $110,000 refund on hidden charges that were not part of their contract. 

In summary, there are several different ways to save money on credit card processing when you’re operating a luxury hotel. These small steps can increase your profit margins without having to change your equipment or switch processors. To find out how much you can save, get a free audit and analysis from MCC.