Hotel merchant category codes and card payments
Most independent hotels, B&Bs, guest houses and serviced apartments use merchant category code 7011. The block from 3501 to 3999 is reserved for named hotel groups. The code tells card issuers the payment is for accommodation, which matters because hotels take deposits months ahead, hold cards for incidentals and charge for no-shows.
Merchant category codes for hotels
The codes businesses in this sector come across most. Your provider sets the code when your account is opened, based on what you tell them about how you trade.
| Code | Industry | More |
|---|---|---|
| 7011 | Hotels, B&Bs and serviced apartments | Hotel payment gateway |
| 3501-3999 | Named hotel groups | Hotel payment gateway |
| 7012 | Timeshares | Hotel payment gateway |
| 7033 | Campsites and holiday parks | Hotel payment gateway |
| 7032 | Holiday and sports camps | Hotel payment gateway |
How card payments work for hotels
A hotel takes money at three different moments. A deposit or full prepayment when the room is booked, a pre-authorisation at check in to cover the room and incidentals, and a final charge at check out that may be higher or lower than the hold. Each one is a separate step, and each needs to be set up properly on the account so the card issuer sees exactly what it expects.
Pre-authorisations are where most hotels lose money without noticing. A hold that is never released ties up a guest's credit and leads to complaints. A hold that is captured for the wrong amount, or too late, can turn into a dispute. A terminal and gateway that handle holds, increments and partial captures properly are worth more to a hotel than a fraction of a percent off the rate.
Deposits, no-shows and the booking window
Rooms are often sold months ahead. That gap between payment and stay is the single biggest reason hotels are treated cautiously by card processors, because a customer who cannot travel may dispute a payment for a stay that has not happened yet.
The answer is paperwork the guest agrees to at the point of booking. Clear cancellation terms, a booking confirmation that repeats them, and card details stored as a token rather than a number in a spreadsheet. With those in place, a no-show charge is a contract being honoured rather than a surprise on a statement.
Online bookings, the front desk and the phone
Most hotels now take money in four places. The website booking engine, the front desk terminal, the phone, and payment links sent for deposits and group bookings. Running all four on one account with one settlement report saves hours of reconciliation every week, and means a guest who books online and pays the balance at the desk is one customer, not two.
Card payments for hotels, opinions from our specialists
Short views from our specialists, published to start a conversation. Agree or disagree, tell them on LinkedIn.
Most hotels spend longer choosing towels than choosing how they take payments. A hold you never released costs you a guest review, and a review is worth far more than a few basis points off your rate.
I would push back a little. Guests forgive a hold. What they do not forgive is not being told about it. Say the amount and when it drops off at check in, and the review problem mostly goes away.
What to check in a card payments setup for hotels
Three questions worth asking any provider, and the eCom Pay answer.
Pre-authorisation that you control
Holds, increments and partial captures from the terminal and the dashboard, so the amount charged always matches the bill.
Deposits by link
Payment links for deposits and group bookings, settled with the rest of your takings rather than through a separate account.
Settlement you can plan around
Next working day settlement with no rolling reserve, so a busy season funds itself.
Questions about merchant category codes for hotels
What is the merchant category code for a hotel?
Independent hotels, B&Bs, guest houses and serviced apartments normally use 7011. Codes 3501 to 3999 are reserved for named hotel groups, timeshares use 7012 and campsites and holiday parks use 7033. The code is set by your payment provider when the account is opened.
Why are hotels treated as high risk by some payment providers?
Because guests pay for a stay that may be months away, cards are held for incidentals and no-shows are charged. Each of those can lead to a dispute if the terms are not clear. A provider that understands hotels sets the account up for that pattern from day one.
Can a hotel charge a no-show fee to a card?
Yes, where the guest agreed to the cancellation terms when booking and the card was stored for that purpose. Keeping the confirmation that shows the guest accepted the terms is what makes the charge stand up if it is questioned later.
More industry guides
Card payments for hotels, set up properly
Approved in 24 hours once your documents are in, settled the next working day with no rolling reserve, and a UK team on the phone 24/7.