Pay at Property (Pay at Hotel)

Pay at Property (also called Pay at Hotel) is a payment option in which the guest books through an OTA or direct channel but settles the room charge with the property at check-in or check-out, rather than paying the OTA or the hotel upfront at the time of booking.

On OTAs this is the classic setup of the Agency Model: the guest pays the hotel, and the hotel is invoiced for commission by the OTA after the stay. It contrasts with prepaid bookings under the Merchant Model, where the OTA collects payment, often acts as Merchant of Record, and later pays the hotel, frequently through a VCC.

How it works

1. The guest reserves a room with no payment, or only a card guarantee.
2. The hotel holds the card details as security against late cancellation or No-show.
3. The guest pays the full amount, including any Tourist Tax (City Tax), at the property.
4. The OTA sends a commission invoice, typically monthly, based on stays that actually took place.

Example

A guest books a EUR 150 room for two nights on a pay-at-property rate with a 15% commission. The guest pays EUR 300 at check-out. The hotel owes the OTA EUR 45 after the stay. If the guest cancels within the free-cancellation window, no commission is due.

Why it matters

• Conversion: pay-at-property lowers booking friction and is popular with risk-averse guests and in markets with low card usage, so it can lift Conversion Rate.
• Cash flow and risk: the hotel receives revenue directly but carries the credit risk and must chase commission invoices, and exposure to no-shows and Cancellation Rate is higher than with non-refundable prepaid rates.
• Commission control: because the hotel handles the guest payment, it can better verify actual stays and dispute commission on cancelled or no-show reservations.

Related

Agency Model, Merchant Model, NRF (Non-Refundable Rate), Cancellation Policy, Chargeback.