Pearson New International Edition International pcl tp indd 1

Monitoring Credit Limits
FOMs must monitor guest purchases and credit limits daily, because guests can
quickly spend up to and exceed their authorized credit limits. Consider a guest stay-
ing one night in a $100 per night room; this guest’s payment card was blocked for
$200 at check-in. Unless controls are in place, the guest can spend several hundred
dollars in the hotel’s restaurant hosting a large group of friends and request that these
charges be billed to the room. In this case, the guest will have quickly exceeded the
authorized credit limit. If the guest’s card is reauthorized by front office staff to
include this larger amount, no difficulty ensues. Assume, however, that the guest sig-
nificantly exceeds the credit limit, which is not reauthorized to increase the blocked
funds. At check-out, there may be insufficient funds available to completely settle the
guest’s account. Therefore, FOMs must devise systems to ensure that all guest
accounts are monitored daily to confirm that credit limits are not exceeded.
Tactfully dealing with guests who are approaching or exceeding their credit limit
is a skill that FOMs must learn quickly. Extending additional credit is one way to
avoid the situation of guests exceeding their credit limits; accepting partial (or full)
payment is another way. However, FOMs are under no legal obligation to extend
additional credit to guests.
When guests check in, it is reasonable to assume they will pay their bills.
Hoteliers may or may not extend credit, as long as the methods for doing so do not
unlawfully discriminate among guests. Assume a guest exceeds his credit limit and
refuses to pay or to offer an alternative method of establishing credit. He can be
removed from the hotel for nonpayment because, subject to local laws, a transient
guest can be removed from a room for nonpayment of charges.
Should the hotel remove a guest who has exceeded his or her payment card limit
and, therefore, is unable to pay? This is a judgment call to be made by the FOM. In
cases of lost cards or travelers checks, blocked funds from other merchants, or for a vari-
ety of other circumstances, a guest’s inability to pay may only be temporary. FOMs
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