I work the front desk at a hotel, and my boss has presented me with an ethical dilemma, for which I'm seeking outside input. From my perspective, he's putting some of our guests in a financial bind, and then dodging accountability for what he's done. From his perspective, he's looking out for the company and its employees, myself included.
Here's how it works. When the hotel is close to full, my boss will run pre-authorizations on the credit cards of anyone with a room reserved for that day. He'll do this late in the morning, when check-in time is 3pm. Guests arrive and believe that they've already paid for their rooms, since they see a "pending" charge in their bank statement, from the pre-auth.
That pending charge drops off, after a day or two, but meanwhile, it ties up from $100 to $200 of their available balance. Sometimes, this means that their payment card is declined for the room charges, purely because we preauthorized it. In those cases, we are effectively charging them (temporarily) double for their first night. In particular, if they don't have the cost of their entire stay available, plus a redundant first-night charge, then we can deny them the room for lack of payment.
When this happens, my boss will explain to guests that the preauthorization was run by the third-party entity that they used for booking (e.g., Hotels dot com, Expedia, Priceline, whatever). He'll tell them that they can avoid this in the future by booking directly through us (even though our rates don't always compete with those available through third parties).
I am bothered by three things here:
- 1A. Tying up one night's stay on the guest's card is unreasonable, because it can prevent them from paying for their stay at all, creating a lose-lose situation.
- 1B. Lying to guests is wrong. When we run a preauthorization, we shouldn't be saying that Priceline did it. If we're going to run pre-auths, then the correct behavior is to be accountable for our own actions.
- 1C. The guests don't see it coming, so it is an unpleasant, inconvenient surprise.
My boss' responses are, as far I can tell, as follows:
- 2A. Everyone else does it.
- 2B. If we don't run preauths, and the guests card ends up not covering the bill, then we might lose the chance to sell that room to someone who can pay, which means we're sacrificing money that will eventually pay staff, including me.
- 2C. Guests won't like the truth, so we give them an answer that they will find acceptable.
- 2D. He runs a business, and I haven't run a business of my own, so I don't understand.
I have a hard time accepting his arguments, but he asked me what I would do, if I were the one who had to run a profitable business and support my employees. I said I'd give it some thought, so here I am. What do people think. Is this policy ethical? What is the industry standard?