Payment terms let you offer guests the option, at no additional cost, to pay in up to three installments. This can help you improve conversions especially on large bookings and long lead times.
Based on your booking policy, the booking amount, and the lead time of the reservation, Hospitable may offer the guest the option to pay in two or three payments, instead of one upfront payment. Guests can always choose to pay 100% upfront if they prefer.
How payment terms are calculated
You have two options on your Booking Policy Manager to enable payment terms:
Align your payment terms with your cancellation policy, or
Set a custom payment schedule.
By default, your booking policy will be set to the first option, which saves you the effort of setting your own schedule. Whatever your schedule is, we check each reservation's amount and lead time to see if it qualifies for one, two, or three payments.
We will only offer payment terms on reservations when the total cost to the guest is greater than $100. We also check that the lead time is far enough in advance to give us time to collect more than one payment. If those two conditions are met, we then offer payment terms according to your payment schedule. We discuss payment schedules in the next sections.
Aligning payment terms with your cancellation policy
We recommend using this option to align your payment terms with your cancellation policy. This insures that Hospitable always collects the appropriate amount to cover the non-refundable portion of your booking if the guest cancels.
Let's consider an example of a $10,000 reservation booked six months in advance:
Checkpoint | Cancellation Policy | Payment terms |
Booking, T-180 days | 100% refund until 45 days before check-in | First payment is a 20% deposit of $2,000 at booking |
T-45 days | 50% refund until 10 days before check-in | Second payment of $3,000 to fund the 50% non-refundable portion of the booking |
T-10 days | Non-refundable within 10 days | Third payment of $5,000 balance |
When a booking is made with a 100% refundable policy, we collect a 20% deposit as the first payment.
If the same $10k reservation in the example above was booked 30 days in advance, we would only be able to offer two payments of $5k each, as the booking would be 50% non-refundable when booked. The second $5k would be collected 10 days before check-in.
An important take away from the examples above, is that we can only offer guests the option to make multiple payments if you have a cancellation policy with sufficiently spaced refundable checkpoints.
Or set a custom payment schedule
Use this option if you prefer to set your own payment schedule independent of your cancellation policy.
One danger with this option is that it's possible to "break" your cancellation policy. Consider that the non-refundable fees of your cancellation policy can only be enforced if you have collected the money ahead of time. You will not be able to collect additional funds from a guest if they cancel. Put another way, your payment schedule should never be behind, or on a slower schedule, than your cancellation policy checkpoints.
Grace period
Hospitable notifies the guest ahead of each upcoming payment and attempts to automatically capture the funds. If we are unable to capture the funds, we notify you and the guest of the failed payment and share a link to switch to another payment method. We then reattempt to capture payment every 24 hours during your grace period.
If we are unable to capture the funds before the end of the grace period, the booking will be canceled according to your cancellation policy. You can set a grace period of 48 hours, 72 hours, or 1 week.
Disabling payment terms
If you prefer not to offer guests the option to pay in installments, you can use the Guests always pay 100% upfront option to disable payment terms.
Note that in the previous two options, Hospitable only offers guests the option to make multiple payments, they can still choose to pay in one upfront payment if they prefer.