UNIT 1 – CHECK OUT PROCEDURE

Check out and settlement are part of the final stages of the guest cycle.

It is the final phase of the guest cycle and examines the various activities involved in
checkout and settlement.

Check out involves the front desk as also other departments such as housekeeping, bell
desk, cashier’s desk, Point of sales etc. Main areas for a checkout are the belldesk and
the cashier.

The FO performs at least 3 important functions during the checkout and settlement
process.
 It resolves outstanding guest account balances.
 It updates room status information
 It creates guest history records.

Guest account settlement depends on effective FO accounting system that maintains

accurate guest folios, verifies and authorizes a method of settlement and
resolves discrepancies in account balances. Hotels find it most effective to settle a
guest account while the guest is still in the hotel. Guest can settle the bill by paying
cash, charging the balance to a credit card, deferring payment to an approved direct
billing entity or using a combination of payment methods.
Most hotels require a guest to specify during registration an eventual method of
settlement. FO should verify or confirm guest credit card or direct billing
information before he/she arrives at the desk for check out.
Pre settlement verification activities ensure that the hotel will be paid for
accommodation and services.

DEPARTURE ACTIVITIES AT VARIOUS DESKS:

1) At the Bell Desk:

During checkout a luggage outpass has to be obtained from the cashier stating that
the guest has settled his account and returned the room key. Once this is received a
departure errand card is made and filled out by the bell boy and will got to the guest
room to bring down the luggage.
The bell captain will also make an entry regarding this in the bell captain’s
control sheet.

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On reaching the guest room the bell boy will announce himself, knock on the door enter
the room on gaining permission. The bellboy will also ensure the following:
1. Collect room keys from the guest
2. Check the room for any possible damage to the property.
3. Draws the curtains, locks the balcony.
4. Checks bathroom and fittings.
5. The guest is escorted by him to the front desk
6. He puts a “room to be cleaned tag” card on the door after switching of
the lights and air conditioner.
The departure room is then inspected by a housekeeping supervisor/ Room attendant
to ensure that nothing is left behind by the guest. The housekeeping/ In room
dining department will also check the minibar for anything consumed by the guest to
be charged to the bill.

At the lobby the bell boy will:

Keep the guest’s luggage at the bell desk
Put hotel stickers and mark the luggage with “D” indicating departure luggage.
Collect the luggage out clearance slip from the reception and loads the luggage in
the car/taxi.
Return the errand card to the bell captain which will then be entered onto
the bell captain’s control sheet.

2) At the Reception desk:

The Front desk receptionist checks the list of expected checkouts for the day and will
confirm with the guest his date and time of checkout.
Departure notification slips are printed to inform the other departments of the guest’s
checkout.
In a manual system the room racks are updated. The departure register is also updated.
Checking for the mail messages and faxes. Checking for safe deposit box or in room safe
keys.

3) At the cashier’s desk:

1. Verifying account information.

2. Posting any remaining charges to the guest’s folio.
3. Presenting the guest folio.
4. Verifying the method of payment.
5. Processing the account payment.
6. Securing the room key.
7. Updating the room status.

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The procedures used will vary among Front Offices depending upon hotels level of
service and degree of automation. Some Front Offices offer automated or express check
out.

Traditionally at check out guest is presented a final copy of his/her account folio for
review and settlement. FOA should confirm how the guest intends to settle the account.
Guest may establish credit by presenting a credit card but may choose to settle his bill by
cash or travelers cheques. VIP or special guests or corporate accounts should not be
asked for settlement if their account is marked that all charges are to be Direct Billed.
FOA should bring the guest account balance to zero, called zeroing out. When
guest pays by cash or credit card, hotels assume that the payment is full and close the
folio. If the account is to be paid through Direct Billing by the hotel, however the
account is not brought to a zero balance because it must be transferred to the city
ledger and billed through the account receivable system.

METHODS OF SETTLEMENT

A guest account can be brought to a zero balance in several ways. Methods of

settlement include cash payment, credit card or Direct Billing transfer or combined
settlement method.

1) CASH PAYMENT IN FULL

Cash payment in full at check out will bring a guest account balance to zero. A cash
receipt has to be issued to the guest by the cashier. The cashier should mark the folio
paid. If the guest has produced a credit card at check in, the cashier should destroy the
guest credit card voucher imprinted at registration when the guest pays the account in
full with cash.
Guests paying in foreign currency should convert their money to local currency (some
international currencies like $ are accepted). Hotels often charge a fee to convert
currencies as banks charge the fee from the hotels. Currency conversion rates are
displayed at the Cashiers counter or it can also be taken from business sections of
newspapers.
Guests can also use traveler’s cheques to settle their bills. Traveler’s cheques are issued
by banks and avoid the risk of carrying cash. At the time of settlement the cashier should
confirm the identity of the guest from the safety and security point of view. Also there
is no danger of them being stolen as they can be encashed only when the signature of
the holder tallies with the signature signed at the time of issue. A foreign traveler’s
cheque

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should be treated as foreign currency and the necessary records, statements and
certificates must be maintained like in the case of foreign currency and should be sent
to the Reserve Bank of India.

Difference between an ordinary cheque and a traveler’s cheque

Ordinary cheque Travelers cheque

1. For issuing a person should have 1. No need of any bank account for
a bank account (either current or purchasing and encashing of
saving). traveler’s cheque.
2. Any amount can be filled in the 2. Have a fixed amount printed on its
cheque as they are blank. face and available in different
denominations.
3. Only one signature is needed of 3. Two signatures are required (one in
the holder. the presence of the issuing authority
and second in the presence of
encashing authority).

4. Ordinary cheques are valid only 4. Valid for indefinite period of time
for 3-6 months. unless dated.
5. These cheques can be 5. No such provision.
crossed for account payee.
6. No slip/list of lost, damaged or 6. Many banks issue a stop list for
stolen cheques is issued by the stolen and damaged cheques.
bank.
7. Cheque may bounce as the 7. No such possibility as the amount is
balance in the account may be already printed on the face of the
less than the cheque cheque.
8. Not safe as someone might force 8. Quite safe because the second
the owner to sign the cheque. signature have to be put in front of the
encashing authority.

Procedure for accepting foreign currency:

 Request guest passport and determine the credentials such as name and photo
identification place of issue and date of expiry of the passport.
 Confirm that the guest is a resident of the hotel by asking his room no. If the
guest is a non-resident the permission of the lobby manager is obtained who
will extend this facility to VIP’s and regular guests.
 Receive the cash or traveler’s cheque in foreign currency.

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  Calculate the total amount of ocal currency to be paid by multiplying the
foreign currency by the exchange rate displayed.
 Fill in details of the foreign currency encashment certificate.
 Request the guest to sign the foreign currency encashment certificate and compare
the signature with the passport.
 Request the guest to sign the traveler’s cheque if it is an instrument of exchange.
 Give the total amount of local currency with the encashment certificat
to the guest
 Second copy of the certificate is attached to the notes or traveler’s cheques
received
 Third copy remains in the encashment certificate book.
 Fill in details in the record of foreign currency transactions.
 Fill in details of the foreign currency transaction in the cashier’s report.

2) CREDIT CARD TRANSFER

Even though credit card transfer settlement brings a guest account to zero, the amount of
the charge must be tracked until payment is actually received from the credit card Co.

Credit card settlement creates a transfer of credit on the guest folio and moves an
account balance from the guest ledger to a credit card account in the city ledger (non-
guest ledger).

Procedure

 Guest signature completes this transaction.

 In some hotels computer system sends the settlement transactions directly to the
credit card Co. guest only signs on the voucher present at FO.
 There is no need to sign on imprinted voucher.
 When foreign guests pay by credit card, credit card Co. payment is in local
currency.

3) DIRECT BILLING TRANSFER

Like credit card settlement, direct billing transfers a guest account balance from the
guest ledger to the city ledger. Unlike credit card settlement responsibility for
billing and collecting a direct billing lies with the hotel rather than an outside
agency. Billing should be arranged and approved by hotel’s credit department. Guest
signs the folio and accepts the responsibility to pay the bill should direct billing account
not pay the bill.

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4) COMBINED SETTLEMENT METHOD

A guest may elect to use more than one settlement method to bring the folio balance to
zero.
E.g., guest may make partial cash payment and charge the reminder of the account
balance to an acceptable credit card. FOA must accurately record the combined
settlement methods and take care that all required paper work is properly completed.
Once the guest has settled the account the FOA should provide the guest with a copy
of the folio.
Good evaluation and follow up should be there as it is the last chance to make an
impression.

LATE CHECK OUTS

Guests do not always check out by the hotels posted check out time. To minimise
late check outs, the front office should post check out time notices in conspicuous places
such as back of the guest room door, FO, in departure material etc. some hotels charge
late check out fee. Explain to the guest why the fee is charged (management policy,
HK can prepare room for other guests arriving that day).

CHECK OUT OPTIONS

Advance in technology with special guest service to expedite departure activities.

1. On desk Check-out

 This is the oldest and most common option of guest check out. Under this option, a
guest who wishes to check out is required to come at the cashier’s desk to settle his
bills.

 A guest who wants to check out from the hotel has to inform the front desk about
his departure before hand, so that the guest reaches at the cashier desk for settling
his bills, the cashier is ready for the guest check out without any delay.

2. Express check out

 It is a facility given to the guests who wishes to speed up theiur check out process.
 This is practiced by the hotels to ease the volume of work at the front desk during
peak hours especially in the morning when frequency of guest departure is more.

 In this system the hotel prints and distributes guest folio to the expected departures
beforehand. Along with the pre-departure folio, the hotel distributes express check
out form with a note requesting the guest to notify any changes in the departure
plans.

 Facility of express check out is given to the guests who uses credit card as their
method of settlement. Here, the guest authorizes the hotel to charge his/her
outstanding balance on credit card through the express check out form.

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  The guest deposits the form at the front desk and checks out. The front desk
completes the procedure afterwards.

 Here, there is possibility of late charges, which must be added to the guest folio
and a copy of the updated folio must be send to the guest with the supporting
vouchers.

Format of Express Check-out Authoriozation Form

ABC Hotel
Express Check-out Authorization

In order to help in speedy and queue free Room No. ………………………………..

check-out, may we offer you our Express
Check-out facility. Name of the guest ………………………..

All you have to do is: Departure date ……………………………

1. Check the copy of your hotel bill as Deaprture time …………………………...

on today at 7:00 AM
This is your authorization to charge my
2. Fill this form completely. account to the credit card account
imprinted at the time of registration
3. Leave this form along with your
room key either in Express Check- Guest signature………
out box at the lobby or hand over it
to bell boy while departing. In case if you wish to receive your hotel
bills at a different location, please write
4. Please do not enclose any cash. your mailing address.

5. Final copy of your bill will be Name …………………………………….

mailed to you in next 24 hrs.
Address……………………………………

3. Self check out

 It is also an option of guest check-out in which there is a provision for a guest to

check-out from hotel by accessing either a terminal located in the lobby or an in-
room system.

 Such systems are interfaced with front office computer and are intended to reduce
check-out time.

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Steps for terminal checkout:

i. Guest accesses the correct folio and reviews it.

ii. Guest either enters a credit card number or swipes the card on a credit card reader
attached.
iii. The balance is transferred to a credit card account (in city ledger)
iv. Bill and account statement is printed and dispensed.
v. System automatically updates room status.
vi. System updates the guest history.

4. Digital check out

As the guest's payment information and other details are already verified through their
hotel membership account prior to arrival.

Guests can bypass the front desk upon departure as their bill will be automatically sent to
their email address.