What is the meaning / definition of Reservation Fee in the hospitality industry?

The term reservation fee, refers to the fee charged by a hotel for booking a room. It is very similar to a Security Deposit – meaning it is paid in order to secure the room of the buyer. Though it is only then refundable if the buyer cancels the booking before the fees deadline. The fee once paid takes the property off the market temporarily, giving the potential buyer exclusivity upon the unit.

Reservation fees protect the hotel, as they allow it to have some kind of security that if the room does get cancelled they receive compensation for the cancelled booking.

See also:

  • Reservation
  • Cancellation Fee