What is the definition of Reservation Fee in the hotel industry?
The word reservation fee, refers to the fee charged by a hotel for reserving a room. It is very alike to a Security Deposit – meaning it is rewarded in order to lock the room of the buyer. Though it is only then refundable if the buyer call off the booking before the fees closing date. The fee once remunerated takes the property off the market momentarily, giving the possible buyer exceptionality upon the unit.
Reservation fees defend the hotel, as they allow it to have some kind of sanctuary that if the room does get cancelled they accept reimbursement for the cancelled booking