How are you going to get money off your guests for your vacation property?
Up to now we’ve looked mainly at how you could go about marketing your holiday property, but equally important is getting paid for all your hard work, so how do you do that?
In days gone by you’d have relied on drive-bys and just taken cash. Some people still do that but it’s a decreasing band and these days most people accept a range of payment methods which I’ll go through briefly here to give you an idea of what’s involved.
Cash is easy to accept of course but you need to be clear what cash you accept. Is it only the local currency or will you accept, for example, pounds, dollars and euro? If you are planning on accepting foreign currency, check what it will cost you to change it to your local currency before you start accepting it as it’s often extremely expensive: around 10% for reasonably large amounts and for, say, £50 you could find it costing you £10 ie 20% to change it.
Travellers cheques are just as easy to accept although if you’re accepting cheques in foreign currencies you’ll be hit with charges similar to that for accepting foreign cash. You don’t need to sign up in advance to accept these. Stick to brands that you recognise (American Express, Citibank, Thomas Cook and Visa are the major ones) and write the passport number of the person giving them to you on the cheque. You can usually deposit these as cash in your account but some banks charge (usually around 1%).
Personal cheques are best avoided as the number of bounced cheques is on the rise. In the UK you can accept these when backed by a guarantee card but remember that the amount is only guaranteed up to the amount stated on the card and, no, this does not mean that you can get people to write several guaranteed cheques if the amount is above their limit.
Credit cards, debit cards and charge cards are something that you simply have to accept these days. Costs vary considerably but as a small business you should expect to pay between 1% and 4% of the amount to your bank. If you don’t want to go to the bother and expense of signing up for a machine with your bank you can still accept credit/debit card payments by signing up with PayPal which lets you accept online payments for around 4% with no monthly charges (you can also upgrade to a “virtual terminal” and accept payments directly from people for around £20/month). Banks will require you to have a business bank account before you can accept cards through their machine. Be wary of saying you accept “all major cards” because 1) that’s quite expensive and 2) what people call a “major card” may not correspond with your thoughts: it’s much better to say “we accept American Express, Diners Club, Discover, JCB, Mastercard and Visa” (if you really accept all “major cards”).
Holiday vouchers come in untold numbers of different varieties but some are limited to particular types of establishment eg you couldn’t accept restaurant vouchers if you don’t have a restaurant. You usually need to sign up for each scheme in advance and will pay around 1% commission on the amount. These are very popular in some countries and, for example, in France the Cheque Vacance scheme includes you on a brochure distributed throughout France which is pretty good publicity for 1% commission. You may need a business bank account to be able to accept these.
You should think about which of the above you’re going to accept before you start marketing as it’s handy to be able to say “we accept payment by….” and some people will book you in preference to somewhere else that doesn’t accept their preferred method of payment.
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Related posts:
- Should you accept credit cards even if you’ve only a small holiday apartment?
- How do you avoid being taken in by Internet scams?
- Getting money from repeat customers at your holiday property
- What do you need to include on your holiday property website?
- What do you do about dis-organised guests?