%20--%3e%3cg%3e%3cg%20id='Logotype'%3e%3cg%3e%3cpath%20fill='%23141313'%20d='M46.37,250.9L136.63,28.98H0v237.25C0,296.87,21.93,318.83,52.56,318.83v-.03h160.64v-154.45l-156.9,95.23c-5.8,3.71-12.82-2.05-9.94-8.68Z'/%3e%3cpath%20fill='%23141313'%20d='M347.35,104.3c-68.33,0-115.93,44.71-115.93,108.91s47.6,108.9,115.93,108.9,115.93-44.72,115.93-108.9-47.6-108.91-115.93-108.91ZM347.35,255.04c-24.41,0-42.23-17.39-42.23-41.8s17.79-41.83,42.23-41.83,42.23,17.39,42.23,41.83-17.79,41.8-42.23,41.8Z'/%3e%3cpath%20fill='%23141313'%20d='M633.86,118.01c0,3.31-3.71,3.31-7.02,1.66-18.22-9.54-32.29-15.3-53-15.3-56.71,0-95.62,42.66-95.62,108.08s39.32,109.7,93.14,109.7v-.03c21.93,0,35.61-7.02,56.31-19.87,3.71-2.48,8.28-1.66,6.19,3.71l-5.36,12.85h86.51V28.98h-81.15v89.03ZM594.11,255.04c-24.41,0-42.23-17.39-42.23-41.8s17.79-41.83,42.23-41.83,42.23,17.39,42.23,41.83-17.79,41.8-42.23,41.8Z'/%3e%3cpath%20fill='%23141313'%20d='M1406.03,107.65l-23.58,112.61c-1.66,8.68-11.59,9.11-13.65-.4l-24.84-112.22h-94.79c-39.32,0-51.74-11.99-51.74-29.81s10.33-28.15,27.72-28.15c20.27,0,30.64,16.16,32.69,32.29h79.5C1325.35,29.38,1286.43,0,1230.52,0,1168.85,0,1130.32,36.04,1130.32,91.09v16.56h-44.71v67.07h44.71v144.08h81.15v-143.68h70.23l46.53,124.21c3.31,8.28,2.88,17.39-.4,26.1l-28.55,68.73h80.25l120.47-286.51h-93.97Z'/%3e%3cpath%20fill='%23141313'%20d='M886.41,117.98c0,3.31-3.71,3.31-7.02,1.66-19.87-9.94-34.35-15.3-54.65-15.3-60.45,0-93.97,49.29-93.97,107.65,0,64.59,37.26,98.54,87.77,98.54,23.19,0,40.57-7.02,62.1-19.47,5.37-3.31,9.51-.4,7.45,4.57-9.11,20.7-28.55,31.47-59.62,31.47h-83.2v67.07h98.5c72.04,0,123.78-47.63,123.78-114.67V107.65h-81.15v10.33ZM846.67,255.04c-24.41,0-42.23-17.39-42.23-41.8s17.79-41.83,42.23-41.83,42.23,17.39,42.23,41.83-17.79,41.8-42.23,41.8Z'/%3e%3cpath%20fill='%23141313'%20d='M1026.35,18.18c-26.1,0-44.71,16.16-44.71,39.35s18.61,39.35,44.71,39.35,44.72-16.16,44.72-39.35-18.62-39.35-44.72-39.35Z'/%3e%3crect%20fill='%23141313'%20x='985.78'%20y='107.65'%20width='81.15'%20height='211.15'/%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
What is an Advance Payment?
An advance payment is a portion of the total booking cost that a guest pays upfront to confirm their reservation. This payment secures the dates for the guest and provides a level of financial security for the host.
The amount can be a fixed sum or a percentage of the total stay, with the remaining balance typically due closer to the arrival date or upon check-in. It is a common practice in the vacation rental industry to mitigate the risk of last-minute cancellations and no-shows.
Join the Lodgify newsletter
How it works
When a guest makes a booking, the property manager or host requires them to pay a certain amount in advance as defined by the property's payment policy. This is typically processed through the booking channel's payment system or via a direct payment gateway on the host's website.
Once the payment is received, the reservation is officially confirmed and the dates are blocked on all calendars. The remaining balance is then scheduled for a later date, often automatically charged to the guest's card on file before their stay begins.
Why it matters
Advance payments are crucial for vacation rental managers as they reduce the financial impact of no-shows and late cancellations. By securing a financial commitment from the guest, hosts can be more confident in the booking and are less likely to lose revenue from holding dates that could have been booked by others.
This practice also improves cash flow, providing operators with funds to cover operational costs before the guest's arrival.
Examples
- A family books a beach house for a week in July, which costs $3,500. The host's policy is to collect a 50% advance payment, so the family pays $1,750 at the time of booking to secure their dates.
- A host lists their ski chalet on multiple OTAs and their direct booking site. To confirm a New Year's Eve booking, they require a non-refundable 25% advance payment, with the full balance due 30 days before check-in.
- During a low-demand shoulder season, a property manager offers a special rate that requires a 100% advance payment at the time of booking to lock in the discounted price, with no refunds for cancellation.
- A guest books a city apartment for a weekend totaling $500. The host's booking system automatically charges a $250 advance payment to the guest's credit card upon confirmation.
Frequently asked questions
Is an advance payment the same as a security deposit?+
What is a typical advance payment amount?+
How is the remaining balance paid after an advance payment?+
What happens to the advance payment if a guest cancels?+
Related terms
Payment Scheduling
Payment scheduling is the process of collecting guest payments in two or more installments at predefined times between the booking confirmation and the…
Split Payment
A split payment is an option that allows a total booking cost to be divided and paid by multiple people or in multiple installments. This feature increases…
Security Deposit
A refundable sum collected from a guest before check-in to cover potential damages, excessive cleaning, or rule violations during their stay.
Cancellation Policy
A set of rules defining the penalties a guest incurs for canceling a reservation and the conditions under which they may receive a refund.