Visa U.S.A. has begun a national education program to combat the rising cost of no-shows at hotels.
People who fail to honor their room reservations and who do not give advance notice are said to cost the hospitality industry as much as $100 million a year. Hotels' no-show policies vary, and Visa officials said hotel employees need better training to explain the rules to people.
"An empty room doesn't make any money for hotels," said Thomas C. Edwards, senior vice president of market development and acceptance, Visa U.S.A.
Visa's program, "Managing No-Shows: Issues and Answers," offers free advice to hoteliers, including video tips on reducing the problem and sample letters to consumers explaining billing policy for cancellations. Visa officials said their main point is that to avoid confusion and disputes hotel workers must communicate clearly at the time a person calls for a reservation. Underlining the no-show policy also sends the message that a reservation imposes an obligation.
The hotel industry is booming. A few years ago, at a less robust part of the business cycle, it was less of a problem if an expected guest failed to show up and a room sat empty, Mr. Edwards said.
Merchants "wanted to understand how to better make themselves more profitable, and we wanted to work with them to provide Visa cardholders better service," he said.
Lost revenue is only part of the problem. Banks and credit card companies also suffer because their customer service representatives are often the first to hear complaints about cancellation charges on card statements.
Best Western International Inc., Choice Hotels International, and Holiday Hospitality Corp. have endorsed the Visa program and used it at all their properties.
"Three very competitive hotel brands who all compete for the same consumer but think this program is so compelling have united," Mr. Edwards said.
"No-shows eventually become chargeback issues and cost the hotelier a lot of anguish, frustration, and energy," said Sally Kaplan, Choice Hotels' manager of marketing programs and partnerships.
People are rightly confused, Ms. Kaplan said, because hotels have not been consistent in charging for no-shows.
"Consumers have to understand that regardless of the circumstances he or she will be billed for a no-show," Ms. Kaplan said.
Because hotels have gotten more consistent in explaining their policies, "we have eliminated a lot of that frustration and unhappiness on both sides," she added.
Visa said the three chains endorsing its program did a six-month pilot test that produced a marked increase in communication between hotel employees and consumers. Before the test, staff members warned about the no-show charge 4% of the time. Afterward, they did so in 81% of the instances.
After training, cancellation deadlines were given 99% of the time, up from 64%. Other information about cancellations was mentioned in 84% of communications, up from 9%.
Mr. Edwards said Visa hopes the education program will spread across the industry and other card companies will begin to help their merchants "reap the benefits of better profitability."
Two years ago American Express Co. enhanced its 20-year-old "assured reservation" policy, adding, among other things, clearer rules about charges for not showing up.
The company replaced its own policy-a 6 p.m. cancellation time at city hotels, 4 p.m. at resorts-with one that honored the individual policies set by hotels. This was meant to reduce misunderstandings between cardholders and merchants.
"We felt the merchant knew his business best and he should be the one to determine how best to manage his inventory," said Emily Smith, vice president in the retail marketing group at American Express.
Amex also introduced an education program for merchants and cardholders, which included literature on the procedures governing reservations.
The company has not quantified the program's financial impact, Ms. Smith said, but merchants have said they appreciate the program and feel American Express supports their goals.
Stanley W. Anderson, president of the consulting firm Anderson & Associates, Arvada, Colo., said teaching cardholders how to handle transactions is a vital role for card companies to play.
He said Visa's involvement can have a subtle effect on consumers' choices. For example, when a person approaches the counter at a hotel, he or she might be inclined to use the Visa brand because of the association with the educational materials.
Though "it may not be as successful as an advertisement on 'Seinfeld,' it clearly has residual benefits to the card association," Mr. Anderson said.