The document discusses the complex checkout, departure and settlement process from the perspectives of various stakeholders, including the guest, hotel staff, owners, and payment processors. It outlines the key steps in the checkout process, potential problems that can arise like late checkouts or disputed bills, and the importance of documentation to resolve issues. The goal is to provide students an overview of the many considerations involved beyond the basic tasks, as the manager must balance needs of all parties for a smooth checkout.

1. Departure, checkout and settlement
process concept notes
Any topic can only be understood by first understanding the larger
context that it is found in. In other words, one needs to be able to
view the larger picture of a smaller bit or piece of knowledge. For
example, studying science to have greater control over the forces
of nature! Study of math to exactly measure things that we are
interested in!
Checkout happens to be the fourth stage of the guest cycle in a
hotel. Let us first quickly recapitulate the concept of the guest
cycle.
The guest cycle summarizes the entire working of the front office
department into four broad stages; namely, pre arrival or
reservation; arrival or check-in process; stay; and
finally; departure or the checkout process.
Such simplification makes learning and remembering easier for
students. However, there is always a risk of oversimplification
and students being misled into believing that the front office only
does 4 tasks! There is a saying that the devil lies in detail!
Concepts of all subjects are not very hard to understand. But,
every subject grows into a vast package of facts, information,
ideas etc. with time that cannot be mastered quickly and easily.
A modern hotel is a giant of an operation, and the front office
department is equivalent to a large orchestra in concert, playing a
finely detailed sheet of classical music written by the most
accomplished artist. Every job has precise responsibilities, and
every work procedure closely synced to other related work in a
logical, progressive, stepwise, cyclic, sequence. It is what we
commonly call as interdependence of interacting parts within a
system.
The first thing the learner needs to grasp is to realize that check
out, departure and settlement have their own particular meanings

2. and understanding them is equal to winning the first half of the
battle.
 Check out means leaving the room.
 Departure means leaving the hotel.
 Settlement implies payment for the dues owed by the guest
to the hotel. Sometimes, the hotel may also have to refund
the difference between the advance paid by the guest and
her actual bill amount.
The next step for the learner would be to ask this question to
herself.
“What is in it for me? What am I going to gain by learning all this?”
If you are a student of the hotel and hospitality higher education
course, then you are most likely to be starting your career as a
management trainee, operations trainee, or corporate trainee.
So I would prefer to give more attention to the managerial
responsibilities, risks and challenges. But the learning would not
be complete unless we are also able to understand the
perspective of the following people and entities that are also
interested or involved in carrying out successful checkout SOP.
1. the guest, who is checking out
2. the credit card companies
3. travel agents, tour operators, Corporate, Airlines with
deferred (delayed) payment and commission arrangement
with the hotel
4. the frontline staff handling checkout, specially the front
office cashier, bellboy/ attendant
5. the points of sale departments dealing with charge(credit)
transactions that must reach Front office for settlement
before departure
6. the owner of the hotel
7. the Front Office manager
8. managers of other departments
9. the General Manager
10. hotel security department

3. 11. hotel parking and valet assistance services
12. government and law enforcement agencies
13. local community
14. staff Union
Now we shall have to list down the needs, expectations and fears
of each one of these stakeholders in the checkout, settlement and
departure process.
1. The guest has the following needs, expectations and fears;
 Won’t I miss the flight because of delay during
checkout or airport transfer?
 Will I get the correct bill? Will I have to argue for
corrections?
 Will my luggage be transported safely, on time?
 Did I forget to pack something?
 Will there be a long queue at hotel checkout, or for the
flight check in?
2. The credit card companies;
 Was the documentation of the credit card payment
done properly and securely?
 Are all the physical vouchers supporting each
transaction included with the bill?
 Will there be a chargeback claim by the guest?
3. The agencies and companies;
 Did the genuine (bona-fide) person avail of the credit
facilities?
 Was the documentation done properly?
 Is there any overbilling or dubious transactions?
4. The Frontline staff- front office cashier;
 Will I be able to handle the morning rush between 7:00
to 10:00 a.m.?
 Will the guest dispute any charges? Will someone
scold or insult me?

4.  Are all supporting vouchers carrying the guest
signature?
 Are there any late charges?
 Is there any late checkout fee to be charged?
 Will I remember to ask about room keys and safety
lockers?
 Will the guest use the mode of payment given during
check in or something new?
 If something new, do we have arrangements ready for
it?
 What are the foreign currency exchange rates of the
day?
 Did the bellboy check the room and report any theft or
damages in time?
 How many luggages out passes do I have to prepare
for the guest?
 What if there is a long queue formed and some guests
start shouting? Do I have a backup?
5. The perspective of the bell attendant;
 Did I miss something in the room and forget to report to
the cashier?
 Did I tag the luggage properly?
 Will there be too many checkouts today?
 Would I be able to load this entire luggage in time?
 Did I collect the room keys from the guest?
 Did I ask them to clear the in-room safe?
 Will there be a dispute regarding luggage count?
6. The owners’ anxieties;
 Is the hotel doing well financially?
 Is our goodwill in the market still intact or do we have
negative reviews circulating in the social media?
 Is the staff honest?
 Are managers sincere and responsible?
 How are we doing compared to our competition?
 Are we doing better than last year or worse?

5.  Is the taxation part taken care of?
 Are we going to get sued by
somebody; customers, employees, demoralized
managers, angry suppliers, local NGO, government
officials etc?
7. The challenges of the front office manager?
 Are we going to meet our revenue targets set in the
budget this day/week/month/year?
 Will there be any complaints or angry guests today?
 Would there be any negative feedback about the front
office department or its employees?
 Are my owners happy with my performance?
 Is the staff able to handle the work stress?
 Are they honest and responsible?
 Are they loyal?
8. Managers of other departments have their own fears about
the checkout process because this is when the guest feedback is
collected and no one wants to get a call from the GM’s secretary?
9. Hotel security department would like to ensure that CCTV
cameras are functioning all around and movement of everyone in
the public domain is being observed and recorded. A large crowd
gathered in the open lobby space is an invitation to thieves,
criminals and terrorists.
10. Hotel Parking service and space is also a potential crime
zone. As it is often in a secluded space, the risk gets heightened.
The customers who willingly depart from the hotel without paying
their bills, so called skippers, may be stopped in the parking
space by asking for luggage out pass.
11. The government, apart from taxation revenue and antitrust
practices, is concerned about the undesirable elements using
hotel facilities to carry out unwanted activities. During the
checkout process, the government would like the hotel to ensure
that the column, ‘going to (destination)’ entry, made by the guest
during registration, matches with the current travel plans. They

6. may also need the record of people and their movement in the
public areas of hotels for future investigation.
12. The local community, directly or indirectly, gets affected by
criminal activities, pollution and disturbances arising out of too
many people moving around in a limited geographical space.
They may also be concerned about immoral activities and
activities against their religious sentiments.
13. The staff Union everywhere would have a political
connection for support. They may resent and protest excessive
workloads, unfair working conditions, favouritism by managers in
allocation of duties, and distribution of tips among front of the
house and back of the house departments. Tips are often given
during checkout and cause tremendous heartburn in case of
arbitrary differentials!
The purpose of sharing such details with the students is to assist
them and become aware of the complexities that a manager may
have to deal with, during a seemingly simple activity like check
out.
The expectation of everyone can be summarized into five
objectives or goals for effective checkout and settlement;
A. Prepare for checkout one day before the date of departure
and 1 hour before the time of checkout.
B. Have a fail proof accounting and audit system.
C.Be attentive to guest and staff needs at all times.
D.Establish latest security system.
E. Hire professional public relations manager.
Checkout process at Front desk consists of the following main
tasks;
1. Ask the guest if they had any recent charges at any point of
sale.
2. Post any outstanding charges to the guest account.

7. 3. Ask the guest to verify the information and details of the
transaction recorded in her folio.
4. Ask the guest about their stay experience in the hotel.
5. Respectfully present the guest folio.
6. Verify if the method of payment remains the same as
indicated during registration.
7. Process the payment in an accurate and fast manner.
8. Check if the guest has any mail, messages, fax etc with the
front desk.
9. Ask the guest to return the keys of the safety locker and in-
room safe.
10. Obtain the guest room key.
11. Update the room status, from occupied to on-change.
The settlement of the guest bill can be broadly classified into;
A. immediate payment ( cash, foreign currency, Traveler’s
cheque)
B. deferred payment ( credit card, charge card, travel agents
voucher, bill to company letter, MAO & PSO)
Now let us look at some common problems faced during the
checkout process and how to minimize them.
Late check out;
When guests do not vacate the room, even after being reminded
of the indicated and standard check out time, it causes a problem
for the guests arriving later that day. It can be minimized by the
following techniques;
a. Call the guest room in the evening, before the day of
departure, to reconfirm the departure date and time.
b. Slip in the printout of the guest bill from under the door
before 6:00 a.m. on the date of departure.
c. Place notices at the back of the guest room doors to remind
the guest about the standard hotel check in-check out time.

8. d. The problem of late checkout can also be controlled by
having facilities like Express checkout and Self checkout
terminals.
e. If nothing works, the last option is to charge a “late checkout
fee”. Employees should not feel apologetic for doing so. It is a
profit making business after all, and we did all we could possibly
do, to get the guest to vacate the room on time!
The other major problem during check out period is unpaid
account balances and late charges.
Skippers can only be controlled by having strict control over credit
facilities and constant monitoring of guest accounts.
Late charges are the charges from those points of sale areas
which may not be directly connected to the hotel’s computerized
accounting system. The solution is to send departure notification
slips much in advance to employees at POS, handling
transactions in the outlets, and making sure that they sign the
notification as a proof of having been informed about the
impending room departure.
The only difficulty with late charges is that even though the
guest is legally responsible for paying all their charges now or
later; (because their signature on the guest registration card
accepting hotel terms and conditions, is a legal document which
they cannot deny to be responsible for), the collection of the late
charges requires the hotel to contact the guest through various
means, and all of which cost money.
It would be useless if the late charge amount is less than the
amount spent by the hotel in communicating and collection.
Deferred payment accounts may cause another problem in
collection and hotels may have to appoint full time credit
managers in order to prevent losses from bad debts. The hotel is
in the most comfortable situation to collect the payments when the
guest is still inside the hotel.

9. The concept of account aging is to categorize all the unsettled
accounts into age groups, ranging from 30 days to 180 days old.
Older an account gets, more difficult it becomes to collect!
Finally I would like to discuss the challenge of disputed bills. It is
indeed very embarrassing to have a guest pointing to some
charges being wrongly posted in her account; in front of many
other guests waiting in line, for checkout.
If the dispute continues, it completely ruins all the effort of all the
other departments who were busy wholeheartedly serving the
guest during her stay. It is therefore really needed to have a fair
and transparent accounting system supported by honest and
rigorous practices at each stage of transaction and proper
documentation. Creating a neat and legible voucher, while also
obtaining the signature of the authorized person and the
employee responsible for generating and processing that
voucher, it is only this physical evidence in the form of vouchers
which can prevent disputes from occurring.
This is a concept document and is by no means an
exhaustive list of facts and information on the topic of hotel guest
checkout and settlement process. It is expected by the author of
this document that the reader will begin further exploration from
this point onward.
August 17, 2020
Presentation by- Praveen Jha
Senior Lecturer
Institute of Hotel Management, Hajipur, Bihar
.