Failing to Pay:  What to do when a guest does not pay for lodging

It’s one of the most common calls to our legal department:  a guest or group hasn’t paid the folio, and the hotel needs to figure out what to do next.  The solution involves a blend of civil law and criminal law, and a call to THLA’s legal team can help a hotelier navigate the process.

First, a hotel almost always has the right to pursue legal action against a guest or group that does not pay for services provided by the hotel, including the use of a hotel room for transient accommodations.  This could mean sending demand notices at a minimum, and filing a lawsuit against the non-paying party at most.

For large groups or business contracts with thousands of dollars in play, filing a lawsuit may indeed be the best course of action.  However, more commonly, the non-paying guest only owes for a few nights’ worth of accommodations, and a lawsuit may not be economically wise.  This is where the interplay between civil and criminal law becomes an important tool of leverage that may compel that non-paying guest to make good on his obligation.

A number of years ago, THLA worked with the Texas Legislature to have nonpayment of transient lodging codified as a theft-crime, potentially punishable by court fines and/or jail time for the violator.  More specifically, we worked to have nonpayment of transient lodging classified as the crime of “theft of service,” and the county district attorney has the ability to bring criminal charges against the guest if the guest does not pay for the accommodations.

Ultimately, a decision as to whether to actually prosecute the non-paying guest remains in the hands of the county prosecuting attorney.  Regardless of this ultimate decision, a hotelier can notify the non-paying guest that the failure to pay for lodging constitutes the crime of theft of service.  

THLA works with hoteliers experiencing this unfortunate situation to create a customized demand letter that reference the criminal penalties, and demand that the guest make payment for the accommodations.

We have a great track record of success with these theft-of-service demand letters, and this assistance to hoteliers is a free service THLA offers to hotel members.  If you have a situation that needs our attention, please contact us:  news@texaslodging.com, or by phone at 512-474-2996.