I would also expect customers to start to complain to corporate, franchise owners can lose their franchise, if they violate corporate rules like weird billing practices or just alienating customers.

What seems to happen here is that one transaction is pre-authorized, then another transaction is eventually charged and the initial pre-autorization is allowed to lapse. That is not how it is supposed to be done: the hotel should pre-authorize some amount, and then finalize that same transaction (or only a part of it if customer didn't use minibar and other optionals) to actually charge the customer. And NOT issue a separate charge. They might be doing this because they don't know how to do it properly, or their IT systems might be broken by design, and it would need software overhaul

If the hotel gets access to the card number, then it's definitely not against their terms with anyone. This answer is wrong. Unless you're just making a value judgement. A non finalized pre-auth doesn't end up on the statement.

@user142083 Instead of pushing your opinions on to every answer and in the comment section, you should write it where it belongs - in an answer.

Yep, that's the main point to get at I think. If you preauth a transaction, making the transaction should just "make good on" the preauth, not charge a separate time.

@pipe Maybe this answer just needs to be more clear. Is this wrong, as in illegal, fraud, against card processing terms? Or, is it "wrong" in Wesley's value judgement pov? This is what comments are for, pointing out errors or asking for clarification.

@user142083 It is "wrong" in the sense that it is using a pre-authorization transaction in a manner that is different from how that transaction type is expressly designed to be used. It might also be against card processing terms, but I'm not sure about that. Using pre-authorizations in the manner they are designed for would involve linking the actual charge to the pre-auth, so the card company would allow the pre-authed amount to be used to pay it, which would resolve the asker's issue perfectly by addressing both their concerns and their boss's concerns at the same time.

@Douglas That's where the third party reservation service comes in, I imagine. Somewhere along this train the manager has been skunked by non payers. Maybe there's a simple technical solution, maybe not. Being a bit on the manager's side of "third party reservation services", I'm inclined to believe they expect the hotel to deal with non payers on their own. As for the merchant terms, I'm not sure either, but I tend toward probably. Maybe that's on topic at money.stackexchange.com, but probably not.

@user142083 This has nothing to do with third party services. It is entirely within the technical mechanics of how pre-authorization transactions work. The hotel runs a pre-authorization in the morning. For each successful pre-auth, the hotel receives a transaction id. If the hotel then links the completion of the transaction to that provided pre-auth id, then they are guaranteed up front that the money is available and will be paid, because that money has been held specifically for the express purpose of guaranteeing that specific transaction's success.

@user142083 In non technical terms, it's like the hotel (H) and card company (C) are having a conversation as follows: H: "Hey C, I'll be charging this guy $100 later. Does he have that?" C: "Yes, and I'll make sure it's reserved just for this for now." H: "In completely unrelated news, I'm charging this guy $100 now." C: "His money is reserved for the first thing, sorry." H's last line needs to be changed to "Remember that $100 I asked about earlier? I'm charging that now."

@Douglas I understand how pre-auths work. But the OP seems to be saying that a third party handles the actual payment, and sends it to the hotel. There's apparently some lack of control here.

@user142083 OP explicitly states that third party handling of the payments is a lie told by their boss to angry customers.

@Douglas Obviously there being third parties involved is true, otherwise "make direct bookings next time" wouldn't make any sense to anyone.

@user142083 OP says that third parties are involved in booking, but not in this pre-auth issue. The hotel is doing the pre-auth, they can fix this themselves.

@Esther Yes. I've been trying to make this point. If the third party handles booking, then they likely handle the payment too. I can't imagine any reason why someone would make a separate pre-auth and completed transaction, unless they lacked control over one or both of them. In that context, "we do a pre-auth because of the way the third party works" is a reasonable explanation, though you can disagree with it.

@user142083 Yes, but "the third-party runs the pre-auth" is not, and that's what the boss is telling customers.

@JustinHilyard According to the OP, but he could be mistaken about what he's being trained/told to say. Customers are not interested in a long explanation about how the booking site works, and how sometimes people don't pay, etc. Explaining things to customers is like talking to children. The reasoning might not be technically accurate, but it is still valid and suits the customer's needs.

@user142083 If the third party handled payment in addition to booking, then I would expect the hotel to not even be capable of doing a separate pre-authorization because they would have no reason to be given the credit card information.

@Douglas Incidentals, room service, etc. I've never stayed at a hotel that didn't require a valid credit card for these items before you can check in.

@user142083 Which they ask for at the desk when you check in, not prior to your arrival when it would be possible to pre-auth the room charge.