We have our own collections department, can you still help?

Yes we can. Our records show we can still collect up to 40% of overdue invoices even after the reminder process of your own organisation.

What are the most common reasons a hotel does not pay its invoices?

The excuses for delayed or non payment of invoices we experience most can be ranked in three groups:
  1. Unawareness. The hotel had no knowledge about pending invoices:
  2. the hotel says it never received any invoice or is unaware of any contractual relationship. This is most often due to a sloppy administration at the hotel. A change in hotel management or ownership is often a cause for this. When we open a collection case, we always make sure to check and verify hotel (email) address, and ensure receives all documents by sending them over email, fax, and postal service. We then request receipt confirmation over the phone.

  3. Inability to pay The hotel does not have the financial means to pay.
  4. This is the most common reason for a hotel not to pay its invoices. In these cases we always try to offer debt restructuring and allow for a convenient repayment schedule.

  5. Unwilling to pay. Due to certain reasons the hotel does not want to pay the overdue invoices
  6. The reason a hotel does not want to pay it bills can be many. Most often they tell us they don't agree with certain booking details on the invoice. We will then always try to reconcile these differences. Although due to certain contractual restrictions on invoice amendments, this is not always possible. In these cases we attempt through mediation to solve these debt conflicts.

How does the Trial work?

During the trial period you can evaluate our collections service. You can assign us on a maximum of 25 cases. The commission rate is 5% for all these cases. After a month yuo are given the possibility to sign up with us, after which you can send us an unlimited number of claims. If you decide not to continue, there will be no further obligations after the Trial.

What kind of Case Management System you are using?

We are using the the MDCMS, which is a Salesforce© based in-house built case management system developed over the course of 2,5 years. During its development we have taken into account the latest industry standards. We aimed for optimal security, full transparency, and fast communication for our clients, our head office, and all our local partners.

What is referred to with Follow-Up Invoices?

When our clients send us a claim for collection of an overdue invoice(s), the hotel is often still activated on the bookings portal. The hotel can receive more reservations also after we have started our collections procedure. These invoices can be added to the initial claim during the p

Is there a maximum time period until when the collections procedures continues?

Our procedure by default consists of three months. We believe this is a fair period in which we should be able to solve a case. After this period you have the possibility to close a case. We do however never recommend case closure, because we have seen many cases being solved after more than three months. There are various reasons for this e.g. seasonal closures, temporary financial difficulties, management change etc. When a case is kept open in our system a hotel will continue receiving notifications from us.

Do you ever start legal procedures against a hotel?

Yes we do, but only on very rare occasions. Seen the relatively small amounts the claims against the hotels (average claim amount EUR 470), it is very often not worth the risk. Especially in far-away countries and adjacent regions of the world, the legal system does not allow for effective recovery of debts for foreign creditors. We have however collected claims in Europe with EU Payment/Court Orders which allow for fast procedures and execution of a favourable judgement. We always initiate pre-legal procedures first.

How often do you send case updates?

You are receiving access to (the MDCMS, Salesforce© based) where you can view the status, and all activities on each claim assigned to us. In addition, you are receiving automatic updates in case a payment has been made or an essential update has been made to the case status. Every end of the month we are sending a full status overview in PDF + Excel format. We also have the possibility to provide API access to let our system collaborate with our clients' own CMS.

Are their any limits with respect to claim assignments?

You can send us as much claims with overdue invoices not older than 3 years. It does not matter whether you send a few each day, or all together once per month. All claims are being processed immediately and we guarantee a first dunning letter to debtor within 24 hours after case assignment. The reason we do not accept any claims older than 3 years, is that it is our experience that the chances on collecting these are very slim and near to zero. The hotel has probably gone out of business, changed ownership, or will simply deny the debt as outdated or missing records of the bookings.

How to start using your services?

Just send us an email, or give us a ring. We would be happy to start showcasing our potential by offering you a trial with our company. During the trial phase you can send us a maximum of 25 cases (or less), or if you like we can show us our entire procedure on the basis of just one single test case. In both cases you will receive access to the MDCMS for evaluation. Then only If all is to your satisfaction we will draft the cooperation agreement after which you can send us as much claims as you like.

No-Shows / Invoice Corrections / Amendments, how do you deal with them?

It happens not rarely that a hotel is stalling payment of an invoice because part of the bookings never materialised as guests never showed up (No-Show). Although the hotel is often contractually obliged to inform the travel agent on this within a certain timeframe, this often does not happen. We will always take the approach to persuade the hotel to first pay what is due according to their own records. In the meantime we will inquire with our client whether invoice amendments will still be allowed. Most of our clients decide on this on a case-to-case basis. If it happens for the very first time, exceptions are made. If it has become structural behaviour of the hotel or the requested corrections are too big, amendments are not accepted and we are requested to continue chasing the full balance. The hotel is then permanently deactivated from the bookings portal.

How much commission do we pay?

Our commission rates are always between 10% and 15% and varies according to the country where the debtor resides, and on the age of the debt. We work no-cure-no-pay, and commission is only paid over confirmed payments.

Can we add new invoices to existing cases?

Yes you can. In our Online Case System (the MDCMS, Salesforce© based), you can update the claim amount, add invoices, or make corrections to invoices. Debtors are then being notified automatically about the updated balances.

How can we check the status of a case?

All your claims assigned to us are being managed in our Online Case System (Salesforce© based), the MDCMS. You can check for case status, latest activities, and view e.g. PDF copies of all the letters sent to debtor. In case of any updates, you will be notified automatically anyways.

How are your dunning letters being issued to the hotels?

All our four letters are sent in the language of the debtor hotel (35 languages available). In bilingual countries, they are even sent in two different languages (e.g. Belgium: Dutch + French). To maximise chances on receipt, and to take out any excuse from the hotel, they are being sent by email, by facsimile, and by postal service all around the world.

Why is Modern Debt a specialist in hotel collections?

For several years we are collecting commission invoices for several large online bookings companies. All our procedures are tailored on recovering debts from hotels. We are very well aware of all the regular excuses, and have experience how to anticipate the standard stalling tactics. We know the several thousand delinquent hotels, and they happen to know us by now. We keep a database of phone numbers and email addresses of those persons at the hotel responsible for payments.

If the hotel pays directly to Modern Debt, when will you remit the money?

We send out remittances once per month. Every first week of the new month, all recovered funds from the previous month are included in one remittance. The commission invoice for all recoveries is then sent out simultaneously

Will you verify contact details of a hotel?

Yes. When we administer a case in our case portal we verify all contact details from debtor. Over the years we have built a large database with contact information of those people / departments in the hotels which are responsible for payments. We use this database to cross check contact details.

How can we submit our claims?

However it suits your organisation. We are very flexible. We do minimally need a copy of the overdue invoice(s). Batch files can be sent in e.g. excel sheets. Additional information as debtor contact details or contractual information are welcome, but will always be verified upon case initiation.

How many letters does Modern Debt sent to the hotels?

We are sending in total up to 4 dunning letters to the hotels. These letters are currently available in 35 languages. They are being sent by email, fax, and postal service all around the world.

How does Modern Debt collect the outstanding balances from the hotels?

All our actions are Out-of-Court with no involvement of any lawyers aimed at resolving a debt conflict on an amicable basis. We are making use of smart dunning letters, let our experienced agents make regular collection calls, and employ all the available incentives (deactivation from booking portals, blacklisting etc.) to raise pressure on the hotels.

What does your pre-legal collections procedure look like?

Over the years we have built sophisticated pre-legal debt collection procedures. These have been optimised according to the specific requirements of the online bookings sector. The entire procedure consists of four stages.
  1. Notification Stage (1/4): Sending Debt Notification + Invoice Copies.
  2. Contact Stage (2/4): Collections Calls + Demand Letter + Interest Charge
  3. Warning Stage (3/4): Final Letters (3/4 + 4/4) + Late Payment Fees
  4. Escalation Stage (4/4): International Assignment to MDI Local Partner.

What is debt collection?

Debt collection is a service in which a collections agency uses its professional experience to collect a debt pre-legally