What happens if you cannot pay for a hotel?

Assuming a mature system of law and a country where the police is not commonly corrupt and debts not commonly collected by violent means:

Are they allowed to hold your passport until you come back and pay?

No, unless you agree to it as a means of quickly, cheaply and unbeaurocratically settling the issue.

What happens if they call the police?

The police will probably just write a report, including the identities of everyone involved, unless they suspect you of some crime, e.g. if you do not have a passport they may suspect you to be an illegal immigrant and detain you.

Are you going to be fined?

The hotel may add a surcharge for late payment.

Can the police or other authorities lend you money in this or other more critical situations?

The police definitely not. Your country's embassy or consulate may do this, but I wouldn't count on it.

Basically, you owe the hotel a debt. If you fail to pay it, there are civil law procedures to deal with that. The only way this could turn into a crime is if you deliberately tried to avoid paying the bill. Then it would be fraud.

This happened to us a few times. Credit card companies can be very fickle things, they allowed someone that wasn't us to pay for $500 worth of CDs across the world, but blocked a local hotel we were staying at from finalizing the charge for our room.

When we travel, we generally only bring one credit card to minimize the potential pain of losing our stuff, and to minimize impulse purchases. We bring enough cash to fit our budget for the trip, and generally don't bring bank cards as well. We try to travel cheap so our budget goes mostly for enjoying ourselves rather than the room we only spend a few hours a day in - but we try to stick with reputable, well known hotels. We don't always stay at a franchise, but we do make sure the place we're staying is some sort of an established landmark in the area that we'll be traveling.

This sort of thing happens a lot, and hotels are quite used to dealing with it. Generally, as long as you promise to pay and have provided working contact information for the hotel to reach you there won't be much of a problem. You just have to make sure you follow up with an alternate payment method once you reach home, or straighten out whatever mess was blocking it to begin with.

Now, if you run up a $1500 room service bill complete with cucumber facials and pedicures and suddenly find yourself without the means to pay for it, you'll probably meet a bit more skepticism from the hotel. Depending on the part of the world you're in, they may ask you to leave some kind of collateral that will be returned once the bill is settled, and they may involve the authorities if they feel that you were in fact trying to 'weasel out' of the bill - just like a restaurant owner might react if you could not pay for your dinner. There's no blanket answer to those situations other than be as reasonable and cooperative as you can to the extent that you feel is reasonable.

Never surrender your passport as collateral for anything, most passports have this printed right on them. That is a vital document that guarantees your safe passage through ports and it should never be given to a third party to hold. Most reputable hotels will be comfortable knowing that they can reach you after you've left and that you'll settle the bill once you have access to your resources. If they won't budge from their desire to have you leave something that would be at least inconvenient to replace if the bill wasn't settled, then use something other than your passport.

Another thing you can do is leave the credit cards you did not bring with a trusted friend or relative - and call them if you absolutely must have the numbers and expiration date for an emergency (I have a few of mine memorized, just from paying bills online).

The final scenario (this has happened to me) is the hotel suddenly not being able to process your payment due to a glitch on their end, and asking if you can settle the bill using cash instead. When this happened, I politely said that I expected to be able to settle my bill using my credit card and did not make alternate arrangements, the problem was their own but I'd be happy to send payment in another way once I returned home. The problem was magically resolved a few minutes later, so one wonders if they weren't just seeing if they could save on the credit card processing fee - something to watch out for at smaller 'mom and pop' resorts.

I had my wallet stolen once; I had meant to prepay the hotel and discovered it missing then. They agreed to let me pay later, and I was able to arrange a Western Union transfer of cash from a friend who I repayed using a paypal transfer. My advice would be, if you're concerned about that sort of thing, scout out Western Unions or similar transfer agencies near the hotel, as even stricter places are likely to let you leave your things there and rush off to get cash.

Alternately, get a prepaid debit card with the expected cost of the hotel stay -- not only does this still work if your card gets blocked, but it also protects against accidental overspending on your part and accidental double-charges on the hotel's part.

The starting point is: What can a hotel do if you are unable/unwilling to pay and you reside in the country of interest? Withholding a passport would not make much sense, most local guests might not even have one. Your nationality or country of residence, whichever they might be, do not entitle you to uniform treatment all over the world, it's the authorities of the country you happen to be in that you have to deal with first. The international aspect can complicates things down the line and might seem to be a big difference but, as often, the local laws are the most important thing. The fact that you are a foreigner with a passport will only enter the equation to the extent that these laws provide.

Since you mentioned France as an example in the comments, in this particular case what they can do is “not very much”. Basically the hotel can call the police, which might initiate a procedure if they suspect you arranged to be unable to pay intentionally. Technically, continuing to “consume” the service after realizing you will not be able to pay would count as intent, refusing to provide your name and address probably as well. There is a special criminal offense called “grivèlerie” for these situations but it's only a “délit” and I would be surprised if the police goes to the trouble of arresting you or getting a judge to force you to surrender your passport so at the end of the day they will mostly ascertain your identity and send you on your way. It's basically analogous to petty theft.

In any case, you still owe a debt to the hotel of course and how they can recover it will depend on the laws of the various countries involved. In France, there is actually little they can do, even “aggressive” non-coercive tactics used in other European countries like calling repeatedly are off-limits. The only way is to go through the civil court system and then get someone called an “huissier” to seize some of your property, which is probably too costly for a hotel bill (even companies that have to deal with these sort of things regularly like internet providers or utilities mostly disconnect people and then forget about their debt, so complicated is the system).

But if the country you reside in allows it, the hotel might also choose to contact a local debt collector. Here again, it's the laws of the country you are in that matter the most. So if you live in a country where debt collector are allowed, say, to just show up at your home and grab stuff, your nationality will not generally be of any help. In some countries, debt collectors will also look for you if your address is not current and charge you for the pleasure or make sure you get a bad credit rating. That's what I would be most worried about.

In light of all that, what they will and can do in most cases, is simply ask for an address to send the bill to.

I had this happen to me last month. Didn't realize it, as I walked out the hotel quite early expecting no issue whatsoever (CC had a limit at least 10 times higher, card was issued and used in NW Europe, nothing unusual about the hotel either, booked online in advance...).

But a week later I received a letter at home, stating that they failed to charge my CC. Weird, because it worked later. I haven't received the monthly bill yet, but if they indeed failed to charge my CC I'll just pay them by bank transfer as requested.