Simon Calder's Holiday Helpdesk: Is it legal for hotels to withhold passports?

Q I wonder if you'd ever come across this before. We were staying in a hotel in Becici, Montenegro and gave our passports to reception upon arrival - par for the course. But when we needed them for a day trip to Albania they refused to hand them over unless we gave them €200. Apparently it's because some previous guests had trashed the rooms and then scarpered. So now they essentially hold the passports to ransom. I'm used to letting receptions have a credit card swipe for this reason but surely it's illegal to withhold passports?
Joanne Lee-Ward
A "Passports are the property of the Crown," warns HM Passport Office. But once you get abroad, not every enterprise gives the travel document the respect that Her Britannic Majesty might like. It is, as you say, routine for hotels to retain passports. In many parts of the world, traders regard the temporary possession of a passport as the one gold-plated guarantee that a tourist will behave. In the absence of such certainty, hoteliers and others may demand a credit card, a driving licence or hard cash. And I can't see that will change in the foreseeable future.
Additional research by Abbas Panjwani
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