Hotel option - pay now or pay later

Old May 21st, 2015, 08:29 AM
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Hotel option - pay now or pay later

I'm booking hotels for a trip to Amsterdam, Bruges and Brussels in late Aug/early Sept. For the first time, several booking sites are giving me the option of 1) paying them (the booking site, say Expedia or something similar) right then, in dollars, OR waiting until I get to the hotel and paying the hotel, in euros.

I don't know if this just means I'm betting on which way the exchange rate is going to go or something else. My husband says why not keep our money for 3 months longer, which makes sense. I am assuming that the price in dollars that the booking site has on my confirmation IS the price - that is, that the hotel will just bill me that price using whatever exchange rate my credit card is using.

How are other people dealing with this? I don't remember having this option when I was in Scotland last year or Spain the year before.

Thanks so much,
Alice
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Old May 21st, 2015, 08:52 AM
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Best read the fine print. Most sites say that the price in dollars is the conversion at the present exchange rate. The actual euro price is the same in three months. You always are paying in euros. So you are betting on the exchange rate.
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Old May 21st, 2015, 08:55 AM
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Use booking.com and pick hotels which allow you to make changes up to about 48 hours before you are due to stay there.
Some may take a small deposit but if you change within the time scale indicated then this money will be refunded.
If you want you can also download an app to your phone and book as you go along, using the WIFI of the hotel you are in if you do not have a internet coverage plan.
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Old May 21st, 2015, 08:58 AM
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look closely - the pay now option is often/usually nonrefundable, the equivalent of an airline advance purchase fare
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Old May 21st, 2015, 08:59 AM
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You are dealing with risks. Reason for choosing one method over another depends on what is at stake for each individual. What would be dysfunctional is to copy what others are doing without understanding why they do it and if the reasons are relevant to you.

The hotel booking comes in roughly 4 different ways:

1. Prepay - not refundable
2. Postpay - not refundable
3. Prepay - refundable (up to a point)
4. Postpay - refundable (up to a point)

The prices go up "roughly" in this order. What you are buying is the risk protection.

Which is relevant to you? You have to ask this question your self with each type. Doing this for the currency reason is most likely like a lottery - no one knows which way the exchange moves.

If the downside is acceptable with the given choice, you can go with the cheapest solution.

How certain is your trip? Are there health, aging parent care, etc, that can force you to cancel your trip at the last minutes?

How certain are your flights? If you have a connection, is there likely chance to you will have to forfeit the first night cost that could have been avoided if you have chosen a hotel that you can cancel up to 6pm without having to have paid anything?

Also, if you are traveling with minimum number of financial instruments, such as only one credit card, then having paid ahead at least ensures you don't have to come up with a lot of money to pay for the lodging if your card is cloned, lost or stolen. Sure, you are "protected" from fraud, but it does not help you pay for the immediate expenses even if your credit card company express mail a new card to you home address.

If you have to travel with a credit card that charges you a lot of foreign transaction fees, paying ahead just might give you savings even if the exchange moves a few points.
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Old May 21st, 2015, 09:08 AM
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What I have booked is what greg calls option 4 - that is post paid, refundable (up to 2 days before). This won't help if I don't make it there in time (but it's a non-stop flight that arrives in the morning, so little risk), but will help if there's an issue with my mom. So I'm willing to pay more so I can cancel if needed.

But I don't know if I'll be paying more or less if I post pay. We have a credit card we use for travel with no transaction fees for foreign exchange. So I guess it IS a lottery, the only difference being whatever small amount of interest we get on that money between now and then.

Is this now standard practice? Is this of benefit to the booking company or the hotel? (Surely I'm last in line here).

Still confused,
Alice
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Old May 21st, 2015, 09:24 AM
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The hotel wants you to chose a nonrefundable option, of course. That lets them keep the money even if you cancel. I'm sure ít makes the booking company happy, too, since they probably get a percentage (not sure how that works, actually). And a prepaid nonrefundable means they get the money faster and they won't have to argue or nag to get someone to postpay after cancelling.

As a traveller, the important thing is to be aware of what the booking/cancelling conditions are and what you can afford to lose.
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Old May 21st, 2015, 09:26 AM
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Many of those sites have discounts if you prepay, because they know they get their money. That's worth a lot to the hotel and they can plan better. This isn't new, it's been going on for a long time. Not only Expedia, booking.com, etc but most of the major hotel sites I've seen where you book directly. And I don't necessarily mean huge chain hotels, many hotels of all kinds do that.

I don't usually book nonrefundable unless there is a huge discount and I'm sure I'll go. I don't plan based on possible emergencies as I don't have many of those issues. YOu usually save money, of course, why else book a nonrefundable fare. If not, don't do it.

I think some years ago, Expedia used to be entirely prepayment. That isn't the case now as I just booked a Parisian hotel on them, and it wasn't prepaid. But the rates shown were "advisory", and I checked with the hotel and found out the real rate they were booking me at. I just hope it's accurate because it ends up that Expedia was giving me the prepaid rate but claiming it was not a prepayment, I didn't pay until departure. And with this hotel, that was considerable savings (40 euro a day), which is the only reason I booked through Expedia rather than the hotel.

It's easy to figure out, just look at the difference in rates as to how much you are savings. Go to the hotel's website and see what their rates are and compare. use www.oanda.com or whatever to see the exchange rate to figure it out.

Prepayment is a benefit to both the booking company and the hotel usually.
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Old May 21st, 2015, 09:33 AM
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Many times the pre-pay is a significant discount but non-refundable.

Depends on how firm your plans and/or if you have trip insurance.

I do often pre-pay -- especially when it gets me a 25%+ reduction.
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Old May 21st, 2015, 11:31 AM
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I almost always pick the post-pay, refundable option. On my upcoming vacation, I've already tweaked the dates and the hotels three times. And I did once have to cancel a trip entirely due to a family emergency.

Things like the exchange rate fluctuations and opportunity cost (lost interest) would amount to pennies, not worth worrying about.
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Old May 21st, 2015, 11:56 AM
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>>not worth worrying about.<<

Amen.
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Old May 21st, 2015, 02:17 PM
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We do what bvl does - we pick the refundable cancellable option, unless we're absolutely certain that our plans won't change.

We did this on our trip to NZ, using booking.com which has a very user-friendly website, and did in fact use the option to cancel some of our accommodation as we realised that we had bitten off more than we could chew.

The best cancellation terms that I have found are offered by Best Western, especially if you have a loyalty card - in Germany last year we could have cancelled up to 6pm on the day of arrival. We didn't, but it was nice knowing that we could.
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Old May 22nd, 2015, 11:14 AM
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Well, I'm with post-pay refundable option folks. The difference in cost is not that much and well worth the peace of mind. And I HAVE been known to change dates, so not having to arrange a refund is certainly preferable.

Thanks for all the perspectives!

Alice
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Old May 22nd, 2015, 11:29 AM
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"the refundable cancellable option, unless we're absolutely certain that our plans won't change. "

Same here...I have changed hotels and dates more than once.
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