On the Spot: A refundable hotel reservation may cost you
Question: I want to book four nights in a hotel in Venice, Italy, for mid-April. It will be about 800 euros, about $1,075. I was all set to book when I realized that my credit card would be charged upon booking, and it wasn’t refundable. A refundable reservation would be about 1,000 euros, almost $1,350. This is not common in the United States. Is this a Venice situation? A Europe thing? Do I risk waiting another month? Do I swallow my compunctions and book?
Answer: This is not a Venice or a Europe thing. These days, it’s a hotel thing.
Like the airlines, hotels have discovered that last-minute cancellations can be a problem. Taking a page from the airlines’ playbook, hotels in the U.S. and abroad increasingly are offering a nonrefundable rate as a way to ensure that their rooms are full, just as airlines want to make sure there are seats in their seats. You book a little early, you get charged a little less, but there’s a trade-off: “If you have any thought you might want to change plans,” said Anne Banas, executive editor of SmarterTravel.com, “you’re going to be totally stuck.”
If imitation is the sincerest form of flattery, the airlines should be beaming.
Expect to see more of this.
“We’ve seen it increasingly the past few years,” said Tom Meyers, editor of EuroCheapo.com, a guide to budget hotels in Europe. Hotels “will often offer a nonrefundable rate and a ‘free’ cancellation rate, and there’s usually about a 10% difference.”
A “free” cancellation rate?
Meyers acknowledges the sleight of hand in this. “They call it ‘free cancellation,’ but you’re paying extra for it,” he said.
But, he noted, the nonrefundable booking solves a big issue for hotels. “Several years ago, they had a major problem: [Travelers would] book a month in advance, and then spend the next month hotel shopping.” If they found a better price, they would cancel. “I’m just as guilty,” he said. “I’m sure I did the same thing.”
So don’t think of the prepaid, nonrefundable room as Lucy pulling away the football from Charlie Brown; think of it as a reward for being a good planner.
Conversely, “This doesn’t work for people who are, shall we say, flexible travelers,” he said.
The super-flexible traveler — you know, the one who doesn’t make reservations till the day he or she needs them — also gets rewarded. In the olden days, you’d walk into a hotel late in the day and ask if there were rooms the desk would like to give you at a big discount. Although colleagues told me it worked for them, it never worked for me, perhaps as a result of ineptness or the appearance of unscrupulousness.
Today, the inept/unscrupulous-looking among us turn to apps such as Hotel Tonight (iPhone and Android), which help you find same-night accommodations at big savings. On Monday, for instance, the Oceana Santa Monica was offered at $250 a night. Oceana’s website bragged about a last-minute sale too, but it was a price cut from $370 to $295. Who says being a procrastinator doesn’t pay?
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