Why You Should Never Prepay For Hotels

The first thing we do when booking a trip is to sort out the flights. Paid and done!

We then move on to planning the rest of the trip, from accommodation to activities and sometimes highlight meals. Most people take the same approach to hotel bookings as flights, which is to pay upfront. 

This is a mistake.

Always Pay At The Hotel

I can count the times I’ve pre-paid a hotel booking on my left hand. For me, flexibility is incredibly valuable as I can optimise my itinerary up until the last minute and if I am unable to make the trip there is no sunk cost.

Typically flexible rates allow for free cancellation up to 24 or 48 hours in advance of local check-in time.

Here you can see the saving for the new Hyatt Centric Victoria Harbour in Hong Kong between an Advance Purchase and Standard rate is A$10 per night, which is not worth the saving.

Most savvy travellers use comparison sites like Trivago for hotel comparisons, and they helpfully allow you to filter for rates that are ‘Pay at the hotel’. 

Book Early To Set A Price Ceiling

Unlike airfares, which increases as you get closer to the travel date, hotels tend to offer good deals closer to the date of the stay. 

This should not stop you from making a fully flexible booking for a hotel you would be happy to stay at and at a rate that you are happy with. 

By doing this you have set a price ceiling for your accommodation, from which you can optimise.

Take the Hyatt Centric example above. My first booking for this property was on 3 August 2019 with a rate of approximately A$280.

Had I saved the A$10 then by booking the pre-paid rate, I would have paid A$270 and been unable to take advantage of this A$90 per night saving.

Check Rates Periodically

You should check hotel rates every week or two to see if you can get a better deal. 

This might be a better rate at the hotel where you are booked or a comparable hotel, or at a better hotel for the same price.

Tip: Typically rates start to move a month out from the stay, as the inventory managers at each of the hotels work to balance rates and occupancy. 

Exceptions To The Rule

As with any rule, travel or otherwise, there are exceptions. 

If the hotel is a destination itself and you are reasonably sure the rates will not be discounted, then it can make sense to prepay.

My stay at Mont Rochelle in the Cape Winelands was pre-paid as it offered a 4th night free with Virtuoso benefits, so I was confident it was a good deal.

Even at destination hotels like Belmond Reid’s Palace in Madeira, the pre-paid rates didn’t offer enough of a saving to give up the flexibility.