Over the years, we’ve booked numerous hotels and often face the decision of whether to choose the advance purchase rate or the best refundable rate. Hotels usually offer a lower price if you’re willing to pay for your entire stay upfront. But is the savings from paying in advance really worth it?
Unlike having to pay for your train, plane or cruise ship ticket ahead of time, you can pay for other travel expenses, like a hotel room, when you’re finished with your stay. It didn’t take long for hotel companies to figure out that people were canceling reservations at the last minute, so hotels now give an incentive to pay for your room ahead of time, in the form of a lower price.
For example, here are the prices for a 2-night stay at the Residence Inn in Cape Canaveral.
The flexible member rate is $419 for a two-night stay.
The advance purchase is much lower, only costing $370 for the same room.
That’s a $24 difference per night or $49 for the stay. However, there’s a downside to the prepaid rate, as it’s also non-refundable.
You must decide if you’re willing to risk losing $370 if you need to cancel to save $49. I’m looking at a reservation just 2 months away, but many things can change in that amount of time.
I try to never book a non-refundable advance purchase rate. I’m not willing to risk the money just to save some dollars. That’s why I’m not a gambler (and why we only visit Las Vegas for the shows and not the casinos).
I’m still looking to save a buck wherever I can. Thankfully, there’s a way for me to have my cake and eat it too. There’s a AAA rate in between the two prices. Remember that AAA is worth more than just road service.
With a total price of $393, that’s $23 more for the two nights. For $12 a night, I get to pay for the room after my stay. Note that no deposit is required for the AAA rate. Here’s the cancellation policy:
You may cancel your reservation for no charge before 11:59 PM local hotel time 2 day[s] before arrival.
That’s the same policy as the Flexible rate.
When I first wrote about advanced purchase rates, several readers mentioned Marriott offers a senior rate that’s usually comparable to the AAA rate (without requiring an AAA membership.)
In this instance, it’s $3 less than the AAA rate.
Final Thought
There are cases where I may book an advance purchase rate. If I read the policies and can cancel the room until a few days before the stay and get a refund, I’ll consider paying in advance if the price is right. I’m also more willing to pay in advance the closer I am to the day of the stay. If I book a room only a day or two in advance, I might be within the cancellation policy anyway, so why not save a few bucks?
I don’t see many instances where it’s worth booking a hotel room where you need to pay the entire amount in advance and lose all your money if you need to change your plans.
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2 comments
I kind of try to do a risk analysis for pre-pay on a hotel. I think of the certainty that I will be using the stay (never 100%) but if is a week away I may say 90% chance I am staying. So I would prepay for a 10% discount. If months away maybe only a 75% chance it gets used–then I would need a 25% discount to pre-pay, etc…
Only times I’ve ever done a prepaid rate was to get the hotel credit with the Amex Platinum. The hotels that allow usually have a fairly generous cancellation policy of 2-5 days prior for a full refund.