Travel Tips: Booking Hotels Online (PART 1: Understanding Rate & Payment Policies)

In the digital age, the most common way to reserve a hotel room is by doing it online.  You can either do it directly with the hotel, through the hotel brand's website, or through a third-party online travel agent such as Agoda, Booking.com, Hotels.com, Expedia.com. But regardless of which website you use, the rates you will find are more or less the same, though there may be special benefits exclusively available to those who book directly with the hotel such as complimentary breakfast.

The downside of online hotel reservations is that you usually need a payment card to guarantee a reservation such as a Visa or Mastercard.  But your card will not always be charged immediately and when that is the case, you do not necessarily have to make actual payment with that same card.
Image by Lotus Head/Wikimedia
The question is how do you know when payments at a hotel will be taken? The short answer is that each hotel has different rates and even within the same hotel, there are different rules.  It is important that you read the rate rules before you key in your credit card details. When hotel room rates are advertised, they are usually an Advance Purchase rate or the Best Available rates, also known as Flexible rates.

Image source: Wikimedia

ADVANCE PURCHASE RATES

When websites advertise the lowest rates (e.g. those that say from $99) for a particular room, and it sounds too good to be true, they probably are.  The catch is that more often than not, payment will usually be required immediately, the moment you confirm your reservation.  These are called "Advance Purchase" rates. You usually have to book this anywhere from seven to twenty-one days prior to arrival. The rate is usually non-refundable and cannot be changed or cancelled.  Even in cases where you can pay at the hotel and not immediately, cancelling your reservation will mean your card being charged the full cost of the reservation.

If you are still fickle-minded about whether you will even push through with your trip, or if you feel better deals may still be out there, or if you are unsure if your visa will be granted, then I advise that you not select an advance purchase rate.

Before you leave for your trip, make sure that you bring the same payment card that you used to make the booking.  For advance purchase rates, your hotel may want to see it to ensure that you are the guest who is entitled to the reservation.  

FLEXIBLE RATES

The flexible rates are known as "Best Available Rates."  Nevermind the word "best," as it simply means the most flexible rate the hotel can offer you.  It may or may not include breakfast and other "free" goodies such as WiFi. Make sure that you read the rate rules for what's included. These rates can vary from 5% to 40%  higher than the advance purchase rates.

When it comes to flexible rates, it depends whether payment will be taken on your card. If it is a major hotel brand, your card usually won't be charged immediately. For relatively localised hotel brands, different policies may apply, which is why it is important to read the rate rules and enquire directly with the hotel if you have any doubts. In either case, you must be aware of the cancellation deadline, which also includes a specific time of day (e.g. 2 pm) that you must cancel by.  If a deposit was charged against your credit card in this case and you cancel before the deadline, your deposit will be refunded.  If you miss the cancellation deadline, you will be charged anywhere from a portion of the first night's stay to the entire stay - read the cancellation rules.

The cancellation deadline depends on the hotel and the rules of the rate that you are booking under. The deadline can be up to three days before check-in or even up until the evening of the day of check-in. For properties that are non-hotel properties such as a hostel, serviced apartment, bed and breakfast, or guest house, the deadlines are usually tighter, sometimes up to a month before you begin travel, especially for some serviced apartments. In some cases, after this deadline, your card will automatically be charged - either as a deposit or payment, just as the case for advanced purchases. The cancellation deadline also applies for making amendments to your trip. For example, if you want to shorten, lengthen your stay, or wish to move your stay to a different date.

When you finally check-in, you do not always have to pay with the same card you used to book. In fact, you can pay in cash in most cases. Though you may need to give a card for pre-authorisation upon check-in, which results in a temporary hold in the funds you can use (for a debit card) or your available credit limit (for a credit card) but not an actual charge on your statement -- just yet.  This is to ensure that the hotel has enough money to take from you in case they find that you have unreasonably damaged certain parts of your room or should you consume any incidental charges such as mini-bar, in-room movies, or long distance phone calls.  If you check-out with your room in one piece, the pre-authorised amount will be released back to your card.

The point is that flexible rates operate in a slightly more complicated atmosphere than advanced rates. Even if the likes of Booking.com will tell you free cancellation is available, it does not necessarily mean that your card won't be charged immediately. Always read the rate rules to find out or ask your hotel. 

FINAL WORDS


Image source: Thierry Samuel/Wikimedia
My advice to you is the first thing you should look for in a hotel's rates is their cancellation policies. If you have an inkling that you may not push through with your trip after all, go for the flexible rate, which can cost anywhere between 5-40% on top of its advanced purchase counterpart. Even if it is a flexible rate, find out if payment will be taken upon check-in or if your card will be pre-authorised.

I would also advise you as much as possible, especially if your trip has many legs, to use the likes of Expedia, Booking.com, Orbitz, or Agoda.  Open an account with just one of them.  The rates are usually the same as if you are booking them directly with the hotel. This way you can easily monitor all of your bookings.  More importantly, having a one-stop shop for all your bookings will save you the shock of a charge on your credit card statement from a hotel reservation you forgot to cancel.

If you wish to amend any aspect of your upcoming stays or cancel them altogether, make sure you do it through the channel in which you made the booking through.  For instance, if you booked a Hilton Hotel reservation using Expedia, do not contact Hilton directly to amend your trip, do so through Expedia. For some, that can be a disadvantage as you must deal with the online website, rather than the simplicity of dealing directly with the front desk. Be sure to consider that before booking hotels online with a third party versus directly with the hotel.

Lastly, regardless of who you do your booking with and when you choose to pay, unless otherwise stated, the final room rate will be based on the hotel's currency.  This means if you were quoted a room rate in your home currency but the hotel uses a different currency, the amount that will be billed to you or debited from your account will be slightly different.  One usual exception will be when you book with a travel agent and pay in advance, although the rate that they will quote you in your home currency may also be slightly inflated.  Check with your bank to see foreign exchange transaction charges that will be applied.

-HybridAce101

You can book a hotel from the PFN page.  Just click the link, "Book Hotels" found on the menu of this website.  

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