How do hotel cancellation, prepayment and currency changes combine?
I was looking on booking.com to book some hotels for our trip next year. Quite a few deals have free cancellation until 1 day before arrival, which is always useful. However most of them also have a prepayment of 100% of the first night or even the complete booking "on the day of booking". So if I book now, the price for a full night will be charged on my credit card today (or at least this week)?
Cancellation: If cancelled or modified up to 1 day before the date of arrival, no fee will be charged. If cancelled or modified later or in case of no-show, 100 percent of the first night will be charged.
Prepayment: 100 percent of the first night will be charged on the day of booking.
If I cancel in time, how sure can I be that I get everything back? Next to that, I'm booking the rooms in USD, but my card and account are in EUR. My bank charges 1,5% fee to change between currencies. When I get my refund, this will be again charged a 1,5% fee? (Not taking into account that the exchange rate between 2 currencies also change over time).
Best Answer
Unfortunately, you can't. Your "100% refund" will almost certainly be a different amount than your original payment (in terms of your local currency).
I can't speak to the EU in specific, but unless there's some law that specifically requires card issuers to shield customers from exchange rate risk, you won't be protected again this. Exchange rates fluctuate constantly and the rate applied to one transaction will be different from the rate applied to another transaction depending on when it is processed by your financial institution.
The ability to transact at current exchange rates, instead of at a fixed rate (e.g., if you converted all your money at once at a currency exchange place at the start of your trip) is one of the advantages to using a credit card while travelling.
As far as the foreign transaction fee charged by your bank, I would guess you will be assessed the fee twice. This may depend on your bank, but they could easily argue that it makes sense to charge the fee twice -- they are receiving the refund in a foreign currency and need to convert it to your local currency before processing it on your behalf.
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How does prepayment work for hotels?
Prepayment is when you pay for something in advance. When booking a hotel, this means paying for the room at the time of booking instead of on departure or arrival. The benefit of paying upfront means that all costs are accounted for at the time of reservation.Are hotel prepayments refundable?
During the booking process, guests use their card to pay for part of the reservation, often just the first night. Prepayment is usually for partially refundable or non-refundable bookings, so if the guest cancels, they won't get that amount back.How does hotel cancellation work?
Most IHG properties allow you to cancel 24 hours before your scheduled arrival date without charge and for a full refund, but depending on the rate and the property booked, you could have up to 6 hours before your check-in time to cancel without charge, or a totally non-refundable room from the time of booking.How can I get out of paying my hotel cancellation fee?
Call the hotel to ask for a refund or ask to waive the fee. Explain why you were unable to keep your reservations. This is more effective if you have a valid excuse, such as illness or inclement weather that prevented travel.How Hotels Price Rooms
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Answer 2
In truth, very few places (in the US, at least) will actually charge your card at time of booking. Many will say that they will, especially for non-refundable bookings, but in general your credit card will normally be charged :
For "pre-paid" bookings - somewhere between a few days before your arrival date, and when you check-out.
For non-prepaid bookings - at check-out (although a hold will be put on your card at check-in or maybe a day or so earlier)
Charging at time of booking, especially for refundable bookings, creates countless accounting issues for the hotel which is why they generally avoid it.
More and more hotels are using text stating that your card will be charged 'sometime between time of booking and the day before your stay commences' rather than claiming it will be charged at the time of booking.
If you want to find out when you're actually being charged, try making your booking using a card where the charge will not be approved (eg, a pre-paid card with insufficient funds available) and then see when they contact you regarding problems charging your card. You'll find that it's normally no more than a day before arrival. Note that this can backfire if the hotel cancels the booking due to not being able to charge you - especially if it's an international booking/phone number.
Note that these comments only apply when it is the hotel that it actually charging you, which is the case when you book either via the hotel themselves, or via a "travel agent". Most hotel websites, including bookings.com, are simply "travel agents". The exception is services like Priceline and Hotwire's opaque booking services (where you don't know the exact hotel before you book), and some group booking sites - in these cases you will be charged the moment you make your booking, however there's generally no refunds so it's not that relevant to the question.
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