Did you know that some hotels actually offer a lower rate for a prepaid, non-refundable hotel reservation? This concept is not brand new; many of the major chains like Hilton, Marriott and Starwood have had them for years. But, more and more hotel chains are jumping on the “nonrefundable rate” bandwagon.

These lower rate offers will often show up on consumer travel websites, but take caution, the offer names may be a bit misleading. They are advertised in ways that don’t make their restrictions super obvious. You may see deals offered that say things like “Book Early and Save”, “Advanced Purchase” “Limited Time Offer”.

So why exactly are hotels taking this new approach? There are a number of reasons.

By offering the lower rate, the hotel is guaranteed payment for the full stay of the reservation. Customers can’t simply check out earlier than they had planned, causing the hotel to lose the extra nights of held space.

Also, by peaking potential guests’ interest in their property with the low rate, hotels know that many travelers will end up choosing more expensive, cancelable reservations.

Travelers have been getting wise to hotels’ trick of dropping prices at the last minute, so these lower nonrefundable rates discourage people from canceling and rebooking later at the lower rate.

These non-refundable hotel rates can be a great deal, so if you are interested in booking them here are some tips:

Read all the terms and conditions carefully before you enter any credit card information. This ensures that you aren’t locked in to a condition you didn’t know about such as a minimum stay.

Do some research. Look around other sites and the hotel’s website itself to make sure you are in fact getting a deal, and aren’t just locked in at a rate that could be booked elsewhere without the commitment.

And finally make sure booking the non-refundable rate is worth it. The locked in price may not be even be that much cheaper than the standard price.

For example I saw a hotel in New York offering rooms for just $30 per night cheaper at the non-refundable rate…but if you booked the regular room, you had the option to cancel up to 3 days prior. So, if you like to be flexible with your travel plans this is something to consider.

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