The Hidden Cost of Prepaid Accommodations (and why I avoid them!)

Many Napa hotels guests had a rude awakening Sunday morning as the region was rattled by a magnitude 6.1 earthquake. While it sounds like there was a happy ending for most, it serves as a great reminder of why it’s wise to avoid prepaid reservations.

Fueled by the “name-your-own-price” success of, prepaid accommodations have exploded in popularity. Today when you go to book a hotel or rental car, a prepaid option often appears, offering a discounted rate if you agree to “pay now.” While the savings are tempting, these “deals” can cost you in the long run.

A perusal of travel discussion sites quickly reveals that many travelers are unaware that prepaid reservations are set in stone and cannot be modified. If you’re like me and book your travel well in advance, this lack of flexibility can spell Prepay Car Rentaldisaster in a hurry.

Ordinarily when you book a hotel or rental car, you pay at the conclusion of of your trip. This allows you to work out any glitches before the company takes payment. However, when you prepay, no such opportunity exists. In fact, prepay customers are often given the worst hotel room on the property and the rattiest rental car on the lot. Even though that sort of treatment is officially against policy, anyone who has worked in the travel business can attest that is does happen.

Another hangup exists with the airlines. The airlines are constantly tinkering with their schedules, so the possibility always exists that travel on your original dates becomes impossible. If this happens, you could find yourself holding reservations that you’ve paid for but cannot use. Even a change of several hours could lead to your rental car being given away, a real headache should the agency be running short of vehicles.

A similar situation exists in the event of bad weather (or earthquakes!) Should your flight be cancelled or diverted, your prepaid reservation becomes an expensive piece of paper… and your replacement accommodations could cost you a small fortune.

I’ve always felt that the small premium you incur to “pay later” at a hotel or rental car counter is worth the added flexibility, and I have experienced enough travel hiccups over the years to prove my hypothesis. One particular experience with a New York hotel stands out. When my flight into New York was cancelled due to thunderstorms, the hotel manager literally told me “tough luck” and hung up the phone sticking me with the bill for a hotel room I never stayed in.

In the Napa, it looks like most of the hotels did a marvelous job of of taking care of their guests and providing alternate accommodations at other area hotels. But it’s important to realize that when it comes to pre-paid bookings, hotels and rental car companies are under no obligation to be so generous, and unfortunately, many aren’t.

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