Which Hotel Rate Types are Best for Business Travel?

By Tiffany Mast

When you’re booking a hotel for your next business trip, make sure you’re selecting a rate that makes sense for you.

Business travelers tend to need more flexibility, since things can come up like a business meeting getting rescheduled. There are travel policies at play, like whether your company prefers bookings to be charged to company cards or personal cards (and reimbursed later). Then there’s also the tradeoff between cost savings and perks, like earning hotel loyalty points, that need to be considered. To say the least, selecting the right hotel is a nuanced decision.

So which hotel rate type is right for your business trip?

Rate Types Reasons to Choose Considerations
Refundable Get more flexibility with these rates. You can cancel your reservation. You can expect a full refund. You can usually earn loyalty points. These rates tend to be more expensive than non refundable rates.
Nonrefundable These rates often cost less than refundable rates. You give up the flexibility to change and cancel without penalty.
Pre-pay A good option for booking with a company card. If you do charge a personal card, you can submit for reimbursement right away. Sometimes less expensive than post-pay. Check whether the rate is refundable or nonrefundable before pre-paying. You still need to put a credit card down at check in for incidentals and taxes.
Post-pay The most traditional type of hotel room rate, and frequently available. You have to charge the room to a card you physically have at check in (usually a personal card).

The Types of Hotel Rates

To dive into more detail, there are two main decisions you need to make when selecting a hotel room, and various pros and cons to each rate type. The first question is whether a refundable or nonrefundable rate makes the most sense for you. Second, consider whether your company’s policy and travel scenario fit better with a pre-pay or post-pay rate.

REFUNDABLE RATES

A good option if you need flexibility.

Refundable rates offer you more flexibility. If your plans change, you can change or cancel your hotel room reservation per the penalty period of the property. If you prepaid for the room, you can expect a full refund. If you only reserved the room and plan to pay at checkout, the reservation is simply cancelled. And refundable rates usually allow you to earn your loyalty points. However, with refundable rates you can usually expect to pay more for this flexibility.

NONREFUNDABLE RATES

Often less expensive, but come with more restrictions.

Nonrefundable rates are often lower than refundable hotel rates, for the same type rooms. When selecting a nonrefundable rate, you may save money but give up the flexibility to change and cancel. Even when done ahead of time, you usually cannot cancel without penalty, and it’s rare for the hotel to offer a waiver or exception.

When booking a nonrefundable rate, be aware of the terms, as they can vary by hotel brand and property. After booking, you should be able to reference your booking confirmation for cancellation policies and restrictions. If you decide to book a nonrefundable rate, make sure your dates are set and there is no chance you will need to cancel your reservation.

PRE-PAY RATES

Also less expensive, but can come with more restrictions.

Pre-pay rates are a good option when you are booking your hotel room with a company card. And even if you do charge a personal card, you can submit the expense for reimbursement right away.

With pre-pay rates, you pay for the hotel room up front, and will still need to put a card down on the room for incidentals at check-in, but are only charged for incidentals and outstanding taxes and hotel or resort fees at checkout. You should check whether the pre-pay rate you are selecting is refundable or nonrefundable before booking to make sure the cancellation terms work for you.

POST-PAY RATES

The most ‘traditional’ type of hotel reservation.

When you book a post-pay rate, a credit card is used to reserve a room, but not charged up front. You then put down a credit card at check-in, and can change the credit card at check-in, so the card you use to reserve the booking doesn’t have to be the one you use to pay for everything.

The card put down at check-in is used to pay for the full room bill plus incidentals, taxes, and any other fees at checkout. Post-pay rates may be risky for business travelers because if you reserve the room with a company credit card that you don’t physically have, you won’t be able to use it on site because the hotel requires a physical card to swipe for the full room rate upon check in.

The next time you book a business trip, make sure the hotel rate type you select fits with your needs and your company’s policy.

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