Tag: hotel prices

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How Cheap Does a Nonrefundable Hotel Rate Need to Be?

How Cheap Does a Nonrefundable Hotel Rate Need to Be?

You find the same hotel room for $225 with free cancellation or $199 if you pay now and give up the refund. The nonrefundable rate saves $26. Is that a good deal?

There is a surprisingly useful way to answer that question. Instead of vaguely asking whether your plans are “pretty certain,” compare the discount with the actual chance that you will have to cancel.

A 10% discount on a fully nonrefundable room is, in simplified terms, a bet that your chance of canceling is less than 10%.

The Discount Is What the Hotel Is Paying You to Take the Risk

Refundable and nonrefundable rates are not economically identical hotel rooms. With the refundable rate, part of what you are buying is an option: the ability to walk away before the cancellation deadline and get your money back.

The nonrefundable rate takes that option away. The discount is your compensation for accepting the risk.

This is not just a theoretical pricing distinction. Hilton’s current Advance Purchase terms, for example, say its nonrefundable rates commonly discount the Best Available Rate by 8% to 15%, with somewhat larger discounts available to Hilton Honors members. They also require full payment upfront and generally prohibit modifications.

So the useful question is not simply, “Is the nonrefundable room cheaper?” It obviously is. The useful question is whether it is cheap enough.

A Simple Break-Even Test

Suppose the refundable version of a hotel stay costs $1,000 and the completely nonrefundable version costs $900.

You save $100, or 10%, by locking yourself in.

If the trip definitely happens, the $900 rate wins. If you cancel, however, the refundable room costs you nothing while the nonrefundable reservation still costs $900.

The break-even calculation is:

Break-even cancellation risk = (refundable price − nonrefundable price) ÷ refundable price

In this example:

($1,000 − $900) ÷ $1,000 = 10%

If you believe there is less than about a 10% chance that you will need to cancel, the nonrefundable rate has the better expected financial outcome. If the cancellation risk is greater than 10%, paying $100 more for flexibility starts to make financial sense even before considering the convenience of being able to change the reservation.

Refundable total Nonrefundable total Discount Break-even cancellation risk
$500 $475 5% 5%
$800 $720 10% 10%
$1,200 $1,020 15% 15%
$2,000 $1,600 20% 20%

That makes the shortcut easy to remember. When the entire cheaper rate is at risk, the percentage discount is approximately the cancellation probability you need to beat.

Why a 5% Discount Usually Does Not Excite Me

Imagine a four-night stay where the refundable rate is $800 and the nonrefundable rate is $760. You are risking $760 to save $40.

Unless the stay is imminent and unusually certain, that is not much compensation for surrendering your flexibility. A change in work plans, an illness, a canceled event, a family issue or a disrupted itinerary can wipe out twenty bookings’ worth of $40 savings at once.

Move the discount to $120, however, and the decision becomes more interesting. At $680 versus $800, you are being paid a 15% discount to accept the restriction.

That does not automatically make the nonrefundable room a good choice. It means the hotel is finally offering enough money that the risk deserves serious consideration.

Flexible Rates Can Be Worth More Than the Refund

The simple break-even calculation actually understates the value of flexibility in some situations.

A cancellable reservation can also let you rebook if the price falls. If you reserve a room for $300 a night today and it drops to $240 two months later, a flexible booking may let you cancel and make a new reservation at the lower price, subject to the specific rate rules and availability.

A prepaid nonrefundable reservation can leave you watching that cheaper price without being able to do anything about it.

Flexibility is also especially valuable when the hotel stay depends on something else happening first. Think about a hotel before a cruise, accommodation tied to a concert or sporting event, a trip awaiting work approval, or an international stay before flights have been finalized.

The more dependencies your trip has, the less attractive a small nonrefundable discount becomes.

Compare the Same Stay Before Doing the Math

Do not calculate a 12% “discount” until you know the two rates actually buy the same thing.

Check the room type, taxes, mandatory charges, breakfast, parking, loyalty eligibility and exact cancellation deadline. Our guide to finding the real hotel price after resort fees and other costs explains why the first number on the screen can still be a poor comparison point.

Booking channel matters too. A cheaper Expedia or Booking.com reservation may have different cancellation terms or may give up hotel loyalty benefits. We have a separate method for comparing hotel-direct rates with Expedia and Booking.com based on effective cost rather than headline price.

Most importantly, read the actual cancellation language. “Flexible” does not necessarily mean cancel anytime, while “prepaid” does not by itself tell you whether a rate is refundable. Hotel policies can vary by property, date and rate plan.

When I Would Take the Nonrefundable Rate

I become much more comfortable giving up cancellation rights when the stay is close, the rest of the trip is already locked in and the discount is large enough to matter.

A hotel next weekend for a wedding I am virtually certain to attend is different from a hotel nine months from now for a trip whose flights have not been booked. I would also care less about refundability on a $90 one-night stay than on a $3,000 resort reservation where losing the entire payment would materially hurt.

My practical checklist would be:

  • How much money am I actually saving?
  • What percentage of the refundable rate is that?
  • How likely is it that the trip changes or disappears?
  • How much money would I lose if that happens?
  • Are there unresolved flights, events, work plans or other dependencies?
  • Would losing the entire payment be merely annoying or genuinely painful?

If a nonrefundable room is only 5% cheaper, I usually want an extremely firm trip before taking it. At 15% or 20%, I am much more willing to consider accepting the restriction.

And if the discount is zero or trivial, there is nothing to calculate. Take the flexibility.

Use the Percentage, Not Your Gut

Hotel booking sites are designed to make a lower price feel immediately attractive. “Save $84” is more persuasive than “give us $716 today and agree that you may never get it back.”

Turning the discount into a percentage makes the trade much easier to see. A 7% discount means you are taking a fairly large financial risk for 7% compensation. A 17% discount is a substantially different proposition.

The cheapest hotel rate is therefore not always the one with the lowest price. Sometimes paying a little more buys an option that is worth more than it costs.

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Hotel Resort Fees in 2026: How to Find the Real Price Before You Book

A hotel room advertised at $199 a night used to have a nasty habit of becoming a $249 room by the time you reached checkout.

The culprit was often a resort fee, destination fee, amenity fee or similarly named mandatory charge that was not included in the headline rate.

That became harder for hotels and booking sites to do after a federal pricing rule took effect in May 2025. But resort fees themselves did not disappear.

If your goal is to find the cheapest hotel in 2026, you still need to understand what is included in the displayed price, what can legally appear later and which optional expenses can make an apparently cheap room expensive.

The Short Answer

Hotels can still charge resort fees in 2026.

What changed is how mandatory fees must be displayed. Under the Federal Trade Commission’s Rule on Unfair or Deceptive Fees, businesses offering short-term lodging generally must prominently display the total price including mandatory fees they know and can calculate in advance.

Government taxes and genuinely optional extras can still be added separately.

So the old “$199 room plus a surprise $45 mandatory resort fee” pricing model should generally appear to you as a $244 price before taxes rather than $199.

What Counts as a Resort Fee?

A resort fee is a mandatory charge added to a hotel stay, often supposedly covering a package of amenities.

Depending on the hotel, that package might include:

  • Wi-Fi
  • fitness-center access
  • pool access
  • local phone calls
  • bottled water
  • beach chairs or towels
  • fitness classes
  • shuttle service
  • food or beverage credits

The problem for travelers has never just been whether those amenities have value. It is that guests often cannot decline the fee even if they do not use them.

If you must pay it to stay at the hotel, it is part of the cost of the room.

What Changed in 2025?

The FTC’s fee rule took effect May 12, 2025 and applies to short-term lodging as well as live-event tickets.

The rule requires businesses displaying a price to show the total price upfront, including mandatory charges they know and can calculate in advance.

The FTC gives an especially clear example: if a resort charges $199 per night plus a mandatory $39-per-day resort fee, the mandatory fee must be included in the total price displayed to the consumer.

This applies not only to hotels themselves but also to businesses selling short-term lodging.

What Can Still Be Added Later?

The rule does not mean the first number you see is necessarily the exact amount that will hit your credit card.

Some charges can still be excluded from the initial total, particularly:

  • government taxes and fees;
  • optional services you choose to purchase;
  • charges that cannot reasonably be calculated until you make a choice.

For example, optional valet parking does not have to be built into the room price if you can simply choose not to park there.

A mandatory destination fee is different. If every guest has to pay it, changing the name from “resort fee” does not make it optional.

Resort Fees Have Not Been Banned

This is an important distinction.

The federal rule is primarily a price-transparency rule. It does not generally prohibit a hotel from charging a $40 resort fee.

It requires the mandatory fee to be reflected in the upfront total price rather than being used to make the room initially appear cheaper than it really is.

For travelers, that is an improvement because comparison shopping becomes easier.

But a hotel charging a large mandatory fee can still be expensive.

How to Compare Two Hotels Correctly

Suppose you are considering two hotels for a three-night stay.

Hotel A Hotel B
Displayed nightly price $225 $245
3-night lodging price $675 $735
Parking $50/night Free
Breakfast Not included Included

Hotel A initially looks $60 cheaper.

But if you have a car, its parking adds $150. If you would otherwise spend $40 a day on breakfast for two people, Hotel B may easily become the cheaper stay.

The mandatory resort fee should now be reflected in the displayed lodging price. Other trip costs still require your own calculation.

Watch for Parking

Parking is one of the biggest remaining hotel-cost traps because it can be both expensive and legitimately optional.

A city hotel charging $55 a night for parking may still advertise a lodging price that excludes parking if guests can arrive without a car.

For a four-night stay, that is another $220.

Before booking, check:

  • self-parking price;
  • valet price;
  • whether parking includes in-and-out privileges;
  • nearby public garages;
  • whether you actually need a rental car.

Also Check the Cancellation Policy

A hotel at $240 per night with free cancellation may be better value than one at $220 that is completely nonrefundable.

That $20 difference buys flexibility.

When comparing prices, make sure you are looking at the same:

  • room type;
  • number of guests;
  • cancellation terms;
  • payment timing;
  • included meals;
  • parking situation.

Otherwise the lower price may simply represent a worse product.

Direct Booking vs. Expedia or Booking.com

The new fee-display rules make OTA-versus-direct comparisons easier, but you should still check both.

An Expedia or Booking.com member price may be cheaper. A direct reservation may earn hotel points, elite-night credit or status benefits.

We break that calculation down in our guide to booking a hotel directly versus Expedia or Booking.com.

The important point here is to compare the same stay after mandatory fees rather than comparing two different headline prices.

Airbnb and Vacation Rentals Are Part of the Same Problem

Vacation rentals can have their own assortment of mandatory cleaning and service charges.

The FTC rule covers short-term lodging broadly, and its guidance specifically gives a mandatory vacation-rental cleaning fee as an example of a charge that belongs in the displayed total price.

That makes it easier to compare an Airbnb-style rental against a hotel, although taxes and optional charges can still complicate the final bill.

For a broader comparison, see our guide to whether Airbnb is actually cheaper than a hotel.

A 60-Second Hotel Price Check

Before booking, I would check five things:

  1. Total lodging price: Ignore the old habit of multiplying a tempting headline rate without checking the total.
  2. Taxes: These may still appear separately.
  3. Parking: Especially important in cities and resorts.
  4. Meals and credits: Free breakfast or a genuinely useful food credit can change the comparison.
  5. Cancellation: Make sure the cheaper rate has acceptable terms.

Then divide the realistic total cost by the number of nights.

That is the number worth comparing.

What If a Hotel Still Hides a Mandatory Fee?

If a U.S. hotel or booking business advertises a lodging price and then adds a mandatory fee that should have been included upfront, save screenshots showing what was displayed.

The FTC accepts consumer reports through ReportFraud.ftc.gov.

A pricing discrepancy may also be worth raising with the hotel or booking platform before completing the purchase.

Bottom Line

Resort fees still exist in 2026. What has changed is the ability to hide them behind a deceptively low advertised hotel rate.

Mandatory fees that can be calculated upfront generally belong in the prominently displayed total price. Taxes and genuinely optional extras can still increase what you ultimately spend.

That means hotel comparison shopping is easier than it used to be, but it is not automatic.

Compare the total lodging price, then add the costs that matter for your particular trip: parking, food, transportation and flexibility.

The cheapest hotel is the one with the lowest real cost—not the lowest number that first caught your eye.

Source: Federal Trade Commission, Rule on Unfair or Deceptive Fees FAQs. The rule took effect May 12, 2025. Pricing practices and legal requirements can change.

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Hotel Direct vs. Expedia or Booking.com: Which Is Actually Cheaper?

Search for the same hotel on three websites and you may get three different answers about what the room costs.

The hotel’s own website might show $229. Expedia might show $211 for members. Booking.com might offer a Genius rate of $206. At first glance, the cheapest choice seems obvious.

But hotel bookings have a hidden complication: the lowest advertised rate is not necessarily the option that leaves you spending the least money.

If you book a major chain hotel through Expedia or Booking.com, you may give up hotel points, elite-night credit and some status benefits. You may also have to deal with the booking site rather than the hotel if something goes wrong. On the other hand, third-party sites sometimes offer discounts large enough that none of that matters.

Here is how to decide whether you should book a hotel directly or through Expedia, Booking.com or another online travel agency.

The Short Answer

If the prices are close, booking directly with a major hotel chain is usually the better value, especially if you participate in its loyalty program.

If Expedia or Booking.com is substantially cheaper, particularly for an independent hotel where chain loyalty benefits do not matter, the third-party rate may be the better deal.

The key is to compare the effective cost of the stay, not just the number displayed in the search results.

Why Expedia or Booking.com Can Be Cheaper

Online travel agencies do sometimes have genuinely lower prices.

Expedia offers Member Prices on selected properties and dates. Its current One Key terms say these prices can vary depending on membership tier, and Expedia also advertises additional app-only discounts on selected hotels.

Booking.com similarly offers Genius discounts at participating properties. Even the entry-level Genius pricing can reduce the room rate enough to beat a hotel’s publicly displayed price.

Hotels can also give travel agencies access to special inventory, package rates or promotional prices. That means you should not assume the hotel website will always be cheapest.

For an independent hotel, a $25-per-night Booking.com discount may simply be $25 saved. There may be no meaningful hotel loyalty program to give up.

Why Booking Direct Can Be Worth More Even at a Higher Price

Major hotel loyalty programs change the calculation.

For example, Hilton explicitly says bookings made through third-party websites such as Expedia and Booking.com do not earn Hilton Honors points, stay credits or night credits, and generally do not receive Hilton Honors member benefits.

Marriott takes a similar approach. Its Bonvoy terms specifically classify bookings through online travel channels including Expedia and Booking.com as non-qualifying rates. Those stays generally do not earn points or elite-night credit and do not qualify for normal membership-tier benefits.

That can turn what looks like a cheaper third-party rate into the more expensive option.

An Example

Suppose you are comparing a three-night stay:

Booking option Nightly rate 3-night total
Hotel website $210 $630
Booking.com $198 $594

Booking.com saves $36 upfront.

But suppose the direct booking earns hotel points worth roughly $25 to you, advances you three nights toward elite status, and qualifies you for breakfast or another benefit you would actually use.

Suddenly the $36 discount may not be much of a discount at all.

If you do not care about points, status or hotel benefits, the calculation goes the other way. Take the $36.

Calculate the Effective Hotel Price

A useful way to compare bookings is:

Effective cost = total booking price − benefits you realistically value

Do not assign fantasy values to benefits just to justify the booking you already want.

If you would never pay $30 for hotel breakfast, do not value a free breakfast at $30. If hotel points regularly expire unused in your account, they are not worth their theoretical redemption value to you.

Use benefits you are actually likely to use.

When I Would Usually Book Direct

Booking directly becomes increasingly attractive when several of these apply:

  • You have meaningful elite status with the hotel chain.
  • You are trying to earn or renew status.
  • The hotel points from the stay have meaningful value to you.
  • Your status provides breakfast, food credits, upgrades or late checkout.
  • The direct price is the same as or only slightly higher than the OTA price.
  • Your plans might change.
  • The stay is important enough that you want the hotel to control the reservation directly.

The last point is easy to underestimate.

Third-Party Bookings Add Another Company to the Reservation

When you book directly, your reservation relationship is generally with the hotel.

When you book through an online travel agency, there may be an intermediary between you and the hotel.

Hilton, for example, tells travelers who booked through third-party sites that changes and cancellations must be handled through the third party.

That does not mean third-party bookings are inherently unsafe. Expedia and Booking.com process enormous numbers of perfectly routine hotel reservations.

It does mean that when something unusual happens, there can be one more party involved in fixing it.

For a cheap one-night stay where saving $30 matters more than anything else, that may be a perfectly sensible trade.

For a honeymoon, cruise-night hotel, overseas arrival at midnight or another stay where failure would be unusually disruptive, I would require a larger discount before adding that complication.

Cancellation Terms Can Wipe Out the Savings

Do not compare only the room price.

Compare the cancellation deadline and payment terms too.

A $189 nonrefundable OTA rate is not necessarily cheaper than a $205 direct rate that can be cancelled until the day before arrival.

If there is even a modest chance your plans will change, flexibility has real financial value.

Make sure you are comparing:

  • refundable with refundable;
  • prepaid with prepaid;
  • the same room type;
  • the same number of guests;
  • the same taxes and mandatory fees;
  • the same breakfast, parking or resort-fee treatment.

Otherwise you may be comparing two products that merely look like the same hotel room.

When Expedia or Booking.com Makes More Sense

I would lean toward the third-party booking when:

  • The discount is substantial after comparing the final totals.
  • It is an independent hotel with no loyalty program you care about.
  • You have an Expedia or Booking.com discount that the hotel cannot match.
  • You have credits or rewards with the booking platform that you will actually use.
  • The cancellation terms are equally good.
  • You rarely stay with the hotel chain and have no reason to accumulate its points or elite nights.

A $5 difference is rarely enough to make me give up meaningful hotel benefits.

A $75 difference might be.

There is no universal percentage because the value of booking direct is completely different for a traveler with top-tier hotel status than for someone who stays at that chain once every three years.

What About Calling the Hotel?

When an online travel agency has a noticeably cheaper rate, it can be worth checking with the hotel before booking.

Do not assume the front desk will match it, and do not spend 30 minutes negotiating over $8. But for an independent hotel or an expensive multi-night stay, a quick call can occasionally produce a comparable direct rate or an extra benefit.

Make sure the rates really are identical before asking. A hotel is unlikely to match a nonrefundable OTA rate with a fully flexible direct reservation.

My 5-Minute Hotel Booking Method

You do not need to spend an hour comparing every hotel reservation.

  1. Find the hotel you want on Google Hotels, Expedia, Booking.com or another comparison tool.
  2. Open the hotel’s own website in another tab.
  3. Sign in on both sides so you see any member prices.
  4. Compare the final price for the identical room and cancellation policy.
  5. If it is a chain hotel, calculate what points and elite benefits you would lose by booking elsewhere.
  6. If the third-party savings still clearly exceed those benefits, book the cheaper option.

This is especially useful because the answer can change from one trip to the next.

You might book a Hilton directly this month because the prices are virtually identical, then use Booking.com for an independent hotel next month because the Genius rate saves $80.

Do Not Become Loyal to a Booking Method

One of the easiest ways to overpay for travel is to decide that one booking channel is always cheapest.

It isn’t.

Hotel websites run member promotions. Expedia runs its own discounts. Booking.com has Genius rates. Credit-card travel portals can sometimes add valuable credits or enhanced benefits. Independent hotels may price differently from major chains.

The cheapest approach is to remain disloyal enough to compare them.

The same principle applies when deciding whether an Airbnb is actually cheaper than a hotel. The advertised nightly rate matters far less than the final price and the benefits you receive for paying it.

Bottom Line

For major hotel chains, I generally prefer booking direct when the price difference is small. Points, elite-night credit, status benefits and easier reservation handling can easily outweigh a modest Expedia or Booking.com discount.

For independent hotels—or when an OTA offers a genuinely large discount—the third-party booking may be the cheaper choice.

Check both. Compare the same cancellation terms. Look at the final price. Subtract only the benefits you will actually use.

Then book whichever one leaves you with the lowest real cost.

Sources: Expedia One Key terms, Booking.com, Hilton third-party booking guidance, and Marriott Bonvoy program terms. Program rules, prices and benefits can change; verify current terms before booking.