Pay now vs Pay later on travel booking websites

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You could have several different reasons for the two options:

  • In one instance, it's just a matter of convenience for you. The price is the same, the only difference may be that the currency exchange rate changes between now and your stay (if the hotel's local currency is different from yours/your card issuer's). Remember that even if the price is quoted to you in local currency, the actual contractual price is usually the one in the local currency.

  • Another case (the most common, probably) is refundable vs. non-refundable rates.

    A non-refundable rate is usually cheaper, but you must pay right away, and you won't be able to cancel (or there could be substantial cancellation fees).

    A refundable rate is usually paid at the hotel, though a credit card will often be required at booking time to "guarantee" the reservation (it won't be charged, though something like a $1 authorisation -- not charge -- could be made to check the validity of the card). If you don't show up, or cancel at the last minute, you will usually be charged for one night. If you cancel early enough, no charge will be made at all. If you stay at the hotel as planned, it will be the hotel who will charge you.

  • Yet another case is when the booking site actually "buys" rooms from the hotel at a reduced rate. They can then sell the room at the same price as the hotel, slightly cheaper, or, in the most extreme case, lower than they bought it (if they still have the room available when getting very close to the date, and little chance of selling it). In that case, it's definitely the booking site selling the room, not the hotel, so they will usually charge you at that point. You can still have this option alongside regular bookings.

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