If your travel policy excludes non-refundable hotel rates, you may be leaving money on the table. These rates typically come at a discount compared to their flexible counterparts – often around 10% less per night. That may sound small, but across hundreds or thousands of bookings, the savings can add up fast. But before you make the switch, it’s worth asking: Is this the right move for your program?
The decision to include non-refundable hotel rates often comes down to balancing savings with risk. While these rates help trim costs, they can lead to sunk costs if a traveler cancels. Still, in many cases, the reward outweighs the risk – especially when the conditions are right.
Here are five questions to help you decide where and how to incorporate non-refundable rates into your travel policy:
- How close to departure do your travelers book hotels? Non-refundable rates are great for bookings made within a few days of travel. BCD data found that only 5% of hotel reservations made three days or less before travel are canceled. That low cancellation rate means there’s minimal risk in steering travelers toward non-refundable options for these short booking windows – while reaping the savings.
- Are hotel costs high or stays lengthy? The more expensive the stay, the more you stand to save. If your travelers are booking rooms for $250 a night over four or five days, that 10% discount can quickly make a noticeable impact on your bottom line. Consider applying non-refundable rate guidance to high-cost properties or trips with longer stays.
- Are most of your bookings for short stays? Single-night or short hotel stays are another good use case. Why? Because the potential financial loss is relatively small. A canceled $150 room is easier to absorb than a multi-night booking, and in the vast majority of cases, the trip goes ahead as planned – turning that non-refundable rate into real savings.
- Are certain bookings more prone to cancellation? Be thoughtful about when and where to apply non-refundable policies. If bookings are made far in advance or are tied to volatile events or shifting schedules, it may be wiser to stick with refundable rates. Flexibility here can prevent greater losses later.
- Are travelers already booking non-refundable flights? If the traveler is confident enough to book a non-refundable airfare, then it is highly likely that the trip will happen. This makes booking a non-refundable hotel rate a smart move to maximize savings.
Get stakeholders on board
Before adding non-refundable hotel rates into your policy, start conversations with your internal stakeholders – especially your finance and accounting teams. Will they cover costs for canceled rooms? Are they aligned with your savings goals? Use concrete examples and data to demonstrate the financial upside of non-refundable rates, while being transparent about trade-offs.
Engage your travelers
Once you’ve decided where non-refundable rates can have a positive impact on your program, be sure to communicate these changes with your travelers. Make it clear when non-refundable bookings are appropriate and when flexibility still takes priority. Use email updates, policy refreshers, and in-tool messages to keep everyone informed and confident in their booking choices.
Non-refundable hotel rates aren’t for every traveler or every trip – but when used strategically, they can unlock meaningful savings for your travel program.
Want help deciding where non-refundable rates make the most sense?
Talk to your BCD program manager or connect with our Advito experts to evaluate opportunities in your hotel program.
