Booking a Hotel Room - Prepay or Pay at Hotel

 Modes Of Payment for Booking a Hotel Room

OTAs (Online Travel Agents or Agencies) provides two modes of payment to customers for Booking their rooms online i.e., Pay at Hotel and Prepay.

Pay At Hotel - As the name itself suggests that Customers can Book their hotel room online and make payment for the same at the hotel. This mode of payment is also known as Book Now, Pay Later !

Pros of Pay At Hotel mode for Hotel Owners and Customers 

Hotel owners allow customers to Book their hotel room now and Pay Later option during weekdays or low demand dates, so that Customers do not worry about Cancellation Charges and plan their tour without any Payment restrictions. Thus It becomes easier for customers to plan their trip and book a hotel without being worried about non refundable or cancellation charges.

Cons of Pay at hotel mode for hotel owners and customers

The biggest negative point of allowing customers to book hotel now and pay later is High cancellations and No Shows. Usually Customers tend to book 3-4 hotels unnecessarily as no prepayment is involved and check-in into 1 hotel. So other hotel owners keep waiting for them and ultimately their rooms ho vacant. Hotels owners can not afford such opportunity loss of selling rooms on peak demand days and that's why they only allow Customers to Pay Later during low demand days.

It is also seen that sometimes hotel owners do not keep the rooms reserved for customers who chose to pay later and sell it off to someone else if they get a customer directly. Hotel owners sometimes do this because they are unsure of if the customer will turn up or not. So it's always better for them to sell the rooms whenever someone asks for.

Prepay / Prepaid Mode - When a customer chooses Prepaid option while making the Booking, they need to make the payment for the room in advance.

Pros of Prepaid Hotel Bookings for Hotel Owners and Customers

When a customer makes a hotel booking and makes a Payment also for the same in advance, it means his travel plan is almost confirmed. Usually people do not pay advances for tentative travel plans. This way hotel owners are sure that their rooms have been sold and their revenue is already booked. Usually hotels owners apply restriction of Prepaid and allow Bookings to be made onlywith advance payment during high demand days. Customers can also be sure of getting a room reserved as they have already made an advance payment.

Cons of Prepaid Booking option for Hotel Owners and Customers

It is seen that when customers have both the options, Pay at hotel as well as Pay Now Available to them, there are very high chances that customers will choose the Pay at Hotel option. Now this means that applying a 'Prepaid Only" restriction results in drop in booking flow. Hotels with such restrictions get less room bookings. The only con that customers have in Prepaid Booking option is that in case of their change in plan or cancellation of trip they might end up paying some or complete amount as cancellation Charges to hotels.