Small StepsI confess, I used to be a “book-it-now-and-figure-it-out-later” kind of traveler. Snagging hotels with free cancellation seemed like a genius move, allowing me to compare options and snag the best deal. But here’s the harsh reality: free hotel cancellation doesn’t always mean free. This past year, my “brilliant” strategy cost me around $100 thanks to hidden currency conversion fees.
You might’ve heard it’s best to pay in the local currency when traveling. For hotels? Don’t. Sure, you might get a full refund, but the exchange rate used for that refund often differs from the one at booking. Guess what? In my case, it never worked in my favor, even when I canceled within minutes of making the booking. How is that even possible?
Booking.com assured me they “gave a full refund” and had no control over the rates. But I feel like something fishy was going on. Every single cancellation meant losing money, despite theoretical possibilities of breaking even or even gaining if it’s based on exchange rates. And the rates used didn’t matched online quotes for that same day. I imagine there were hidden fees I didn’t know of. But no one could give me an answer.
Here’s the lesson learned (the hard way):
- Free hotel cancellation doesn’t always mean free: Factor in potential currency conversion losses, especially for international bookings.
- Don’t blindly trust advertised rates: Research and understand how exchange rates are applied in your specific case.
- Consider the hassle factor: Chasing down discrepancies and fighting for fair refunds can be time-consuming and stressful.
Free Hotel Cancellation – Hidden Fees and Conversions:
- Foreign Transaction Fees: Your bank or credit card company might charge a foreign transaction fee (typically 1-3%) on both the initial payment and the refunded amount, effectively eating into your savings.
- Currency Conversion Fluctuations: If you pay in the local currency, the hotel might convert your refund back to your home currency using their own exchange rate, which might be less favorable than the rate you initially paid. This could mean losing a small amount on the transaction.
- Potential Processing Fees: Some hotels, even with “free hotel cancellation”, might deduct processing fees or hold cancellation charges when using local currency, negating the supposed benefit.
My Recommendations:
- Book with free cancellation in your home currency: Eliminates foreign transaction fees and conversion confusion.
- Compare total costs carefully: Analyze the total cost, including potential fees, when comparing local currency payments with your home currency, even with free cancellation. Here is an example cancellation policy with booking.com
Remember, it’s all about weighing risk and priorities. Saving a few bucks might lead to unexpected headaches. But hey, thanks to my mistake, you don’t have to repeat it! For more posts on my realities while traveling, check out The Reality of the Amalfi Coast.
