If You’re Booking A Hotel Room At Prepaid Rate, Be Sure To Read The Fine Print

If you’ve booked a room directly through a hotel chain’s website, you’ve more than likely seen lower-cost options for visitors who agree to prepay for at least some of their stay. Before you choose that cheaper room, make sure you know what you’re agreeing to so that you don’t end up on the hook for hundreds of dollars later if you have to make a change.

USA Today’s Linda Burbank has the story of a family that ended up paying more than $550 for hotel rooms they didn’t use because they booked rooms without fully understanding the prepaid cancellation policy — and because the folks at Starwood allegedly gave them the worst possible advice.

The family had booked rooms through the Starwood Preferred Guest (SPG) program for a Sheraton hotel in Italy. Initially, they believed they needed four rooms, but plans changed and they later realized they would only need two rooms.

They contacted SPG to review their options. That’s when, according to the family, the SPG rep told them the best thing they could do was to go online and cancel that original 4-room reservation, then rebook for just the two rooms they needed.

Fast forward to the family’s arrival at the hotel in Italy, where they find out that there are actually six rooms under their name, and there was nothing the hotel could do about it.

“I called SPG and got the same response in reverse,” explains the dad to Burbank. “They said that SPG only facilitates reservations, and it is up to the individual hotels to decide whether to refund or issue credit where there are problems with reservations. They also said that although prepaid reservations can be canceled online, ‘cancellation’ in this case means a forfeiture of any payments made.”

Horrible as it may sound, Burbank found that SPG was actually correct in this case.

The room rate that the family booked for this hotel included a stipulation that canceling the reservation at any time results in forfeiting the payment for the first night. Thus, the family paid around $560 for four rooms they didn’t need or use.

Burbank notes that these conditions were spelled out in the confirmation emails sent to the family, and that this hotel appears to have rooms that are around $10/night more without these same restrictions. Paying that slightly higher price would have saved the family money in the long run.

We looked at room rates for this hotel for a random one-night stay in August, and found the most affordable prepaid rate was 20 Euros (around $22) less expensive per night than the rate that included a more generous cancellation policy:

Of course, what would have also saved them a lot of money is good advice from SPG. According to the family, the rep made no attempt to alert them to the fact that canceling the original four rooms would be a pointless endeavor. If their account of the call is accurate — it’s impossible to say, as SPG claims to not have a recording — the rep should have advised them that they were stuck having to pay for the two unused rooms, but that would only be about a $280 loss, compared to the $560 waste of money they ended up with.

In the end, after being contacted by USA Today, SPG said it would give the family 14,000 points to make up for the apparent customer service gaffe.

Of course, the hotel operator still maintains that travelers need to pay attention to the fine print before booking.

“Guests should pay attention to the deposit/cancellation terms, particularly when booking online, where we publish our best but highly restricted rates,” a Starwood rep tells USA Today.