Expedia’s pay at hotel or pay online now program provides new choices

There are now 3,000 hotels on Expedia and Hotels.com websites that give guests a choice: “pay at the hotel or pay today.”

Until now you only had one choice when booking a hotel on these Expedia sites, and in most cases, you saw your credit card get charged right away and had to pay up-front. Even when prepayment was taken though, Expedia would refund the money if you cancelled in time, per the hotel’s cancellation policy.I

But, faced with increasing competition around the world from sites such as Priceline’s Booking.com, which enables guests to reserve a room and pay at the hotel, Expedia is offering customers more options.

With the Expedia Travelers Preference program, as it is called, Expedia is giving customers both options.

So far 13,000 hotels, or a little more than 8% of the 160,000 properties being sold on Expedia Inc.’s global sites, have signed up for the program, but the number will climb. Most of the participating properties are from chains, including Marriott International, Hilton Worldwide, La Quinta in the U.S., and Barcelo Hotels in Spain. Independent hotels are participating, too, but chain hotels are dominating so far.

When consumers begin the booking process on Expedia.com or Hotels.com for a participating hotel, they’ll see a green button, indicating “Pay at hotel or pay today.” And, surprisingly, with some exceptions, the “pay at hotel” option appears to be the smarter choice.

In the above screenshot for a November 13 stay at the Crystal City Marriott at Reagan National Airport, the base rate is $239 using either pay now or pay at the hotel, but you’d end up paying an extra $2.40 for a total rate of $265.30 if you prepay with Expedia. Paying at the hotel would cost you $262.90.

The extra couple of bucks is part of Expedia’s booking fee, which is hidden in the “taxes and fees” portion of your bill. Without much transparency, Expedia tips you off to the discrepancy, saying cryptically, “Taxes and fees can vary between these two payment options.”

Expedia lays out your booking choices like this:

In both scenarios, you can cancel the room without penalty up to the hotel’s cancellation deadline without penalty.

In other words, although you are paying Expedia up-front when you book through Expedia, the prepayment would be refunded if you cancel prior to the hotel’s cancellation deadline.

Still, the pay at the hotel option seems like the best option most of the time. It’s cheaper, you wouldn’t have to wait for a refund from Expedia if you cancel, and the hotel likely would be more likely to award you points if you are a member of the hotel loyalty program.

And, it’s unclear whether sometimes the room payments would be nonrefundable when prepaying through Expedia.

One of the few reasons to “pay online now” is that Expedia allows customers to use Expedia coupons from its travel deals e-mails, if you subscribe, and Expedia doesn’t honor them when paying at the hotel. Another reason to prepay, if booking a hotel in a foreign country, is that you can pay in local currency rather than the hotel’s currency.

ETP, which is only a couple of months old, is highlighting a cultural divide: Expedia says Americans tend to select the prepay option most frequently while Europeans are following traditional practices in their own countries and choosing the pay at the hotel option.

Expedia claims hotels signing up for the program are getting more bookings, and customers are booking longer stays than the previous prepay-only choice.