What is the meaning / definition of Prepaid Rate in the industry?

The term Prepaid Rate, refers to paying for the at a hotel in full at the time of booking, rather than at arrival or departure from the hotel. Paying the prepaid rate generally can come with large price reductions from 10% to 25% off the BAR (Best Available Rate) – which can lead to large cost savings if you plan ahead.

To receive a prepaid rate in general you have to book early, approximately 3 days in advance. The only downside of the Prepaid Rate is, that it is not flexible – meaning that cancellations will result in a fee, sometimes even in not receiving anything back from your original reservation. It is also not able to change the date or adjust the booking, after having received the prepaid rate. Further conditions might apply depending on the hotel.

If the guest does not show up for the original reservation date, the reservation will in general be cancelled without the ability of receiving a refund or credit for the future.

In general a pre-paid rate is separate from other promotional rates and therefore cannot be combined in order to receive a greater discount. Some days may not even allow a prepaid rate, due to the fact that the hotelier in such high that most rooms sell at higher rates than the prepaid rate – such days are called Black Out days.

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