Why I’m Only Booking Cancelable Travel Reservations This Summer

Last summer, I traveled to Italy for a family wedding. The bride and groom had their connecting flight canceled and got rerouted to land in a different city. One of my sisters and her family were delayed by two days because their first flight was canceled. Somehow, we all magically made it to Tuscany in time for the wedding. The next morning my partner tested positive for COVID. I tested negative and changed my flight to go home immediately. We had planned a whole romantic trip to Milan after the wedding, and none of it happened. I’ll spare you the details of the rental car that broke down and the extra time my partner spent in Italy alone, holed up in a hotel room, until testing negative. At least the wedding day went according to plan.

You may recall that the 2021 post-vaccine “hot vax summer(Opens in a new window)” some of us were hoping for didn’t materialize. For many, 2022 was a flop as well for various reasons: COVID surges, airline staff shortages, and 35,000 flights being canceled or delayed(Opens in a new window) in a single long weekend in June alone. And let’s not forget about those special charter flights that schlepped mountains of lost luggage(Opens in a new window) to their destinations weeks late.

If you’re making travel plans for June, July, or August 2023, you have to be a real optimist to believe this year will be a cakewalk. One of the best ways to guard yourself from at least losing money if your holiday goes awry is to book reservations that can be cancelled or changed, even if it costs a little more to do so.

Spend $30 to Not Gamble on $1,045

The upcoming time off I have planned doesn’t involve flights (that’s intentional), but it does include two rental car reservations and some time in New England towns that have huge tourist seasons. Booking early isn’t just recommended; it’s essential.

The number-one consideration in all my bookings is whether I can cancel it at least a few days before the reservation with little to no penalty. “Penalty” is a misleading word here, because you do indeed end up paying more for the pleasure of being able to cancel. For a three-night stay at a Hilton property in highly desirable Burlington, Vermont, for example, it costs about $30 more to be able to cancel. Ten bucks extra per night isn’t bad, especially if it’s split between two people, but that’s never how it looks in any travel app. It always looks like you’re passing up a sweet deal. That’s by design.

When you see the side-by-side comparisons of your options, it is tempting to take the lowest offer. Why would you pay $30 more when you don’t have to?

The other way to look at it is to say you’re paying $10 more per night to avoid taking a gamble on losing $1,045. Don’t let the comparison price display play tricks on you.

(Credit: Hilton)

Consider the Interest You Can Earn If You Pay More to Pay Later

There’s another reason not to always take the best price. The lowest rate for accommodations and rental cars usually requires you to pay upfront. In other words, the money gets charged to your credit card or leaves your account now rather than when you check out of a hotel or drop off a rental car. If you’re planning and booking three or four months in advance, that means you lose out on whatever interest you would have gained on that money had you kept it in an interest-bearing account. 

That might not be a lot of money, but if you have a high-yield savings account and your trip total comes to, say, $3,000 to $4,000, your interest could be in the neighborhood of tens of dollars…which may be close to the price difference between booking that cancelable reservation instead of the non-cancelable one.

Look for Change Fees

Flights are different. You typically pay in advance no matter which fare type you choose. 

Regardless, pay attention to the change fee or cancellation terms for your fare type. The lowest fares are often nonrefundable and usually the change fees aren’t listed clearly (you have to hunt for them on the airline’s website or call a customer service rep). If you have even a shred of uncertainty about your plans (and I argue we all should in 2023), I highly recommend paying a little extra for a ticket that you can change either for free or for a low and clearly stated fee.

If you’ve never had to call an airline in a panic because something totally unexpected happened and you need to change your flight right now, let me assure you the experience is much worse when you suddenly learn you have to pay another $200 on top of the fare difference. When your nerves are already fried, that kind of news doesn’t help matters.

Prepare Yourself to Spend

Years ago, I read some great financial travel advice that said to think about your budget, especially for accommodations, before you even look at options. That way you don’t convince yourself to take the cheapest hotel room and end up unhappy with it. Spending a little more on a nicer place to stay in a great location is often worth it in terms of how happy you’ll feel about your trip.

Let’s say you know a decent hotel during the high season where you want to go costs $350 to $400 per night. (Sticker shock, right? If you’re not willing to pay those prices, you might consider going during shoulder season instead.) You set your total accommodations budget for five nights at $2,000. That’s your upper limit. Now when you look at options, you can steer yourself toward that number and lower rather than look for the cheapest acceptable room.

Likewise, if you mentally prepare with a budget first, you can look for options that meet not only your number but also your other requirements, like including a cancellation agreement, an onsite pool, and so forth.

Budget for Junk Fees

Travel websites and apps can mislead you, intentionally, about the price of your flight, hotel, rental car, Airbnb reservation, and what have you. How often do you see a low price that makes you click through, and then a much higher price upon checkout? 

Hotels now often tack on mandatory local taxes and fees, “resort fees,” and other junk fees(Opens in a new window) that they don’t include when first luring you in. Rental car companies in some states or countries may tell you that a particular type of insurance is mandatory to add on. Airbnb at least now has a setting you can enable to change the price comparison to include all fees, like those sometimes hefty cleaning fees.

(Credit: Airbnb)

Prepare for the Worst, Hope for the Best

This year, the US doesn’t have any COVID testing requirements for travel, as it did for part of 2022. Airlines seem to be doing better with staffing. Hurricane season is still a few months away. And yet, I am extremely wary of everything that could go wrong or simply change to get in the way of my holiday plans. A few years ago, for example, I got sidetracked from some planned time off by the death of an elderly grandparent. You never know what’s going to happen. 

In light of the travel turmoil of recent years, plus all the unexpected hitches that life throws at us, I highly recommend budgeting for and paying for a decent cancellation policy for all of your travel reservations. Paying a little more can save you the pain of losing hundreds of dollars later.