Why Booking A Cheaper Hotel Could Cost You In The Long Run

If you're a shoestring traveler planning your next escape, you might think the best way to stick to a tight budget is by reserving the lowest-priced accommodation. In fact, most booking platforms have filters that allow you to search for exactly that. However, this kind of mentality can be counterproductive. There are, of course, several factors that go into a hotel's pricing. But beyond typically providing you with a much less comfortable stay, the cheapest hotels could end up costing more in the long run.

Firstly, it's obvious that you'll pay a premium for a central location. If you want to be in Times Square or right in the center of Paris with an enviable view of the Eiffel Tower, then expect to dish out a pretty penny. But the lowest-priced stays might not just be outside of the center — they may potentially be outside of the city itself, or in less-than-savory neighborhoods. Being based downtown allows you to walk to many attractions — whereas the cost of public transportation, which can be exorbitant in certain cities, adds up if you're using it daily.

Furthermore, much like no-frills airlines, these places may tack on additional costs that bring up the base price significantly. These extra hotel fees guests should be aware of can sometimes go well beyond the standard city tax — they can include resort fees (even if you're not actually staying at a resort), mini-bar charges, and parking expenses, among others. But travelers rejoice: As of May 2025, a Federal Trade Commission (FTC) ruling came into effect that addresses "bait-and-switch pricing." So, in practical terms, this rule change means no more hidden fees when booking a hotel — you'll be able to clearly see the extra charges, along with the total cost, before you commit.

Another factor that can seemingly make a hotel cheaper, and that is probably attractive to the budget traveler, is the non-refundable room. Usually, full payment is required at the time of booking, and the guest forfeits the opportunity to request a refund, regardless of the circumstances. Often, this is one of the lowest-priced options on both hotel sites and third-party platforms, at an average of 10 to 25% less than standard rates. And it can be seen as a win-win: Hotels receive guaranteed income while guests save money.

However, there's a reason why these rooms cost significantly less. You are taking a risk, gambling on the hope that nothing will go wrong in the future. And while you may be personally committed to your travel schedule and confident that you won't cancel, life may throw a wrench your way — an unexpected illness, death in the family, hazardous weather conditions, or another misfortune — that forces you to change your plans last-minute. So, although you might have saved $60 on the standard rate upon booking your week-long stay, you could instead lose $500 in the end if you're not able to get there.

No matter what kind of rate and hotel you select, it's integral to read the terms and conditions before you pay. Even if you haven't specifically booked a non-refundable room, some hotels have less generous or inflexible policies, with cancellation deadlines days or even weeks in advance of arrival. And while certain places may make exceptions to their rules, providing guests with vouchers for future stays, they are not legally obligated to do so, and this shouldn't be expected. Therefore, if you decide to go with only non-refundable rooms, keep in mind that it could cost you more down the line.

When searching for the ideal place to rest your head, it's essential to consider the types of facilities your hotel has and which ones are important to you, too. If getting in a morning workout is part of your routine, even while traveling, then having a fully-equipped on-site gym could save you money that you'd otherwise spend on day passes. Or if you'd love nothing more than to wind down in refreshingly cool waters after a long, hot day of outdoor exploration, then you might find that a place with a swimming pool is worth a few extra dollars.

And beyond the obvious and aforementioned financial burdens of an ultra-budget stay, taking the lowest-priced option can come with other "costs." You might be in a loud, party neighborhood, inside a room with thin walls, and waking up every morning exhausted from poor sleep. Perhaps you find yourself wasting several hours of your day on the bus to get to the attractions you'd like to visit, due to your hotel's remote location. Or maybe buses stop running to your area at night, and in the end, you need to splurge on taxis or rideshare services to get back home. To avoid these situations, ensure that you read reviews in advance and note red flags such as excessive noise, unsafe neighborhoods, and lack of public transportation.

Ultimately, though, the hotel you choose should depend on a number of factors: what activities you plan to do (and where they are), how good the transportation network is, and more. Before reserving, you should also be aware of which comforts you need and which you can forego. Then, make your final decision — but don't let price be the sole determinant, as this is one of the most common mistakes you'll want to avoid while booking a hotel.