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Exchange rate and paying hotel bill early

Exchange rate and paying hotel bill early

Old Jan 25th, 2023, 08:22 AM
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Exchange rate and paying hotel bill early

This may be a silly question, but given the fluctuation of the Euro -> dollar rates, I thought I should ask. I have reserved rooms in Rome, Florence and Venice directly with the hotel property for our trip in June. In each case, the email I received stated that the credit card given only holds the reservation, and that the money owed (as well as the city tax payable in euros) is due upon checkout. Each of these hotels allows for early cancellation up to a few days before arrival.

I am wondering if it is worth paying the hotel via my credit card now, as I somewhat expect that the dollar value may continue to fall before our trip in June. Do hotels accept an early payment if you have not yet checked in, and if you DO pay ahead and later have to cancel, would it be more difficult getting a refund?

I am just wondering if it is possible / better to lock in the current exchange rate now, rather than perhaps paying more by June if the dollar's value continues to fall. Thoughts? Has anyone reserved a room months out only to be surprised upon check out at a greatly increased cost due to a decline in the exchange rate of the dollar?
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Old Jan 25th, 2023, 09:38 AM
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Unless you are an expert in currency trading & speculation it's best to wait.
If you have the money to spend now, put it into a 6mo CD or something and earn a few % points interest....

Nobody can predict the exchange rate 6mo from now.
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Old Jan 25th, 2023, 09:41 AM
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Me personally, I would not pre-pay. Not sure anyone knows how the $:€ rates will fluctuate in the months to come. Even central banks don't have accurate crystal balls. But either way the difference will be pennies/a few $ at the very most. Depends on whether you want to tie up you money now or you prefer to keep your money until then . . .
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Old Jan 25th, 2023, 09:42 AM
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was posting the same time as J62
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Old Jan 25th, 2023, 10:55 AM
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As Janis says the amount you may save will be very small compared to the cost of your trip. And what do you do if you pay now and the dollar rises?
Getting a refund will be trickier and more expensive for everyone.
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Old Jan 25th, 2023, 11:09 AM
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I wouldn’t prepay either. What makes you think the USD will depreciate against the EUR? It could be that the euro will continue to decline as it did in 2022. J.P.Morgan thinks the dollar will hold its value in 2023, but they could be wrong.
https://www.jpmorgan.com/insights/re...ollar-strength
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Old Jan 25th, 2023, 11:56 AM
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Originally Posted by Heimdall
I wouldn’t prepay either. What makes you think the USD will depreciate against the EUR? It could be that the euro will continue to decline as it did in 2022. J.P.Morgan thinks the dollar will hold its value in 2023, but they could be wrong.
https://www.jpmorgan.com/insights/re...ollar-strength
According to XE.com the dollar has fallen against the euro since last year. But who knows what will happen between now and June, and even if we did would be tell anyone or aim to make a "killing" on the market?
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Old Jan 25th, 2023, 12:49 PM
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Paying now, and then trying for a refund could be tricky.

It all about risk vs reward.
Pay now, and you avoid the risk of exchange rates - but if the dollar rises vs the euro, you have lost the opportunity for reward. And you have the very big risk in chasing a refund if you cancel.

Pay on arrival, the only risk is on exchange rates. And the dollar may rise vs the euro, and so there is a possible reward.

Last edited by Peter_S_Aus; Jan 25th, 2023 at 12:52 PM.
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Old Jan 26th, 2023, 10:04 AM
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I think you are nitpicking over minor currency fluctuations that don't have any overall impact. They could just as easily go the other way.

I would never do this and in fact, most hotels offer cheaper rates if you prepay so if you wanted to do that, you would have already, woudln't you? It's often a 5-10 pct discount.

You are creating a lot of trouble for yourself. Hotel's aren't stupid,why would they refund your money when you prepaid if the exchange rate was going to penalize them?
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Old Jan 26th, 2023, 10:11 AM
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Re a refund of any sort . . . ain't going to happen. The hotelier is dealing in € -- s/he charges €, s/he gets €. The fact that x number of € cost you more or less doesn't concern them one way or the other. Exchange rates are a bank/credit card issue and the bank also ain't going to refund an exchange rate difference.

Pre-pay or don't -- that's up to you. But don't do it if you are really just chasing a better exchange.
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Old Jan 26th, 2023, 11:10 AM
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If you are convinced that the dollar is going to depreciate against the Euro or whatever you could just buy that currency now for the amount you want. Alternatively buy something like a currency ETF.
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Old Jan 26th, 2023, 08:24 PM
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Prepayment usually means a lower booking rate. If you've booked a room that allows cancelation you're paying more than the currency fluctuation.

I wouldn't prepay unless you think there is zero chance of a cancelation for ANY reason. Flight change. Change of mind. Finding a better deal/hotel/location.
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Old Jan 26th, 2023, 10:56 PM
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If you feel that the US$ against the € then this would affect all of your spending then the easier way to lock in what you perceive to be the higher $ rate, would be to get a prepaid travel debit card and load that up with enough € to cover what you think you are likely to spend on food , travel and accommodation on your trip. FX fees tend to be lower than those on the average debit or credit card. When we were travelling full time I had a number of such cards denominated in £, $ and € and just topped them up whenever I felt the exchange rates were advantageous.

In reality, unless you are spending a fortune on high end hotels and/or the US$ takes a major nosedive, I would question whether it is worth the effort.
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