Refundable or Not?

We checked 1,812 hotels across six destinations: at 72.8% of them the cheapest rate shown was one that cannot be cancelled.

According to SiteMinder, 19.15% of hotel bookings worldwide were cancelled in 2025 — nearly one in five.

The time between booking and arrival is one of the strongest predictors of cancellation in academic research. The further away the trip, the more flexibility is worth.

Free cancellation is not free: you pay for it up front in a higher rate. The question is not which price is lower, but how much risk you will take on in exchange for the saving.

'Free cancellation' is not one product. What decides its value is exactly how long you can cancel for and what is charged after that.

Before asking what flexibility is worth, it helps to know how often it is even offered at the lowest price.

We ran searches on SherryStay in six destinations — Madrid, Rome, Athens, Bangkok, Lisbon and Prague — for two adults and two nights, in two windows: about a month before arrival and about five months before. For every hotel we took the cheapest rate on offer, and whether it could be cancelled.

Of 1,812 priced hotels, at 1,319 of them — 72.8% — the cheapest rate was non-refundable.

The figure held across both windows: 71.9% a month out, and 73.7% five months out. Because these were two separate measurements on different dates, the agreement between them points to a pattern rather than chance.

The breakdown by destination is telling too. In Athens the cheapest rate was non-refundable at 83% and 84% of hotels, in Prague at 77% and 78%. Bangkok stood out in the opposite direction at just 54% and 52% — there, nearly half of the cheapest prices were flexible.

The meaning is simple: at most hotels, the price that catches your eye first is a price that already includes giving up the option to change your mind. This decision is not only present in every booking — most of the time it is presented to us as the default.

A note on method: the searches were read while pricing was still updating, so the count covers the hotels priced at that moment rather than the full inventory. What was measured is the ratio — and it is the ratio that repeated.

SiteMinder data based on more than 130 million hotel bookings found that the global cancellation rate in 2025 was 19.15% — a slight decline on the year before.

Roughly one booking in five is cancelled. Worth remembering the next time you think 'who actually cancels a hotel?' — plenty of people.

A trip planned months ahead looks very certain on the day you click BOOK. Then life starts: someone gets ill, a date moves, a flight is cancelled, a family event lands in the diary, a better hotel turns up, or you simply change your mind.

From one person's point of view, cancelling is an exception. From the hotel industry's point of view, it is routine.

There is a huge difference between booking a hotel for tomorrow and booking one for next summer.

According to SiteMinder, the average global booking window reached 32.15 days before arrival in 2025.

And academic research on predicting cancellations keeps arriving at the same conclusion: the time between booking and arrival is one of the strongest predictors of whether a booking will be cancelled.

It makes sense. If you are going to Paris next weekend, you already know a lot: the flight exists, the leave is approved, you know who is travelling. Book Japan for next April and you are really betting on the future.

The earlier you book, the more interesting the thing you are buying: today's price and availability, in exchange for more uncertainty about tomorrow. This is where free cancellation starts to have real value.

Not a better room. We paid for flexibility.

The gap between a flexible rate and a non-refundable one varies from hotel to hotel and date to date. Industry sources commonly put the non-refundable discount at around 5% to 15% — but there is no single figure that holds for every booking, so it is worth recalculating every time.

That makes cancellation a product in its own right. On a $1,000 room, 10% is $100 and 15% is $150. On a $5,000 booking, the same 15% is $750.

Suddenly the words 'Free Cancellation' sound a little funny. The cancellation may be free — but the option to have it cost us money.

This is the right way to frame the decision. Not '$1,000 versus $1,120', but: save $120 now, and take on a risk of up to $1,000.

Say you are almost completely sure about the trip: the flight is in five days, the leave is approved, there are no connecting flights, and the hotel is for one night. $120 for flexibility may be too much.

Now the exact same deal, but the hotel is nine months away, the flight is not booked yet, four people are travelling, and the stay is part of a three-week route.

The $120 is still $120. Its value has changed completely.

The chance that something changes does not depend on time alone. It also depends on the number of moving parts.

A couple away for a weekend is a simple system. Five family members, three rooms, two connecting flights, a hire car and a two-week holiday is a different one. Every extra person is another schedule, another chance of illness, another job or school.

Hence a useful rule: the more expensive the booking, the further away it is and the more people it depends on, the more flexibility matters.

This may be the biggest mistake of all. We see the green words and the brain translates them into 'I can cancel'. Not necessarily.

Cancel until when? Until the day of arrival? 24 hours before? 48? Seven days? 14? And what happens after the deadline — the first night charged, 50% of the booking, or 100%? At exactly what time does the policy change, and in which time zone?

A rate you can cancel until 18:00 on the day of arrival is not the same product as one you can only cancel up to two weeks before. So don't read the headline. Read the date.

Reality is not binary either. There is free cancellation until seven days before arrival and one night charged after that; there is partial prepayment; there is a 50% refund; and there are non-refundable rates that still allow a date change under certain conditions.

Sometimes the option in the middle is the best deal. Not the cheapest and not the most flexible, but the one where the price of flexibility matches the risk you are actually taking.

With a non-refundable rate, the hotel is essentially saying: commit now, and I'll lower the price.

The reason is that a hotel room is an odd product. If a shop doesn't sell a pair of shoes today, it can try again tomorrow. If a hotel doesn't sell room 512 for the night of 18 October, that night is gone — it cannot go into a warehouse.

So certainty is worth money. The guest takes on more risk, and gets a lower price in return. It isn't just a discount — it's a trade of risk.

Which is also the opposite reason travellers love free cancellation: it lets you bring a decision forward without fully committing to it.

Found a great hotel in Tokyo nine months ahead? You can hold it. Haven't decided between four nights in Kyoto or six? You can keep an option open. Not sure the trip will happen at all? You can book now and settle the rest later.

This is one of the least discussed advantages of a flexible rate.

Say you booked a room for $1,500 with free cancellation, and a month later the same room on the same dates costs $1,280. If the original booking can still be cancelled, you can sometimes rebook at the new price and only then cancel the old one — and save $220.

With a non-refundable rate that option usually does not exist. So flexibility protects you not only from a bad event, but can let you take advantage of a good one: a price drop.

And the order matters: confirm the new booking first, and only then cancel the old one.

Take three bookings. A $500 hotel whose flexible rate is $540 — you pay $40 to protect $500. A $1,500 hotel at $1,620 flexible — you pay $120 to protect $1,500. A $5,000 family holiday at $5,350 flexible — you pay $350 to keep the option of leaving a deal worth more than five thousand dollars.

Now a different situation: you are already in Barcelona and need a hotel for tomorrow night. The flexible rate is €310 and the non-refundable one €235 — a €75 gap for less than two days of flexibility, when the chance of plans changing is very small.

The closer the arrival and the more certain the trip, the less a high price for flexibility makes sense. A non-refundable rate is not a bad rate. It is simply a rate where you say: I'll take the risk in exchange for the price.

The question worth asking is just one: if I have to cancel, what would hurt more — the extra I pay today, or the money I could lose later?

There is one more thing to check: non-changeable. People assume that if a booking can't be cancelled, the hotel will at least agree to move it by a day. But these are two different things, and a rate can be both non-refundable and non-changeable.

The hotel may agree to help. The supplier may try to find a solution. But 'they might agree' is not a policy. On an expensive booking you need to know in advance: can I cancel, can I change, and what does each one cost?

'Doesn't matter, I've got insurance.' But travel insurance and a flexible rate are completely different products.

A policy may cover cancellation for certain reasons and according to its terms. That does not mean every change of plan qualifies for a refund. You'd rather go somewhere else, you found a better hotel, the price dropped, or you just don't feel like going — none of these are necessarily covered events.

So a non-refundable rate plus insurance does not equal free cancellation. It simply isn't the same thing.

There is no fixed cancellation rate. SiteMinder's 2026 mid-year report, which looked at bookings for stays between June and September across 22 markets, recorded cancellation rates rising compared with the previous year.

In Asia-Pacific the average rise was 0.81 percentage points, in Europe 0.5 percentage points, and in the Americas just 0.1 percentage points.

That doesn't mean 2026 will become the year of cancellations. But it is a reminder that behaviour shifts — by destination, by season and by traveller.

Instead of choosing automatically, check five things:

1. How much money am I actually saving? Not a percentage — an amount.

2. How much money could I lose? There is a difference between $180 and $4,800.

3. How long until the trip? Tomorrow, or nine months away.

4. How many things need to go right for the trip to happen? One person and a direct flight, or a family and a complex route.

5. What exactly does the cancellation policy say? Until which day, what time, and how much is charged afterwards.

These five questions take less than a minute. On a booking worth thousands of dollars, that is probably the minute worth taking.

Before you click non-refundable, imagine that tomorrow morning a message arrives: the trip is off.

Now ask: am I genuinely fine with the money I paid possibly being lost?

If the answer is 'yes, I'm saving a meaningful amount and I'll take the risk' — that's a decision. But if the thought makes you say 'no way, that's $3,000!', the discount may not be as big as it looks.

Today we are used to two lines: $1,000 non-refundable, $1,120 free cancellation.

But there is a better way to present the decision: 'Save $120 and take a non-refundable rate', versus 'Pay $120 more and keep the option to cancel a $1,120 booking until 3 October at 18:00'.

Suddenly you understand what you are buying. Not two more price lines, but saving versus risk. And when at seven hotels in ten the cheap price is the committing one, that is exactly the kind of information a smart hotel engine should help a traveller understand.