Sell or Buy a Nonrefundable Hotel Room

If you’re stuck with a nonrefundable hotel reservation you find you can’t use, a new start-up, Roomer, will let you recover at least some of the money. And if you’re looking for a good hotel deal, you can buy the seller’s reservation at a discount. That’s an interesting new business model, now up and running.  

Here’s how it works:

• When you’re selling: List your reservation with Roomer, with all the details, and set a price; Roomer posts the deal on its website. When someone buys your reservation, Roomer contacts the hotel and arranges to change the name on the reservation. Roomer pays you 10 days after the checkout date, by PayPal.

• When you’re buying: If Roomer has a listing for the dates you want, you accept a deal and enter your payment details. Roomer takes charge of the transfer, so the hotel is expecting you under your own name. Although your room is prepaid, you’ll have to give your own credit card to cover incidentals.

I asked the Roomer folks to provide some additional details:

Q: Who sets the price?

A: You, the buyer, set a price, but typically Roomer shoots for something around 37 percent off the lowest rate posted on Expedia.

Q: If a room remains unsold close to the reservation date, does Roomer cut the price?

A: Apparently not, although Roomer’s answer to that question was a bit of a circumlocution.

Q: Does Roomer notify buyers if the hotel charges a mandatory “resort” or extra fee that is not included in the prepaid amount?

A: If the original reservation documents notes a fee, Roomer passes that information along to buyers. Otherwise, no.

Q: Will Roomer accept a partial reservation—two days out of a four-day reservation, for example?

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A: No.

Q: Does Roomer have long-term contracts with any hotels or does it negotiate each deal individually?

A: Roomer works with “partner” hotels to the extent that they not only accept the name changes but also actually steer guests to the Roomer site to sell an unused room. Roomer negotiates individually with other hotels; presumably, a few hotels will decline to participate but you’ll know that before you pay.

As of mid-November, Roomer was posting hundreds of deals in dozens of U.S. cities—500 or more each in Florida, Las Vegas, New York City, and San Francisco—plus a very few in a handful of foreign destinations. For December 8 through 10 in New York City, for example, Roomer showed 11 results, ranging from $94 per night at the Seton Hotel to $353 per night at the DoubleTree. For a longer lead time, into January, rates ranged from $93 at the Seton to $350 at the Muse, with lots of attractive properties listed for less than $200. From this quick test I gather than the best deals are for purchase well in advance.

I can’t see much of a downside for either buyer or seller. If you’re selling, you at least get something back on your prepayment; if you’re buying, you get a good deal—sometimes, very good. Of course, it, too, is nonrefundable.

But you do have an alternative. Opaque hotel online travel agencies Hotwire and Priceline automatically offer cancellation insurance when you buy a hotel room. The insurance costs a lot less than you’d lose by selling your room through Roomer, but you have to buy it when you first buy the room, and it restricts cancellation to a list of “covered” reasons—typically medical reasons—and does not pay off if you have to cancel for a reason that isn’t specifically listed in the policy. Roomer, on the other hand, doesn’t care at all about why you need to cancel or when you decide. It’s your money; you decide which way to protect it.

Could this system work with nonrefundable airline tickets? Yes, but only with the few airlines that allow name changes—with a fee, of course. We’ll watch Roomer to see if it tries to add air tickets.

Ed Perkins on Travel is copyright (c) 2013 Tribune Media Services, Inc.

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