Hey, folks. If you are using Agoda to make your hotel booking, are you aware that you may be charged more if you choose the Agoda Pay Later option? Read on and I’ll share with you my recent experience and how you can avoid such unexpected charges.
This is a public service announcement as I did not intend to churn out any post just before a trip – I have too many Travel To-do items to clear. Hope this post will help someone save some money when planning their travel.
History: I’ve been a fan of Agoda since eons ago
I have been with Agoda for many years, probably even before they became this popular. Their platform has consistently produced lower prices when compared to other hotel booking portals.
However, since 2017, I found myself having to deal with a premium charge of about 7% compared to the price that was shown to me during booking. This puzzled me as I have always been using the “Free Cancellation” option. And it had never created a price variance that would cause me to sit up, let alone to write a blog post on it.
7% in hotel fees isn’t exactly a negligible cost when we are talking about hundreds of dollars in payment per transaction.
Not easy to know I was charged more by Agoda
As someone who is into finance and investment, I do keep a record of my expenditure. If I didn’t, I honestly wouldn’t have noticed the price variance charged by Agoda between “Booking Date” and “Charged date”.
By the time my card was charged (weeks or months later), my memory had failed me as to the amount presented during booking confirmation. I tried using Agoda’s portal to trace my bookings, but could no longer see the “Old Price”. I could only see one price, i.e. the new (and higher) price that they charged to my card.
When the old price was no longer viewable, there’s no easy way to know that I was paying more. Luckily, I’d manually recorded the price in my Travel excel sheet when making the booking.
An example to help you visualize the scenario
This is an example to help you visualize the scenario.
- On 8 January, the booking was confirmed at S$500 using ‘Free Cancellation, Pay Later’ option
- On 22 January, S$535 was charged to credit card – that’s $35 more than what consumer had agreed to
- Customer’s Booking history now only reflects $535. He can no longer see the $500 that he had earlier agreed to.
- He may not be able to recall or verify that there was indeed a $35 premium to the new price
Why Agoda charged me 7% more than the price shown during booking?
After noticing the 7% premium charged to my card, I gave Agoda a call. Here’s why I was charged more and how you could avoid facing a similar situation.
Agoda’s representative told me that it was because I had chosen Free Cancellation, Pay Later option which was open to currency fluctuation. I fully understand because when I’d decided to take up that option, I was prepared for currency variance, but didn’t anticipate a 7% fluctuation within two weeks.
I would have bought his argument if I wasn’t attuned to finance or investment. “But JPY-SGD only fluctuated within a 1% band. Why did Agoda charge me 7% more?”, I asked the local representative.
For those who are into investment, you would know how the Japanese Yen is a stable currency which many buy into when hedging their position.
Reason No. 1 offered by Agoda Rep
The patient Agoda representative then explained that the rate I saw online was the wholesale currency rate. Actual rates used by organizations and banks would be less attractive. Well, of course, I understood this concept.
So I added further, “Yes, I’d used wholesale prices 2 weeks ago to compare against forex wholesale prices of today. It’s within a 1% variation.”
Reason No. 2 offered by Agoda Rep
He then explained that banks could charge more on their end resulting in a higher fee. This didn’t seem like a valid explanation to me because I would be charged by bank whether I opt for same-day payment or Pay Later option. In either case, banks need to earn – so this is a constant to me.
“Do you mean the bank would charge me less if I’d chosen the “Pay Now” option?”
Reason No. 3 offered by Agoda Rep
Obviously, he couldn’t continue this reasoning with me based on logic because I think he knew deep down that I was charged more than what I should have been charged for.
He replied, “I can only share that there is overhead costs when you choose to Pay Later.”
What he said above was very vague, but I think he might not be in a position to share too much. As a consumer, I can only interpret this as a confirmation that Agoda charged more than the currency fluctuation to compensate for the additional resources required to provide this Pay Later option. However, to a consumer, we weren’t told we would need to pay anything more than actual currency variance. So this, in my opinion, isn’t fair to consumers.
I didn’t say much thereafter and was surprised when he volunteered to give me a refund of the nett difference. But he made me agree that this was a one-off concession.
How do you avoid being charged a premium?
Does it mean you will be charged a premium whenever you choose a Free Cancellation booking option at Agoda?
It depends. If you choose a Free Cancellation, Pay Later option, you would likely be paying more (quoting what the Agoda customer representative told me). Based on my experience, it’s about 7 times more than the actual currency fluctuation. This happened to my last two bookings (Phuket and Japan) since 2017.
The way to get the price you see during booking while still enjoying free cancellation is to opt to PAY NOW instead of PAY LATER.
What does ‘Free Cancellation, Pay Now’ option mean?
Even if you choose to PAY NOW, you can still enjoy free cancellation. That would help to lock in the price as promised by Agoda.
One thing remains unclear – if I cancel later, will I receive a refund of the actual amount deducted or those subject to Agoda’s currency rate (which doesn’t seem attractive). That is, will I receive $100 or $93 (7% less)?
In a Nut Shell, avoid using Agoda Pay Later option
Things seem to have changed because I didn’t experience such wide price swing previously with Agoda. If you are firm on your hotel decision, it may be cheaper to choose either Book Now, or Free Cancellation > Pay Now.
Will I continue to use Agoda?
Yes, as long as Agoda offers me the best price as compared to other booking portals. So far, Agoda seems to be able to beat the market. I just have to be very careful when confirming the booking. I will refrain from selecting “Pay Later” option in future.
If I am not at the stage of committing to the hotel and prefer some flexibility, I may book using other booking portals, such as Booking.com.
Am I happy with Agoda?
I think things can be spelled out clearer to prevent any misinterpretation or misrepresentation. When a hotel portal advertises “Free Cancellation: book risk-free and lock in this great price today”, it isn’t clear that this ‘price lock-in feature’ would be void if a customer chooses to pay later.
Furthermore, is there a need to charge 7% more when actual currency fluctuation is just a fraction of that (1%)? I did not receive a clear explanation on this.
There is certainly room for improvement! Or perhaps the fault lies with me getting way too comfortable with Agoda, having used it for many years without any problem. Maybe whatever happened was indicated in some fine prints that I’d missed? Did you notice something written about this in Agoda’s fine prints? Do you read fine prints? Do most customers read full terms and conditions? ;)
For curiosity sake, I just skimped through that whole page of T&C and didn’t find anything relevant.
Hope this post that I churned out in a hurry would help you save some money. Share this post with your family and friends to help them too (share button on the left or bottom of this article). Chat soon and see ya!
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