The Reinvention of Non-Refundable Rates: Flexibility Without Losing Profitability

Non-Refundable Rates (NRF) are regaining the prominence they lost during the pandemic. According to data from our clients, so far in 2025, 24.6% of direct bookings have been made under this model. But what’s most interesting about this trend isn’t just the volume — it’s how this model has evolved to adapt to the industry’s changing needs.

What was once known as the traditional NRF rate —a lower price in exchange for 100% prepayment with no refunds— has transformed into more flexible formats, aligned with current traveler expectations. Hotels offering these rates through their direct channel have discovered that rigidity is no longer essential to secure early bookings or improve cash flow.

At Paraty Tech, we’ve developed and identified several Non-Refundable Rate formats that are making a significant impact on direct channel conversion.

1. Non-Refundable Rate with Date Change Option

This variant adds value to the traditional NRF rate, improving customer perception when booking. Now, in case of an unforeseen event, guests can modify their stay dates without losing their booking (or their money), unlike the classic non-refundable model.

How does it work?

• The guest prepays the total amount to access the benefits of a traditional NRF rate.
• However, if an unexpected situation arises, they can change their stay dates within the deadline set by the hotel to protect occupancy (a model widely used by airlines, often for a small extra fee).
• If the new stay is more expensive, the guest pays the difference; if it’s cheaper, no refund applies.

Interestingly, fewer than 1% of guests actually modify their booking dates. Still, simply offering the option eliminates one of the biggest barriers to conversion: the fear of losing money or the booking itself.

2. Non-Refundable Rate with Split Payment

Advances in payment gateways and tokenization have opened new opportunities for the direct channel. Thanks to Paraty E-Payments, hotels can now offer automated, secure Non-Refundable Rates with split payments.

How does it work?

• The guest pays an initial percentage at the time of booking (e.g., 30%).
• The remaining payments are automatically executed according to the hotel’s payment rules (e.g., two months before arrival).
• The entire process is tokenized and requires no manual intervention from the hotel.

“This model is particularly appealing in the UK market, where travelers are used to paying for their holidays in installments rather than having the full amount saved upfront”, explains Valdas Tverijonas, Director of Global Accounts at Paraty Tech.

Additionally, split-payment NRFs are ideal for encouraging longer stays and boosting conversion during high season, when room rates are higher.

Bringing the Tour Operator Model to the Direct Channel

For decades, tour operators have worked with split-payment systems. Now, thanks to our technology and Paraty E-Payments, hotels can offer the same flexibility directly —without intermediaries and with full control over the process.

Some properties are even integrating specialized payment gateways like Scalapay, incorporating split payments as a distinctive feature within their direct sales strategy.

3. Non-Refundable Rate with Cancellation Insurance

This variant allows guests to recover the money paid for their stay if they cannot travel due to specific circumstances: serious illness, accident, job loss, court summons, urgent medical tests, among more than 20 covered reasons.

This model usually requires integration with specialized insurance platforms, such as FlexMyRoom. Although it slightly increases the final price (usually paid by the guest), it’s particularly appealing for certain traveler profiles — older guests, those with medical conditions, or those visiting destinations with uncertain health or political conditions — as it provides peace of mind when booking in advance.

4. Resellable Non-Refundable Rate: The Next Step in Flexibility

The resellable NRF is the latest evolution of Non-Refundable Rates — a model already showing excellent results in markets like Italy. Through integrations with platforms such as Trip Resale, a new concept enters the direct sales ecosystem: the possibility of reselling a confirmed reservation to another traveler, creating a genuine secondary market for hotel stays.

The property defines the advance period during which resale is allowed, retaining full control and visibility of the process. The reservation maintains its original conditions (dates, room type, board), and the hotel can even repurchase it if demand is high — increasing revenue by being able to resell that room again.

Although this model is still emerging in many markets, the resellable NRF offers an innovative way to bring flexibility to Non-Refundable Rates and maximize direct channel revenue without losing operational control.

Strengthening the Direct Channel

The evolution of Non-Refundable Rates mirrors the broader changes in the hospitality industry. Competition is no longer just about price — it’s about the value and flexibility each channel offers.

At Paraty Tech, we continue to innovate to ensure that hotels have the technology, automation, and payment solutions they need to make their direct booking channel the traveler’s first choice.