Should My Company Prepay or Pay Later at the Hotel?

This is a very interesting question with a number of nuances that are often overlooked. The obvious answer is to always choose the cheapest rates, right? Not always. Let me explain…

Companies often prepay because the price is slightly cheaper; let me illustrate with an example of why the cheapest rate is not necessarily the cheapest option for your company.

Consider this scenario: Mary logs into her favorite Online Travel Agent (OTA), searches for hotels in London, selects a 4-star hotel near her conference venue, and is presented with 2 prices for exactly the same room:

Pay now = $100

Pay later = $110

On first glance, this is a no-brainer, but what if Mary knew that her company could claim back 20% VAT on business travel to London? That is a $22 dollar saving equating to an effective price of $88, way cheaper than the prepaid option.

Why can’t companies claim back VAT on “pay now” invoices?

The reason is that VAT invoices are only valid for reclaim when the invoice includes VAT. When companies prepay, the invoice is created by the Online Travel Agent with zero VAT, and when companies pay later, the invoice is from the hotel, which includes the VAT amount.

The toughest part of reclaiming VAT is ensuring that the invoices are perfectly compliant. This can be a real headache — especially when Mary is focusing on delivering a killer presentation at the conference.

Voyya is the only corporate travel platform in the world that ensures clients get a perfectly VAT reclaimable invoice which is automatically uploaded to your company. Better still, we can link you up with one of our preferred VAT partners to get your 20% back when you pay later at the hotel. It’s savings and convenience all round. Sign up with Voyya today to experience the world of business travel savings from your desktop.