Non-refundable rates. Risky?

$100 is pocket change in comparison to the cost of European trip. Can you not find lodging at a reputable hotel/B&B that has some history and great feedback?

If you paid for the nonrefundable hotel with a credit card and the hotel abruptly closes up shop - all you have to do is contest the charge on your credit card and that's that. Not a big deal.

I always try to reserve with a free cancellation option, since I book far ahead.

I also always try to hold the reservation with my Amex card, even though I pay at checkout with Visa or MasterCard (no foreign transaction fees), because in my experience Amex has the best customer service protection.

Check w/ the provider of your trip insurance, but I'm almost positive financial default would be a covered reason.....unless, for example, they are on an exclusion list. If you buy your insurance thru TravelGuard, their exclusions are posted on their web site (click on the customer service tab, where you will find the Alert list (as well as the Strike list). While it would be highly unusual to find an individual hotel listed on their exclusion list, the list demonstrates that there is some coverage for financial default......but, again, do double-check to make sure that an individual hotel would be covered, and not just tour operators and airlines going into default. I'd be curious what you find out.

Since you mention the hotel is new, that can be both good and bad from the risk point of view. Would they be over leveraged financially? Less experienced? Are they asking for a cash payment, or are they set up for credit cards? If they are not set up for credit card payments, that could indicate a bank was not comfortable entering into a merchant agreement with them (or they just don't want the extra expense of the merchant fees).

And, as someone else already posted, I think there might be ability for you to file a dispute with your credit card provider, if you showed up for your reservation and the place was not open, but do check w/ the credit card provider to make sure financial default of the hotel would not slow the claim for any strange reason.

But, I always say: Follow your gut feel. If something just seems the slightest bit off or makes you uneasy, make a different choice. No sense in adding worry.

Assuming you pay/reserve with a credit card, you don't even have to worry about your insurance. Your credit card issuer would just reverse the charge if the hotel closed up shop.

If you are staying at an actual hotel - and not a short-term rental apartment or "B&B" - there is very little chance of the hotel closing up shop in Paris.

The last incidence of a hotel closing was a few years ago. It was frankly, a flea-bag hotel which had been condemned to be torn down. Squatters were still there, paying for the rooms when the City's trucks started to demolish it.
The owners were arrested, and the people living in this hotel were sent to City shelters.

But you won't have that problem in Paris.

You should read the fine print in your insurance contract to be certain that you would be protected in the highly unlikely event the hotel did close.
If the hotel were to close, there would be long years of legal issues, and you might never see your money.

However, if you plan to rent a short-term rental apartment or "B&B", you could well find yourself faced with a last-minute cancellation. You'd receive a refund at some point, but would have to find other accommodations by yourself.

I think people are a little nervous when paying for a non-refundable room rate. Most hotels do offer these, but if you haven't already booked yet, you might look for another hotel which allows you to cancel 1 or 2 days before, with no penalty. There are many of them on www.booking.com

No, I think the risk you identified is so infinitesimal that's it's not even worth thinking about. Your credit card will come to your rescue if you receive zero service for the non-refundable rate (you will just need to contest the charge). Obviously it's better to have more flexibility than less, but non-refundable rates come with a nice cost savings trade-off that works well for many people. Think about every airfare you've gotten that's non-refundable - if you don't question every single instance of airfare purchases, then you shouldn't worry too much about the hotel. Unless there is sufficient reason to worry about the hotel's finances, why worry?

Thanks all! I have good "gut" feelings about this place and they have had fabulous customer service so far. I decided to book with the free-cancellation rate and inquired if it would be possible to change to non-refundable when our trip gets closer. The manager completely understood our hesitation to pay so far in advance for October and was kind enough to extend the offer of letting us change the rate to non-refundable when it gets closer to our departure, which will be an extra 10% off rate! I am absolutely elated at the generous offer and have a feeling that they will be winning a Paris hotel customer for life :) the customer service via email has been very impressive.

On the subject of a credit card giving you a refund - I had no idea you could ask for a refund on funds withdrawn months after the fact. I had assumed there would be a time limit of sorts. I did call my cc to confirm details. She said that in the unlikely event that this would happen, they would start a process to attempt to get our money back. But no guarantee of success. So perhaps this all depends on your card holder.

I made a really bad call booking a hotel room in Croatia with a consolidator I wasn't familiar with. The consolidator ended up folding, going bankrupt, and it was a real fiasco because all the bookings using this consolidator were scrapped (for everyone). I am lucky in that my credit card comes from a Credit Union with whom I have a long relationship. They reversed the charges (in the form of pre-paid bookings) the day I notified them and provided proof of my hotel cancellations. I don't know how vigorously they pursued the consolidator to get reimbursed (for reimbursing me) - if they did, they were in for a very long wait because bankruptcy proceedings take a long time and then there is a hierarchy about who gets paid first, second, etc.. I was very lucky my Credit Union put me "first". My only pain was having to scramble to get the hotel rooms rebooked, but no money was lost in the end. Some credit cards expressly provide travel protections but you have to read the small print to see what they do or do not cover.