The hotel industry’s next big challenge is to offer a service that supports guests throughout their journey - from inspiration, booking and payment, to transfers, check-in, stay and departure.
NB: This is a viewpoint by Thomas Heldorff, VP travel and airlines, global eCommerce at Worldpay.
A customer-centric service that generates more direct bookings, manages itinerary changes, offers ancillary services, facilitates check-out and takes payment seamlessly. Sounds ideal doesn’t it? There’s only one catch.
What should be technically easy to implement is almost impossible due to the property-by-property payment model that exists in the hotel industry today.
Payment information is currently captured during the booking process and forwarded to each individual property, which in turn has its own acquiring agreement to process payments.
The hotel industry has to shift to a model where payments are managed centrally to increase revenue opportunity while improving the booking experience for guests. This is the only way that ancillary services can be offered centrally without the need for a ‘many suppliers to many properties’ relationship.
It would also enable prepayment rates to be processed immediately and centrally, without the need to forward payment information in a PCI-compliant manner.
Many hotels chains have shied away from converting their brand website into a true transacting platform on par with online travel agents. One of the main reasons is the perceived complexity around taking payments and forwarding funds to individual properties and third parties.
But it’s not that complicated.
Diederik Van Gool from Worldpay explains:
"Hotels brands desire to grow direct bookings and additional ancillary revenue streams to get ahead of others in the race. Embedding a customer-centric payment eco-system can be a key enabler for this vision”
So what are those critical areas in your payment set-up you need to consider in order to get more direct bookings and ancillary sales?
- Become the merchant of record
This is a core requirement to become a true hotel “e-retailer”. Taking payments for bookings means taking on more responsibilities such as contracting with an acquiring bank, managing the payment process, funding the associated costs, organising the onward flow of funds, keeping fraud low and taking care of chargebacks. It might sound overwhelming but every travel agent in the world has mastered these basic requirements - and they make a profit doing it!
- Offer an amazing payment experience
Conversion is everything. The key challenge is to create a seamless omnichannel experience across all guests’ payment touchpoints. This is a lot easier if it is done centrally, for all your properties. Optimise the look and feel of the payment screen with adaptive payment pages, store payment details of frequent guests and enable one-click, invisible payments.
- Customise your payment method mix
Offer the payment methods your customers want to pay with, and the currencies your customers understand, to win a higher share of wallet in countries where credit cards are not commonplace.
While cards are still predominantly used in the travel sector, alternatives such as Sofort, Ideal, PayPal or Alipay are becoming increasingly important. Research carried out by Worldpay demonstrates that alternative payment methods (APMs) will form the majority (59%) of all online payments on a global level by 2017.
- Manage fraud and chargebacks
Fraud will always be a cost in business, but if managed well it can be controlled. Use fraud management tools that can be customised for the travel sector and fine-tuned to match your company’s exact needs. Automated chargeback tools combined with a strong chargeback services team from your acquiring bank can minimise the administrative overhead that you will require internally.
Detailed payment reports can help match bookings with payment transactions to reconcile your accounts. Being in full control of when and what is paid to whom gives you the ability to deduct any agreed commission fees at source.
- Pay your individual properties
How can you forward revenue from holding accounts to individual properties and third parties? There are several options. Using costly and time-consuming international bank transfers is probably the least preferred. Using a global transfer system which is funded centrally (in multiple currencies directly from your online sales) and converts international transactions into local bank transfers is a lot faster, and more cost-effective. This can be complemented by virtual credit card systems for for pay-outs via ‘one-time’ credit card numbers.
Conclusion
Choosing a customer-centric set-up for your payments ecosystem is the first step to more direct bookings and ancillary revenue. This can be easily achieved with a complete and integrated payment service: from taking payments, managing stored credit cards and fraud prevention to chargeback processing and managing funds and pay-outs to properties in local currency.
Click here to learn about Worldpay's solutions.
NB1: This is a viewpoint by Thomas Heldorff, VP travel and airlines, global eCommerce at Worldpay. It appears here as part of Tnooz's sponsored content initiative.
NB2: Image by JakubJirsak/BigStock