AIRLINES & ALLIANCES

Tap and Tip: Travel and Hospitality Embrace Digital and Instant Payments

While travel is making a comeback, consumers continue to grapple with limitations on both their time and finances. Despite inflationary pressures, travel remains one of the few discretionary expenses people are reluctant to give up. However, tight budgets and hectic schedules are compelling more individuals to turn to digital resources for assistance in planning their journeys.

(Image Source)

GLO

The • In today’s fast-paced world, cost-conscious individuals with packed schedules are increasingly turning to the convenience of digital tools and payment methods to organize and finance their travels. Additionally, real-time payments offer a streamlined solution for both travelers and travel companies, particularly when it comes to processing refunds.

• As the hospitality industry emerges from a period of substantial losses, it is actively shedding outdated transaction practices in favor of incorporating swifter payment methods into a more comprehensive customer experience centered around personalized service.

• The practice of tipping for exceptional service has deep roots in various cultures worldwide. Transitioning gratuities into a digital format, allowing patrons to express their appreciation through a mobile app instead of physical currency, was only a matter of time. That moment has now arrived.

With the disruption of the pandemic already behind us, consumers are once again booking travel experiences, marking a promising recovery for the travel and hospitality industry. This resurgence in revenue is a much-welcomed development, especially after enduring several years of significant financial setbacks. To cater to this increasing flow of travelers and elevate their experiences, establishments in the travel and hospitality sector are actively moving away from traditional payment methods, opting instead for digital and instant payments. This shift aims to streamline various aspects of everyday travel transactions, including refunds, tipping, and payroll processing.

Thanks to the convenience of mobile applications, travelers now have the ability to effortlessly carry out tasks such as reserving accommodations, making international purchases, and providing gratuities, among others. These technological advancements serve to ensure that consumers can enjoy swift, hassle-free service no matter where their transactions take place.

For Travelers, Time Is Money

Consumers who lead busy lives and are mindful of their budgets are turning more and more to the ease and efficiency offered by digital tools and payment methods when it comes to organizing and financing their travels. Additionally, the availability of real-time payments serves to alleviate potential complications for both travelers and travel companies, particularly in the context of processing refunds.

A growing number of consumers are turning to digital tools and payments to facilitate their travel plans.

While travel is making a comeback, consumers continue to grapple with limitations on both their time and finances. Despite inflationary pressures, travel remains one of the few discretionary expenses people are reluctant to give up. However, tight budgets and hectic schedules are compelling more individuals to turn to digital resources for assistance in planning their journeys. In the past year alone, there has been a notable 16% uptick in consumers who are not only browsing travel information online but also purchasing airfare through digital platforms.

In response to this trend, companies are rolling out increasingly sophisticated digital tools for travel planning. For instance, Tripadvisor has adopted OpenAI’s generative AI technology to create personalized travel itineraries. Similar features are being integrated by platforms like Priceline, Kayak, and OpenTable. Mondee, a travel marketplace, has even announced its integration with a mobile-first generative AI platform.

By harnessing personalization and streamlining both time and costs, these tools foster deeper engagement with users. Consequently, all-encompassing digital travel management and payment applications are poised to become essential for every traveler in the near future.

Convenience also points to real-time payments’ benefits for the travel industry.

The pandemic-induced travel bans and flight cancellations played a pivotal role in highlighting the advantages of real-time payments within the travel industry. Spencer Hanlon, the global head of travel payments at Nium, draws parallels to the gig economy, emphasizing how instant payments per unit of work have become a standard expectation. He remarked in a recent PYMNTS interview, “You carry one person, one mile, why not be paid? You perform a certain function on that trip, why not be paid straightaway? [If] a flight is delayed by two hours, why not get that [insurance] payment straightaway?”

The inherent unpredictability of travel plans in recent years has directly contributed to the escalating issue of chargebacks in the travel sector. Instant refunds could present a straightforward remedy to this problem. Chargebacks surged during the pandemic as consumers viewed them as a more convenient avenue for obtaining refunds when faced with flight cancellations. Nearly three-quarters of travel companies experienced a notable surge in chargebacks, with disputes escalating by 30% year over year in 2022. Alarmingly, close to half of these companies reported that fewer than 40% of chargebacks were resolved in their favor. Furthermore, credit card fraud exacts a staggering toll of $1 billion annually on the airline industry.

Hotels Can Benefit from Instant Payments for Personalization and Cash Flow

As the hospitality sector recovers from significant financial setbacks over the past few years, it is actively shedding outdated transactional approaches. Instead, the industry is embracing swifter payment methods as part of a more comprehensive customer experience centered around personalization.

In an industry founded on personalization, hospitality still abounds with legacy payments.

Accommodation establishments like hotels and motels are consistently aiming to provide guests with tailored and unique experiences. Unfortunately, this dedication often doesn’t extend to the payment process. Many hotels still heavily rely on outdated payment systems, including the longstanding credit-card authorization forms, known for their susceptibility to fraud, that have been in use for decades. These manual payment methods not only incur substantial costs for hoteliers in terms of time, money, and security but also present an inconvenience for guests who have become accustomed to the quicker and more convenient options offered by digital wallets and streamlined checkouts.

A recent study revealed that 40% of guests encountered difficulties when attempting to settle payments for their hotel stays, and a significant 66% expressed an expectation for hotels to securely store their payment information rather than repeatedly asking for it. Given the availability of rapid and instant payment technologies today, it’s imperative for hotels to integrate payments seamlessly into the overall guest experience, making it personalized and hassle-free.

Real-time payments partnerships enable hotels to streamline guest experiences from end to end.

Certain hotels are actively embracing this modern vision of hospitality by forming strategic payment partnerships. Stay Hospitality, a group specializing in short-term vacation rentals and hotel management, recently announced a collaboration with Mews Payments to revamp its manual payment procedures, aiming to create seamless experiences for its guests.

Through Mews, guests have the option to both book and check in online, effectively replacing the cumbersome, multi-step check-in process with a smooth, one-click payment method. By automating manual transactional tasks like generating receipts and reconciling end-of-day finances, this partnership not only streamlines operations but also allows management to concentrate on personalizing guests’ experiences. Furthermore, it offers guests the benefits of real-time payments, ensuring transparency and convenience throughout their stay.

Instant payments for hotels can also improve their cash flow while smoothing guest experiences.

OYO, a prominent global travel technology company, has recently joined forces with the financial platform Stripe to introduce real-time payouts for its affiliated hotels. This collaboration not only furnishes a secure online payment system for guests to make reservations and check in, but it also enhances the cash flow of hotels. Managers now have the capability to access their balances instantly after a successful transaction, providing them with more immediate control over their financial resources.

Tipping in Hospitality Gets an Instant Update

The practice of rewarding good service with gratuities has deep roots in numerous cultures and has endured for generations. The inevitable transition towards digitizing gratuities, offering patrons the choice to tip through a mobile app rather than relying on physical coins and bills, was only a matter of time. 

Hotel guests warm to tipping via digital payments.

Hotel Equities understands that guests frequently desire to show appreciation to staff through tips, but may not always have cash on hand. To address this, the hotel development and management company has collaborated with Grazzy, a digital tipping platform. This partnership offers guests staying at the hotels under Hotel Equities’ management the option to tip staff members instantly and with enhanced security.

The innovative solution enables guests to utilize their mobile devices to scan QR codes displayed within the hotels, facilitating direct tip transfers to specific staff members. Similar to cash tips, the funds become immediately accessible to the recipients. This digital system not only caters to the convenience of guests but also ensures that staff members receive their gratuities promptly.

When it comes to tipping, hotel guests appreciate options.

As consumers lean more heavily on digital wallets for their financial transactions, it’s only logical that they anticipate these preferences to carry over to their hotel and travel arrangements. Infor, a leading hospitality software company, has teamed up with TipQwik with the aim of simplifying hotel tipping to align with consumer payment habits in other contexts.

Through this partnership, guests are provided with the option to make gratuity payments using various methods, including credit cards, one-click options like Apple Pay, or through their guest accounts. TipQwik is accessible to guests upon check-in, allowing them to tip staff members throughout the entirety of their stays with ease and convenience. This integration ensures a seamless and modern approach to showing appreciation for exceptional service in the hospitality industry.

Instant Payments Favor Travelers and Hospitality Workers Alike

• Acknowledge the Significance of Payments in Personalized Guest Experiences: Understand that payments play a crucial role in delivering a tailored and seamless experience for guests from start to finish.

• Incorporate Swift and Instant Payment Methods: Integrate faster and real-time payment options into their platforms and properties to enhance convenience and efficiency for both guests and staff.

• Explore Collaborations for Payment System Upgrades: Consider forming partnerships as an efficient route to modernize existing payment systems, enabling a smoother transition from legacy methods to more advanced and efficient solutions.

For travel and hospitality businesses that focus on crafting enduring experiences for their patrons, enhancing the payment process represents a lucrative opportunity with minimal associated risks. Given the widespread adoption of quicker and immediate payment methods, the opportune moment to take action is at hand — prior to travelers seeking out these advancements elsewhere and potentially moving on from their services.

Source: PYMNTS 

read full article here