As consumers resume their journeys following the pandemic’s long hiatus, travel and hospitality are witnessing a resurgence in revenues — a welcome development after enduring several years of significant losses. To embrace this growing influx of travelers and enhance their experiences, travel and hospitality establishments are looking to shed their legacy-payments past and embrace digital and instant payments to streamline everyday travel transactions, refunds, tipping and payroll.
With the convenience of mobile apps, travelers can now seamlessly perform tasks such as booking reservations, making international purchases, offering gratuities and so on. These innovations can ensure that consumers enjoy fast, hassle-free service wherever they transact.
For Travelers, Time Is Money
Busy, budget-conscious consumers are increasingly tapping the convenience of digital tools and payments to plan and pay for travel. Real-time payments also can reduce headaches for travelers and travel companies alike in the case of refunds.
A growing number of consumers are turning to digital tools and payments to facilitate their travel plans.
Travel may be picking up again, but consumers are still battling constraints on their time and money. Consumers cling to travel as one of the last discretionary items with which they are willing to part for inflation’s sake, but tight budgets and busy schedules are driving more and more to seek digital assistance in planning their journeys. Over the past year, there has been a 16% increase in the number of consumers both checking online travel information and purchasing airfare digitally.
Companies are responding with ever-more-sophisticated digital travel-planning tools. Tripadvisor, for example, now uses OpenAI’s generative AI technology to craft bespoke travel itineraries. Other platforms implementing similar tools include Priceline, Kayak and OpenTable. Travel marketplace Mondee, meanwhile, announced its integration with a mobile-first generative AI platform.
By leveraging personalization as well as time and cost reduction, these tools drive deeper engagement with users. As such, all-in-one digital travel management and payment apps are likely soon to become must-haves for every traveler.
Convenience also points to real-time payments’ benefits for the travel industry.
The travel bans and canceled flights of the pandemic served an educational purpose in bringing the benefits of real-time payments to the fore in travel. As in the gig economy, where workers seek instant payments per unit of labor, real-time technologies have multiple applications in the travel industry for both workers and consumers, according to Spencer Hanlon, global head of travel payments at Nium.
“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?” he said in a recent PYMNTS interview.
Travel plans’ susceptibility to change over the past several years has led directly to the growing problem of chargebacks in the travel industry, where instant refunds could offer a simple solution. Chargebacks skyrocketed during the pandemic as consumers saw them as an easier solution to getting refunds when flights were canceled. Nearly three-quarters of travel companies witnessed a significant increase in chargebacks, with disputes growing 30% year over year in 2022. Almost half of companies said that less than 40% of chargebacks go in their favor, and credit card fraud takes a toll of $1 billion annually on the airline industry.
Hotels Can Benefit from Instant Payments for Personalization and Cash Flow
As hospitality rebounds from several years of deep losses, it looks to jettison legacy transaction methods to include faster payments in a broader customer experience built on personalization.
In an industry founded on personalization, hospitality still abounds with legacy payments.
Hotels, motels and other lodging businesses are continually striving to offer guests personalized experiences, yet this effort often does not extend to their payment experiences. Many hotels are still highly dependent on legacy payment systems, such as the fraud-prone credit-card authorization forms on which they have relied for decades. These manual payment methods not only cost hoteliers heavily in time, money and security but also represent a nuisance for guests who have grown accustomed to the faster and easier methods of digital wallets and one-step checkouts.
A recent study found that 40% of guests said they experienced problems when attempting to pay for a hotel stay, and 66% said they expect a hotel to save their payment method on file rather than asking them to produce it repeatedly. With the faster and instant payment technologies available today, hotels should strive to make payments an integral part of a personalized and seamless guest experience.
Real-time payments partnerships enable hotels to streamline guest experiences from end to end.
Some hotels are realizing this vision of modern hospitality through payments partnerships. Short-term vacation rental and hotel management group Stay Hospitality recently announced it has partnered with Mews Payments to refashion its manual payment processes into seamless experiences for its guests.
Mews enables guests to book and check-in online, thus replacing the stress of outdated multistep check-in with frictionless, single-click payments. By automating manual transaction tasks such as receipt generation and end-of-day reconciliation, the partnership will also free management to focus on personalizing guests’ stays while offering them the transparency and convenience of real-time payments.
Instant payments for hotels can also improve their cash flow while smoothing guest experiences.
Global travel technology company OYO recently partnered with financial platform Stripe to offer its hotels real-time payouts. In addition to providing a secure online payment platform for guests to perform bookings and check-in, the program can improve hotels’ cash flow by allowing managers immediate access to their balances following a successful transaction.
Tipping in Hospitality Gets an Instant Update
Gratuities for good service have been a longstanding tradition in many cultures. Digitizing gratuities to give patrons the option to tip with an app instead of using coins and bills was just a matter of time. That time has come.
Hotel guests warm to tipping via digital payments.
Hotel guests often want to tip staff but do not always have cash readily available. Hotel Equities has a digital solution. The hotel development and management company has partnered with Grazzy, a digital tipping platform, to provide guests at the hotels it operates with the ability to tip staff instantly and securely.
The solution allows guests to use their mobile devices to scan QR codes posted in the hotels and send tips directly to individual staffers. Like cash, the funds are available to the recipients immediately.
When it comes to tipping, hotel guests appreciate options.
As consumers rely increasingly on digital wallets to pay their bills, it is only natural that they expect these preferences to extend to their hotel and travel plans. Hospitality software firm Infor’s partnership with TipQwik is an attempt to do just that by streamlining hotel tipping to mirror consumer payment habits in other settings.
The partnership offers guests the ability to make gratuity payments via credit card, one-click options such as Apple Pay or their guest accounts. Guests may access TipQwik upon check-in so they can tip staff throughout their entire stays.
Instant Payments Favor Travelers and Hospitality Workers Alike
As personalization and speed become the watchwords in consumer payments, travel and hospitality stakeholders have a significant opportunity to capture rebounding revenues following pandemic losses by leveraging faster and more convenient payment options. From instant refunds, which could help ease the growing problem of chargebacks in the travel industry, to real-time hotel payments platforms to instant payouts for tipping staff, the potential of instant payments for travel and hospitality companies goes far beyond guest convenience to include better staff retention and improved cash flow for these venues.
To make the most of this opportunity, travel and hospitality industry participants must do the following:
- Recognize the importance of payments as part of a personalized end-to-end guest experience.
- Integrate faster and instant payment options into their platforms and properties.
- Consider partnerships as a simplified path for upgrading legacy payment systems.
For travel and hotel companies that trade on creating lasting memories for their guests, upgrading the payments experience is a high-yield proposition with no risk. With faster and instant payment options increasingly ubiquitous, the time to act is now — before travelers leave them behind.