Three Trends in Hospitality Payments for 2022
By Mark Rademaker, Global Head Hospitality at Adyen
Metrics such as occupancy and revenue likely will return to pre-pandemic levels, but the hospitality industry has forever changed.
At Adyen, we see three trends currently in play that are influencing the shape of things to come. And although it may not be immediately evident, having a robust and complete payments infrastructure will be integral to fully capitalizing on these marketplace dynamics. Let’s examine each:
Trend #1 – A more personal, yet independent guest journey
The first is an evolving guest journey. The guests themselves have changed, and their expectations are different. They now insist upon a certain degree of high-tech and low-touch options. Their mantra is essentially this: “Know my preferences but give me my independence and flexibility.”
One of the easiest experiences to convert into low-touch is the act of paying—whether upon check-in, for pre-defined packages, or for a-la-carte goods and services. Guests want the freedom to pay with their favorite options, on their own devices, and to only be asked once.
An integrated payments platform lets guests pay with maximum convenience and minimal touch, while giving hoteliers key insights. Understandably, some operators—particularly in the luxury segment—may be concerned about the trade-offs in customer experience by going low-touch. But such anticipated risks haven’t materialized.
In fact, the opposite is true: High-tech, low-touch options can enhance the guest experience. For example, by using a payments platform that supports card tokenization, returning guests can check in and pay even more seamlessly (but without compromising security). They can also skip the checkout queue without worrying about the hotel pursuing them for an unsettled bill.
Trend #2 – The continued search for non-room revenue
As the industry recovers, the search for ways to bolster non-room revenues will intensify. Whether it’s promoting hotel rooms as co-working spaces, daycations, staycations, culinary experiences, or just vouchers and gift cards—we expect the industry to pursue a variety of initiatives to diversify revenue.
But such efforts will require different payment environments—and the need for a flexible payments infrastructure. For example, the ability to seamlessly switch to per-hour billing might become a new staple.
Then, there’s the data component. As hotels rapidly experiment to discover what works—and what doesn’t—they’ll need data to guide their decisions. “Let data drive the business,” wrote Emily Weiss, Accenture’s global travel industry sector lead, emphasizing the key role data will play in unlocking new opportunities, enabling advanced customer segmentation and personalization, and driving efficiency and marketing spend. [1]
One of the best sources of valuable insights comes from payments data. But there are challenges to glean them. Data needs to be mapped back to individual guest profiles, broken down by category, and evaluated using the necessary analytics to help guide the next move.
Having a single payments platform that can sit across the entire payment value chain is key to overcoming these data issues. Other crucial features include card-linked loyalty for tracking “piecemeal” transactions as well as central reporting and analytics for linking everything together in a cohesive picture.
Trend #3 – Using automation to boost efficiency
Labor shortages are hampering the industry’s recovery and leading to the rise of automation to improve efficiency. The CEO of Marriott noted recently that 20 percent of employees in travel and tourism globally have permanently left the segment—calling it “among the most significant challenges we have to navigate.” [2]
This is where high-tech, low-touch options such as contactless check-ins can play a role—not just on the front end, but on the back end as well. They can free up limited staff and direct them toward areas where high-touch is a core part of the experience. Such automation will be critical to manage the resurgence in guest volume. Having a payments platform that accommodates this switch will be essential. And because hotels will make different choices regarding the level of automation that best fits their needs, payment platforms must be flexible enough to support multiple variations.
“One-size-fits-all” doesn’t work in a fast-changing landscape
Flexibility is paramount in a complex, fast-changing landscape. As Hyatt’s Chief Commercial Officer Mark Vondrasek recently reflected on the lessons of the pandemic being comfortable with experimentation is crucial. [3] But such experimentation must rest on a robust foundation.
A single payments platform could offer hotels such a foundation—an end-to-end platform that allows businesses to easily experiment without sacrificing usability, security, or consistency. By sitting across the payment journey, we take the Payment Card Industry (PCI) compliance burdens out of the hoteliers’ hands, enabling them to make payments a force of innovation—instead of a business-as-usual process with downside risks.
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