Industry  |  16 February 2022  |  Eva Lacalle  |  4 minute read

Why should hotels offer flexible payment options?

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Hotel payment options are constantly evolving and as people move more and more towards mobile-first reservations, it’s important to have flexibility in payment options beyond just cash and credit card.

E-wallets like PayPal and smartphone payments from Apple Pay, Samsung Pay or Google Pay are not only the wave of the future, but they are also safer.

The more flexibility you offer to guests, the more chances are they will book with your hotel, and facilitating an easy, hassle-free payment solution should be your first priority in order to enhance the customer experience with your brand.

In this article, we will look at what are the most common payment options for hotels and the advantages of offering different options.

 

What are the most common payment options for hotels?

There are many common payment options for hotels, but the most common ones are credit card, debit card, cash and now more and more, mobile payments like Apple Pay, Samsung Pay and Google Pay.

For online tour operators or third party sites, PayPal may also be common.

Let’s take a look at each one of these common options one by one.

Credit cards

Credit cards are perhaps the most common payment option for hotels. Why? Because guests have an established line of credit that they can use to pay off their hotel room the next month without having to front the money right away.

As customers get used to making purchases when and how they want, credit cards open up the possibility of booking a hotel room even if they don’t have the money outright. 

For hotels, it’s also a great option because hoteliers can easily place a security deposit on the hotel room for incidentals, which can be harder with cash or a debit card.

The most popular credit cards for payment are Mastercard or Visa, but there are a wide range of credit cards available. However, many hotels might avoid American Express because of their steep fees.  

Debit cards

A debit card is much like a credit card, except that the guest must have the funds available in their account in order to pay for the room or block the security deposit.

Unlike a credit card, the funds will be charged immediately and taken from the guest’s account in real time. While most people have a debit card, not everyone has a credit card.

Cash

Cash is more common for short stays or for 1-2 star hotels. You won’t often see a five-star hotel being paid in cash, but it is possible.

In the case of a cash payment, be sure to check the higher bills for authenticity, and take the security deposit in cash too. That way, should there be any incidental fees or damage to the room, you will be covered.

E-wallets and mobile payments

E-payments and mobile payments are on the rise for hotels. In the case of third party reservations through online tour operators, e-wallets like PayPal are especially common.

In the case of mobile payments, they are especially common upon check-in. Plus, it’s a great contactless and paperless transaction option, and it’s convenient as guests don’t even need to carry a wallet on them. 

Mobile payments are incredibly safe because your front desk staff doesn’t come into contact with the physical card, and they are usually protected by a face ID, or a password.

The safety of your guests should be of utmost priority because by protecting your hotel you also protect your guests.

mobile payment

 

What are the advantages for hotels who offer different payment options?

The goal behind different payment options should always be hotel payment processing that’s easy and can be carried out in any phase of the guest journey, whether that be online or offline.

It’s important to be able to offer flexibility to your guests and automated transactions for your staff to streamline the operations process.

Flexibility in terms of payments is also paramount in order to remove any barriers to purchase.

Furthermore, it is an important part of the customer experience because after choosing your brand, it is essentially the first interaction and transaction a guest has with your brand, so you want to offer as many well-known payment methods as possible to instill the confidence of your potential guests, especially for first-time bookers.

Encourage direct bookings

The more options you give your guests, and the more comfortable they feel with those options, the more likely you are to lead to conversions once you have them on your website.

You may even consider offering more payment options for when guests book direct, opening up the possibility for more direct bookings. Find out more ways to increase direct bookings.

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Drive customer loyalty and retention

Guests want to book with a hotel that makes the reservations process easy. With the rise in instant gratification with online purchases, guests also want to book when they want to book and with the payment option of their choice.

This is why hotels that offer flexible options are better suited to hold their own against the competition, helping to drive customer loyalty and retention. 

When a customer has had a good first experience with your brand, they are more likely to repeat, and a good experience starts with a flawless booking process from the time they put in their booking details to the time they choose how they want to pay, and receive their booking confirmation.

Reduce costs

When you have a range of options available, especially those like debit card, cash and mobile payments that have no transaction fees, you can diversify and reduce your dependency on only one kind of payment type.

Flexible options also reduce the amount of manual labor necessary to carry out transactions, so that your front desk can focus on providing the best service possible instead of swiping a credit card. 

Conclusion

In this article, we’ve looked at the advantages of offering flexible payments and the most common types of payments for hotels.

We’ve seen that opening up flexible transactions encourages customer loyalty and retention rates, reduces costs, and helps increase direct bookings.

By having a range of options available, you can make potential guests feel at ease so that they are more likely to book. 

Your goal as a hotelier should be to have the smoothest booking process possible, which starts with flexible payment options.

Flexibility also improves the customer experience from the moment they make their first transaction and makes it more likely for one-time guests to turn into repeat guests by making a lasting first impression.

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Eva Lacalle
16 February 2022

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