Industry, Product  |  17 August 2021 |  Charles Wells

Why it’s time for hotels to embrace payment automation

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Payments have undergone something of a revolution over the last decade. The rise and rise of fintech has not only changed the way that customers around the world pay for services, but about how we think about transactions.  

No one really likes to part with money. That’s human nature. Transaction is an ugly word, and it was historically a cumbersome process. Picture a cashier rummaging for change, a guest fumbling to insert their card the right way in a card reader, or a receptionist waiting awkwardly as the signal drops and the terminal struggles to connect. It’s not a great experience. 

As technology has improved, the payment process has been able to become more seamless for customers – but what about hoteliers? Sadly, it’s not always as seamless, although there’s no reason it couldn’t be. Neither general managers nor front desk staff should need to think about payments: they should be able to set and forget and focus on having conversations with guests that aren’t about money. 

The solution? Automated payments. 

 

What are the automated payments and why are they so important?

Every transaction has a lot of moving parts. As well as the obvious roles that the guest and the vendor play, banks and card networks join the party with interchange and scheme fees, as well as possible processing fees from other third parties. Deciphering this tangle shouldn’t be the responsibility of the hotelier. Instead, it should be simplified and made seamless as part of a core system – in your case, your property management system or hospitality cloud. 

Automated payments are a game changer because they remove the unnecessary manual steps out of the payment process. Smart cloud technology means you can take payments automatically without the need to present cash or a card, which ultimately means improved security, convenience, efficiency, and revenue. Not bad. 

So how does a hotel actually implement automated payments? Essentially, they can be integrated throughout the entire guest journey via your PMS. You should be able to capture payments from anywhere at any time, be it the booking engine or booking confirmation, onsite with a terminal or kiosk check-in, or initiated by you via a payment request. The more payment options you accept, the better, as it ensures guests can choose whichever suits them best. 

 

Why should hotels switch to automated payments?

What’s good for your guests is usually good for your property – and vice versa. Making your own operations more efficient is bound to have a positive knock-on effect for your guests, who’ll benefit from better service thanks to the extra time your team now have. And it will be much easier for guests to book and pay for extras and add-ons, improving their experience while also helping you to grow revenue. It’s a symbiotic relationship with plenty of upside if you get it right. 

There’s more good news, too: guests are ready for it. Thanks to companies like Uber and the myriad selection of delivery apps, people are used to an invisible payment experience. They want to only have to provide their card details once, and then trust the relevant business to responsibly handle the rest. Covid has hastened this trend for contact-free payments, but in truth they were already becoming the norm for many people. 

Let’s explore some of benefits of automated hotel payments in a little more detail. 

 

Improve your operations 

Embracing automated payments means embracing simplicity. It means that individual payments can be actioned with a single click, freeing up much more time for staff as well as reducing the likelihood of any errors. Your team will thank you, too; asking for and processing payments is not their favorite part of the job, and removing that task from the process will bring down stress levels. 

If everything is automated, there’s no need to print paper receipts for you or for your guests – they’ll be sent an email instead. Firstly, that means no paper lying around that could go missing. Secondly, it means that for reconciliation, no one has to manually go through all the receipts and check the figures match what's in the system. It’s already done with zero chance of any mathematical errors – and those stress levels are coming down even further. 

There are also wide-reaching implications for the rest of your operations. Automation means better inventory management, because as soon as anything is paid for, it can automatically be reflected in your PMS or other connected system. It also plays a role in eliminating the night audit, and potentially opens you up to new customers by widening the range of payment options that you can offer.  

ECommerce shows no sign of slowing down, growing by a huge 46% in 2020, the strongest growth in more than a decade. Similarly, digital wallets and mobile payments like Google Pay and Apple Pay (who are also now implementing hotel keys into their wallet) continue to gain in popularity, enjoying a 21.5% market share in 2020. By 2024, these payments are set to make up a third of all POS transactions across the globe. Ensuring your property is in prime position to capitalize on this channel is critical to maximizing revenue over the coming years. 

We already mentioned the trend for contact-free experiences and payments are at the heart of that. Some hotels are now entirely cashless, which reduces risk for staff and guests in terms of theft or loss. Online check-in and check-out are key parts of the guest journey that have undergone the self-service revolution in recent years, and some properties now build their guest journey with 100% online check-in and check-out. With no receptionists or other staff on site, it’s not possible to take manual payments, so automation is a necessity. As you might expect, apartments have been leading the way here, but now hotels are catching up.

 

Be more efficient

Rate automation is another big win. Set up and configure your rates so that you don’t need to think about payments again. The guest will pay the right price every time, and there are no discrepancies. Better, faster, more digital. What’s not to like?  

If your payments are automated and centralized, it makes reporting considerably easier. You should see a fully transparent overview of any fees and costs (for example interchange and scheme fees), which can then shape your decision making for future fund allocation. Your data will also be much more up to date without the need for manual consolidation, and you can wave goodbye to unnecessary printing of reports. The environment thanks you for your small but important step to sustainable hospitality. 

There are a number of excellent accounting integrations that connect with your property management system to ensure seamless accounting. Even the most careful of receptionists or accountants can make mistakes when transferring data or making calculations, so why not let a computer do the job instead? Not only is it faster and more accurate, your team will be able to focus on other areas of their role. 

 

More security, fewer chargebacks 

Online payment hesitancy has all but disappeared over the past decade as even cynics realized that it’s not exactly the wild west. Any merchant worth their salt will abide by strict security protocols and certifications that make online transactions as safe as they are convenient. 

One of the most notable certifications is PCI-DSS, which is backed by all major card companies and helps to ensure the security of cardholder data. Tokenization means that the actual card data never needs to sit in your system, and with new PSD2 regulations being rolled out across Europe that include multi-factor authentication, digital payments have never been safer. 

As we already said, what’s good for your guest is also good for you. Just as guests can make purchases knowing that their details are secure, it also means there’s less chance of card fraud and fewer hotel chargebacks for you to handle. Say goodbye to the scramble of last-minute room reselling. 

 

Increase revenue opportunities 

You might think that automated hotel payments can have a positive influence on your bottom line, and you’d be right. As mobile payments in particular continue to increase, hoteliers around the world should be rubbing their hands with glee: those who use mobile payments spend on average twice as much as those who don’t. Buying goods and services without the need to enter your card details or hand over cash is a different mindset, and one that hoteliers should be taking advantage of. 

It’s also an opportunity to make the most of upselling and cross selling your other services and amenities. A smart hospitality cloud will be able to connect your ancillary services like restaurants and spas and put everything on the same bill. Whether you charge immediately or at the end of the stay is immaterial; either way, you’ll already have the guest’s card details and you’ll be able to process the transaction with just a click. 

This is where convenience is so powerful. If a guest knows that they can effectively just turn up for an hour-long gym session and have the payment handled automatically without them having to do anything, they’re much more likely to hit that treadmill than if they have to book in advance and pay separately. 

Finally, let’s talk about the L word: loyalty. This is another opportunity for hoteliers to encourage not only engagement but precious return business. 69% are more likely to use a loyalty card if it’s on their phone, so building loyalty programs into the mobile payment platform could well be the future 

 

Make guests happy

You’ve already noticed that almost all of the benefits we’ve already mentioned also have another knock-on effect: it makes life easier for guests. Still, it’s such an important point that it’s worth calling out again. 

All the time saved by your team by not having to manually process payments means that they’ll be able to pay better attention to your guests’ needs. Something like this is hard to quantify, but your guests will feel it in their conversations and overall experience. They'll also spend less time queueing thanks to integrated processes like online check-in and self-service kiosks, which is another big plus. 

Essentially, payment automation helps to give guests the powerful gift of choice. From freedom to choose their preferred payment method, to freedom to decide how they check-in and check-out of your property. It's better for guests, and it’s better for you – so what are you waiting for? 

 

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Charles Wells
17 August 2021