Right payment, right person, right time: how hospitality brands can identify the alternative payment methods they need to boost direct channel revenues.
As alternative forms and methods of payment – also known as APMs – become more widespread and popular among consumers, it’s important for merchants across the travel ecosystem to support them. By the end of this year, 55% of all online transactions will be made using APMs – a percentage travel merchants can’t afford to ignore. Without offering the right payment methods to customers that lead to increased conversions, bookings and upsell opportunities, travel brands risk leaving significant revenues on the table.
But how can hotels and hospitality brands identify which APMs to support? With more than 800 APMs available around the world, what is the optimal mix of local and global payment methods needed to boost ancillary revenues and direct channel conversions?
These are some of questions I explored in a recent webinar hosted by Hospitality Technology Next Generation (HTNG) called “Right Payment, Right Person, Right Time”. While the exact payment mix will vary by individual hospitality brand, there are several considerations every hotel, resort or venue should keep in mind.
Understand the Types and Variety of APMs
APMs can take many forms, from bank transfers and cash vouchers to the major global digital and mobile wallets most people are familiar with, like Apple Pay and PayPal. From this cross-section comes additional regional variations with brands like MobilePay enjoying widespread use in Europe, but little traction elsewhere. Conversely, some APMs like Alipay started as region-specific forms of payment but have gained near-worldwide acceptance as their user base and market share accelerated. For example Alipay, which started in China as payment department for Alibaba’s Taobao platform, now has 870 million users worldwide as it has gained broader merchant acceptance. That’s why hospitality brands need to balance both global and local payment methods to drive more bookings and revenues per guest.
The Power of Payments as an Omnichannel Connector
What’s the relationship between payments and bookings and revenue? In our webinar, we discussed how payments are the “glue” that holds together today’s omnichannel experience – enabling seamless purchases across digital channels. Hospitality brands can get every other aspect of their omnichannel experience right, but if their payment methods don’t meet guest expectations, they’ll miss opportunities to generate the revenue they need from their direct channels. Offering a choice of payment options can prevent guests from abandoning travel bookings because they are unable to pay the way they want to.
Where Your Guests Come From Matters
Leisure as well as business travelers rely on the APMs they use at home. For this reason, hospitality brands that want to appeal to the broadest segment of international travelers should support global payment methods, including the big digital wallets like Apple Pay, Google Pay, and WeChat Pay. Meanwhile, hyper-local payment methods, such as Boletos in Brazil or OXXO Pay in Mexico, are important for hospitality brands that serve primarily domestic or local travelers – or want to cater to travelers from those markets. Hotels and hospitality brands need to strike a balance between supporting the payment methods their current customers prefer and those that meet the needs of the customers they want to attract.
Thinking about expanding your payment strategy in this way can help you meet the expectations of your guests, boost ancillary and core revenues, and increase conversions and bookings in your direct channels. To execute a comprehensive APM strategy, hospitality brands should lean on a trusted technology partner with a robust payment platform that supports the payment methods that are important to your business and meet your customers’ needs.
CellPoint Mobile’s payment platform, Velocity, empowers hospitality brands to offer the most relevant global and local APMs to their customers. This ultimately increases conversions and revenue while creating a better customer experience. You can find out more about Velocity or the rest of our digital commerce solutions here, or visit our Resources page to watch our full webinar with HTNG.