Hospitality Today recently spoke to Worldline's Kimberley Hoevers about the latest shifts in the hospitality industry. Beyond cashless transactions, the importance of the customer experience, the rise of omnichannel services and tokenisation are increasingly integral for success in the industry.
What are the top trends shaping hospitality payments?
The hospitality industry has experienced a significant transformation in how customers pay for services and products. Over the past few decades, we've seen cash payments rapidly replaced by credit cards, chip and pin, contactless and, more recently, digital eWallets. But what is the tangible impact of this shift and how has a change in consumer behaviour mapped out a new era for hospitality payments?
Hospitality Today's David Weston recently joined Worldline's Kimberley Hoevers and Ian Hardwick of eviivo during a webinar hosted by Hospitality Today to discuss latest trends in payments for hospitality businesses, and what leaders need to know to maximise profit through the right payment technology and management techniques. Here, we capture some of the biggest takeaways from the conversation.
Customer experience is still king
The hospitality industry has always prioritised guest experience. After all, this is what sits at the heart of the trade. That said, expectations continue to evolve, and customers are expecting more from businesses. This means that organisations must remain focused on the guest journey every step of the way, and this focus goes far beyond simply what guests experience at the property itself. Ultimately, first impressions are formed well before they even walk through the door.
The first step in customers' payment experience occurs when they make a booking. Central to making a good first impression is flexibility, convenience, and efficiency. An important rule of thumb for hospitality merchants to remember is that you have two different groups to consider when creating the ultimate customer journey - the early adopters and the traditionalists. Finding common ground to create an inclusive experience for both groups is critical. A good example of this is having a kiosk available in hotel receptions for early adopters to select a more unattended, digital experience, while also having a more conventional check-in facility with a member of staff on hand to help if required. Even in this highly digitalised world - people still like to feel important and respected which makes having a humanly relevant approach significant.
It's not business as usual
Consumer behaviour has been a significant driving force for change in recent years. So too has the needs and demands of the provider. While we tend to think of services such as contactless or unattended check-ins as a guest orientated benefit, it also serves businesses in equal measure, particularly as hospitality reservations spike during the recovery after the pandemic. For example, in the context of a hotel handling a high volume of bookings, checking-in guests - and the provision of other services - as soon as possible using a secure payments process should be priority to hotel professionals.
The rise of omnichannel services
Omnichannel capabilities are more than just a payments dot connecting exercise, it's about making sure you are first available across every channel that a guest would expect you to be. Once you have a holistic presence, omnichannel payments orchestration will allow you to integrate eCommerce, mobile, and in-store footprints while harmonising data with processors and third-parties. By unifying these channels, the hospitality industry can gain access to the full breadth of data to provide a consistent, convenient customer experience that is both seamless and secure. With secure payments data available, you will be able to further strengthen the customer experience, gain powerful competitive advantage and foster brand loyalty.
PSD2 compliance and tokenisation
A European wide regulation, the Second Payment Services Directive (PSD2) has improved customer rights, enhanced security through the implementation of Strong Customer Authentication (SCA) and provided a framework for new payment and account services by enabling third-party access to account information. PSD2 compliance is by now, widely understood as it continues to be rolled out. Despite undergoing some challenges, the industry is evidently focused on finding ways to adapt under this new legislative framework. The fundamental aims of PSD2 are largely focused on the welfare of the consumer with the security of electronic payment transactions a priority.
Before PSD2 came into force, an Online Travel Agency (OTA) - a web-based agency which enables consumers to book flights, hotels, and other various travel related services online - could ask for a guest's credit card details as a guarantee without authentication. Now, hospitality businesses can still ask for credit card details as a guarantee, to secure permission to trigger a payment, whether immediately or in the future, additional authentication is required at the time the booking is made.
Another important part of the rollout of PSD2 is tokenisation. Tokenisation allows hotels to securely store their guests' sensitive card data on file safely and securely. The data is encrypted and replaced with a unique code, or ID, called a token, which protects it from fraudsters. The process begins when a guest makes a reservation online - the point at which the token is created. It is stored securely so the guest does not then need to present their payment details again when they check-in.
The core benefit of this is that hospitality businesses do not need to be concerned about storing my sensitive information, so there are fewer worries about compliance and, meanwhile, the guest can be reassured that their card details are secure. As a customer, this means that when booking the hotel again online, my payment details will already be stored, creating an easier, frictionless checkout experience. In that sense, tokenisation is a simple and secure way to improve the customer experience and ensure continued business aligned with consumer trends. Payments are a crucial part of the customer's experience, but they must not be a too conspicuous part of their journey. With tokenisation there is no interference anymore from the guest after the first time they offered their card details (for instance while making a reservation on the website of the hotel). The token which is generated can be used later by the hotel to perform a top-up, no-show, late cancellation or late check-out. This way of working means more revenue can be generated because guests don't notice as much when they are spending money. The same happened during the shift from cash payments to digital payments. With cash you really feel and see what you are spending - with digital payments (debit/credit cards) you notice this less, and now through tokenisation as a cardholder/guest, you hardly notice it at all anymore. That said, tokenisation provides advantages for both the hotels and guests.
What should hospitality merchants consider when selecting a payments system?
There are so many choices on the market you may wonder how it's possible to pick one payments provider over another. What makes one solution better than the others, how do you know which one is right for you?
First, don't rush your decision. Changing your provider can be a daunting prospect so you need to get it right. Do your research properly - have conversations with knowledgeable and transparent potential partners who can answer your questions around pricing and functionality in advance. Choosing someone who can take you by the hand and guide you through the switching process will provide you with comfort and peace of mind.
With the right tools and processes in place, you will be perfectly positioned to provide a frictionless, customer-centric payment experience. This will help you earn positive reviews that in turn will attract more guests and enhanced loyalty levels. Ultimately, it's a virtuous circle that will relieve many of your daily operational pain points and set you up for long term success.
About the author
Kimberley started her journey in the company in January 2018, which is 4.5 years ago already.
For her hospitality and payments combine the best of both worlds and she is always on the hunt to create synergies, with merchants and partners worldwide.
When it comes to payments, she stared with a blank page back in 2018, but in the meantime, she worked herself up to being a real Expert as part of Worldline's Expert Community.
She is as passionate about her job as she is about sushi and she is always open for a nice conversation.
Webinar broadcast on 1 June 2022:
"Very helpful webinar, thanks very much" A.S., live webinar viewer
On 1st June 2022, Hospitality Today hosted a webinar for everyone involved in running a hospitality business and interested in the crucial question of 'how you get paid'. We looked at the latest trends in payments for hospitality businesses, and what business owners and managers need to know to maximise their profits through the effective use of today's payment technology and smart payment management techniques.
The webinar was in an informal "Q&A" style, chaired by our CEO David Weston, and featured two experts: Kimberley Hoevers of Worldline, the payment processors, and Ian Hardwick of eviivo, the hospitality management system providers.
Click below to watch the webinar (59 mins):
Presented by:
Kimberley Hoevers, Global Key Account Manager, Hospitality at Worldline
Ian Hardwick, Business Development director at eviivo
Chaired by:
David Weston, CEO of Hospitality Today, Fellow of the Tourism Society, and
winner of the AA Hospitality Outstanding Contribution Award 2021
Webinar broadcast on 14 October 2021:
"How your choice of payment provider can help your business
recover profitability"
On Thursday 14 October, Hospitality Today and Worldline co-hosted a webinar for hospitality professionals. Click the above video player to watch it.
As we emerge from a challenging period for the sector, hospitality businesses are looking to boost their occupancy and bookings with improved customer experience. More than ever, it's crucial to keep innovating in the sector to keep pace with increased consumer demand & expectations.
Broadcast on Thursday October 14th at 10:00am UK time, the session explored the challenges, trends, and opportunities as the hospitality sector emerges from Covid-19.
In this webinar, Worldline in collaboration with Hospitality Today explore:
How hard COVID-19 hit the hospitality, travel and tourism sector
Changes in the hospitality landscape, sector challenges to overcome
The shape of things to come in the next three years
The crucial role of payment innovation in hospitality
What the hospitality sector and hoteliers need now from payment providers
Q&A: "Omnichannel capabilities and client relationships"
Answers by Dean Farley and Ritsaert Trampe (see above)
How did the pandemic change the hospitality industry?
Dean
While the pandemic brought many parts of our lives to a standstill, it also accelerated a growing trend towards contactless payments among businesses and enhanced the importance for merchants to provide a good customer experience.
Hospitality professionals looking to assess new market conditions in their industry had to wait longer than their counterparts in other sectors, largely due to restrictions imposed by the government, and have since had to quickly adopt new payments infrastructure to cater for growing and widening customer demands. There has been a resurgence in business for the hospitality industry. For instance, some 40% of London hotels have a level of occupancy over 75%. However, recovery occupancy levels vary from 50%-80% in Europe. We expect this recovery to accelerate in 2022 despite the inconvenience of vaccines and testing etc., which is still impacting on people's decision whether to go abroad or not for their holiday. Regarding leisure travel, we can confidently say that Northern Europe markets have mostly recovered whereas it will take a while longer for Southern Europe who struggled due to restrictions. Also, 96% of business travel customers are willing to return to business travel and 65% even say they are very willing. Overall, we forecast 65% - 80% recovery by Q4 2022.
"Improving customer experience" - How does this translate to the payments ecosystem for hospitality merchants?
Ritsaert
In reality, this means acquiring the right payments infrastructure to allow for a seamless customer journey, such as online check-ins and check-outs. This in turn limits 'touchpoints' and therefore frees up staff time, allowing them to focus more of their attention on the individual needs of the guest.
With the support of the latest technology, hotels and other hospitality venues should be able to recognise the customer's booking and bank details as well as any specific personal preferences, such as whether they want a room with a sea view. This information can be saved from a previous visit to avoid customers having to queue, which they don't want to do, particularly when on holiday and can be used to offer discounts to loyal customers to boost retention and loyalty.
And how does this link to integrated payment systems?
Dean
The acquisition of omnichannel capabilities is key to a fully integrated payment system and the satisfaction of the customer. Indeed, creating a unique user journey is going to be the way forward. Being able to pick up and put down different devices (mobile, tablet, laptop etc.) at different times to continue with the same booking or transaction makes business more streamlined and universal across all platforms.
By automating the operating processes, which reduces operating costs, an integrated payment solution provides a great opportunity for hospitality professionals to drive revenue across all possible channels. The younger generation are used to more accessible, user-friendly devices and merchants should keep this in mind in order to remain relevant in a fast moving and digitised world.
How are booking tendencies changing?
Ritsaert
Even before the onset of the pandemic, booking trends amongst travellers had shifted. More and more have been moving away from online travel agencies (OTAs), evidenced through the fall of Thomas Cook, and towards contacting the hospitality destination directly to make their booking.
Covid-19 has only encouraged guests to further personalise their trips in some cases due to health concerns, while an increasingly digitally-savvy generation of online users also come at a cost to the middleman, in this case the OTA.
What is "smart routing"?
Ritsaert
Smart routing is an intelligent engine that helps merchants optimise their payment transactions for bookings from abroad. We see this particularly amongst larger merchants, such as international hotel chains. Merchants do not only use a central global acquirer to handle their transactions, but may use a mix of global and local acquirers from regions where they have a relevant number of travellers originating behind a central gateway.
So smart routing analyses the type of transaction and card involved and directs the transaction to the optimal acquirer for the relevant geographical location. This helps maximise conversion rates and is something that can be enormously powerful when you reach a certain level of international transaction volume.
What does "tokenisation" mean and how can it help my business?
Dean
Tokenisation helps an individual protect their bank card details through the substitution of sensitive data with a non-sensitive token which, as a token, doesn't have any 'value'. Instead of merchants being able to see or store the guest's card details following a transaction, a random set of numbers is generated as a token and therefore hides the actual information both from the merchant and from any fraudsters or thieves who hack into the merchant's system, bolstering security for both the customer and the merchant.
What is PSD2? Is it the new "secure customer authentication", with text messages with verification codes etc?
Ritsaert
PSD2 is a European regulation designed to improve and democratise the European payments landscape. Along with PSD2 comes SCA, which stands for Strong Customer Authentication. This regulation mandates a secure identification of payers by Merchants for online transactions which is typically done by two-step-verification utilising text messages, biometrics or other tools. These standards help counter threats from fraudsters to protect both payers and payees under a single standard for the European market. Hotels must have up to date payment service providers in place to ensure they both comply and make the most out of the possibilities and exemption allowing for optimal check-out processes with minimal friction.
"Easy connection to hotel PMS" - does Worldline connect to a wide range of hotel PMS systems?
Ritsaert
Worldline connects to a range of PMS provides and is continually expanding its suite of connections. Examples of current PMS partners are Oracle, HRS, Infor, Protel and many more. Please contact us to see if your current PMS provider is on the list or coming soon.
Worldline introduces 'WL Hospitality Suite':
Above: Worldline's new video introducing WL Hospitality Suite - read more here.
