Global digital travel revenues from flights, car rentals and hotel bookings reached over $533 billion in 2015 and are projected to grow over 11% to reach $593 billion by year-end 2016. Online booking revenues will continue to grow to reach a staggering $762 billion in 2019, according to eMarketer. Competition is fierce between independent vendors (airlines, hotels, etc.) and online travel agencies (OTAs), each striving to gain a larger share of this enormous pie.
OTAs such as Expedia, Orbitz, and Priceline, to name a few, consistently invest in their websites, search engines and keywords. These efforts have paid off, as the OTAs are gaining market share of total online bookings, growing from 5% in 2014 to almost 8% today, according to Morgan Stanley. With the 10-20% commission paid by hotels to OTAs, hotels are starting to compete with these distributors, in order to increase their direct bookings and overall revenues.
Offering various types of payment methods expands your reach
Much has been written on how hotels can increase direct bookings from their websites, from the importance of a clean and uncluttered landing page to the advantages of offering limited-time discounts and free cancellation opportunities. Additional strategies to increase direct bookings include various digital marketing efforts, such as SEO and blogs, as well as actively participating on review sites.
As conversion from site visitor to customer is only complete upon payment, it is vital not to lose your potential customers at this stage. Hotels should therefore pay special attention to closing the deal by making payment as easy as possible for potential customers. One way to ensure this is by offering a wide range of payment methods, from various credit and debit cards through alternative payment methods such mobile wallets and mobile money. When customers see their preferred payment method offered, they gain the confidence and comfort necessary for completing the transaction.
Credit and debit cards are hugely popular in the US and EU (and mobile wallets are gaining market share there, as well), and mobile money is a popular payment method largely used in Africa. Thus, sites that have an online payment platform that accommodates a variety of payment methods will be able to cater to international markets, increasing their audience and customer base.
Offer an end-to-end booking experience with mobile payment methods
In the US, 43.8% of digital travelers made their bookings via a mobile device in 2015, according to eMarketer. Travelers making reservations via mobile device will pass the 50% mark by the end of 2016 and reach close to 70% of the market in 2019.
Hotels that recognize this trend can offer a complete mobile experience, capitalizing on the many advantages mobile payments offer customers, such as speed and convenience, as well as the ever-important security benefit.
With payment details stored online, mobile payments create the fastest and simplest method for payment. One of the current disadvantages of the online booking process is its length. This is why many sites offer a progress bar, to ensure the customer that he has almost completed his booking. Mobile payments shorten this process, enabling users to make faster decisions and complete their bookings with just a 1-2 taps on their screen.
Increase revenues by upselling simply via mPOS
Hotels can increase other types of reservations and bookings, such as spa treatments, excursions and even room service by implementing mobile point of sale (mPOS) to offer an onsite payment option. This will allow hotels to experience the various advantages of mPOS, such as improved customer experience and increased security in payments. mPOS devices extend the functionality of mobile phones and tablets, enabling them to accept payments, even at remote locations. By implementing mPOS devices at the concierge desk and poolside, hotels can ensure accessible bookings and payments when guests are most receptive to additional offers, which will help increase hotel revenues.
Cast your net wide and enjoy the benefits
Various strategies for attracting customers and increasing hotel bookings require quite a bit of effort such as effective website creation and maintenance, ongoing search engine optimization and brand creation. However, conversion rates, and ultimately revenues, can increase by simply enabling potential customers to complete their transactions with their preferred payment method. By offering a wide range of credit and debit cards and digital payment methods, you will be providing the familiarity customers need to move ahead.
Mobile payment options such as mobile wallets and mobile money streamline the booking process, while offering highly secure payments. Furthermore, due to the consistent growth in mobile phones as the booking medium and mobile payments globally, this method is poised to gain popularity in the hotel booking process.
Finally, incorporating mPOS in your hotel provides a highly accessible method for accepting payment when guests are considering supplementary services, so that each of your bookings realizes its full potential as a revenue generator for your hotel.