AN INCREASING NUMBER of international tourists are traveling abroad, and hotels that want their business need to make it easy for them to pay. To accomplish that, many large brands are changing from property specific payment systems to centralized systems, according to a new white paper from the Hotel Electronic Distribution Network Association.
HEDNA’s Payment Trends and Future Best Practices in the Hotel Sector, researched by the company’s Global Hospitality Payment Working Group based on input from more than 50 hotel, technology and payment companies over the past 18 months, delves into numerous changes in how hotels handle guest payments. One subject covered in the paper is handling payment from non-local payment systems, such as China’s Alipay and WeChat.
“Hotel brands outside of China cannot accept those payment methods due to their property -centric legacy payment systems,” HEDNA’s paper says. “Instead, they have redirected their Chinese guests from their brand.com to a Chinese OTA, which charges them commission fees. Facing similar issue with other international guests, hotels need to be able to offer a broad range of payment methods to boost sales conversion and thereby revenue.”
One way to overcome that issue is to move away from property-by-property payment models and toward centralized systems that route transactions to multiple specific acquirers based on certain rules. “The chain would then become the merchant of record, who is responsible for contracting with payment service providers (e.g. acquiring banks), managing the entire payment process, disbursing funds to individual property, controlling fraud and handling disputes,” HEDNA said.
Under a centralized payment system, hotel chains can accept various payment methods, including international credit cards like American Express and alternative forms of payment. They also acquire ancillary revenue streams and reduce operating complexity, HEDNA said. “Additionally, it could be a solution for creating an omnichannel experience as the chain has better control over the look and feel of the payment page across all guests’ touchpoints.”