Let's consider how money flows through a hotel – from booking rooms to paying for food and services. All these payments keep the business running smoothly. However, handling numerous transactions manually every day can be stressful for both guests and hotel staff.
We all want payments to be quick and effortless, without any extra hassle. Luckily, there's a solution: automated payments. Things like mobile payments, peer-to-peer transactions, and digital wallets have become common ways customers prefer to pay. These methods provide convenience and much-needed peace of mind.
In this article, we'll journey into how automation is changing the financial game in hotels and ask the CEO of HotelFriend about why going digital is paramount. No more complicated money talk – we're diving into a world where technology takes care of the hard parts, making hotel stays super smooth for everyone involved.
What are the automated payments in the hospitality industry?
You've probably heard the term "payment automation" a few times, but let's get down to what it means. In this case, automation works as a digital assistant that handles the complex parts of processing transactions for you. It's about letting the backstage work of vendors, banks, card networks, and other technical bits happen behind the scenes, while you and your team focus on creating exceptional experiences for your guests.
Now, the pivotal question is: how can a hotel achieve this? The solution lies in integration with a payment system through a Property Management System (PMS). This integration empowers your payments to occur at any touchpoint during your guest's stay. Whether it's through your booking engine, at the front desk, or just before they arrive – this approach enhances security and efficiency and even boosts your overall earnings.
How does hotel payment processing work?
Let's demystify the process by looking at the most common scenario. It's the end of a guest’s hotel stay, and it's time to settle the bill. As our guest approaches the front desk with their credit card, here is what usually happens:
- Presenting the card. The guest hands over their credit card to cover the expenses incurred during their stay.
- Initiating the payment. The hotel staff requests the guest to either tap or swipe their card on the terminal, kickstarting the payment process.
- Communication with the bank. The payment processor sends a virtual message to the guest's bank through the credit card system. This message asks for permission to charge the specified amount.
- Bank approval. The guest's bank responds by sending an "approval code," confirming the green light for the transaction. The hotel staff records this code to ensure security and provides the guest with a receipt for the payment.
- Funds Transfer. Simultaneously, the bank transfers the payment into the hotel’s merchant account. Later, this amount is deposited into the hotel's bank account.
The beauty of this process lies in its automatic nature; no manual intervention is required. Other payment methods, such as online transactions or digital wallets, operate in quite similar ways. Furthermore, if your Property Management System integrates with a payment processor, various associated tasks—like manually emailing guests seven days prior to their stay for prepayments—can be eradicated.
Embracing automated payments in the new normal
The way we book and pay for hotels has undergone a remarkable transformation, especially during СOVID. The Hotelier Technology Sentiment Report reveals a fascinating insight: around 82% of surveyed hoteliers, a total of 525, introduced at least one form of technology during the pandemic. This surge underscores the rapid adoption of technology-driven solutions across the industry.
While upgrades in the hospitality industry are plenty, hotel payment automation really deserves the spotlight. Since 2019, even more people started using contactless payments like Apple Pay and Google Pay. A survey by Rapyd found that 60% of consumers want to use touchless payments instead of cash. Adapting to this change and catering to rising demands is extremely important for hotels in their competition for clients.
In the modern landscape, having a seamless payment process is no longer just a competitive advantage – it's non-negotiable. Payments have transformed into a commodity, with accessible payment options available through local banks, payment service providers, and fintech organizations.
The 7 reasons why you should automate your payments
Incorporating automation means revolutionizing the way your hotel does business, benefiting both your establishment and your guests. Here are seven reasons why you should definitely consider doing this for payments in your hotel:
- To stay on top of regulations
Following rules like PCI and PSD2 on top of local regulations can feel like a major challenge for some hotels. But here's some good news: hotels don't have to handle this all by themselves anymore. Most of the automated payment system providers are compliant so you can be sure to follow these rules as well.
- To make things easier for everyone
Used to the swift convenience of eCommerce, your guests expect the same experience when booking hotels online. Yet, outdated websites and in-person check-ins clash with these expectations. This disconnect not only drives potential guests away but also сuts conversion rates. Luckily, automation lets them quickly settle their payments and enjoy faster check-ins and check-outs.
- To keep sensitive data safe
While alternative payment methods are becoming mainstream, concerns about data security and fraud mitigation are high. But avoiding these methods entirely is not a viable solution. To make your life easier, fraud detection technologies and robust security practices have become integral parts of automated payment processors.
- To free time for connection with guests
According to McKinsey’s insights, businesses could reclaim up to 69% of their time by automating data processing tasks. The first example is the front desk, where hours are spent swiping credit cards, entering contact details, and generating invoices. The integration between PMS and auto-payments covers all those issues and enables us to save hundreds of man-hours spent on manual labor.
- To reduce the chance of errors
Errors are always associated with decreased customer satisfaction and financial losses. Avoid the possibility of mistakes due to manual input by adopting automated payments. Integrating a payment solution not only minimizes such risks but also streamlines your accounting processes, ensuring that you get reliable data for informed decision-making.
- To save your hotel’s resources
Connecting payment solutions with your hotel's software brings a huge return on investment. Think about situations where tools like self-check-in kiosks with terminals linked to your property management system simplify payment processing at the front desk. This is a huge opportunity to enhance customer service and decrease the need for extra staff.
- To get a competitive edge
Adopting the latest trends can help you capture the interest and loyalty of guests who are willing to pay more for tech-friendly accommodation. This proactive approach has the potential to generate curiosity among guests and foster loyalty, allowing hotels to charge higher prices for top-notch convenience.
Choosing an advanced approach might come with a slightly higher price tag, but sticking to outdated payment methods can result in missed bookings or errors. The solution is to modernize and seek out reliable partners who can support you through this process.
Expert insights: CEO of HotelFriend, Denis Severyuk, on "Making payments an experience"
Denis Severyuk, a visionary in the hotel technology sector and the CEO of HotelFriend, emphasizes the transformative potential of automated payments. He states, "Automation isn't just about saving time, it has the power to curate exceptional journeys for both guests and hoteliers. In today's world, where convenience and security are a priority, automated payments are all about frictionless experience.”
HotelFriend has gained prominence as a provider of Property Management Software for the hospitality businesses. The company has recently introduced HotelFriend Payments—a project, designed to empower hotels to adopt automated payments with more confidence.
“In an era of instant gratification and mobile convenience, consumer expectations have evolved. People no longer have patience for complex procedures; they got used to tapping their phone screens and getting the desired services immediately. This is what we want to accomplish with HotelFriend Payments integrated into our PMS," Denis explains.
As payments are now deemed an extension of user experience, businesses are redefining their approach by fostering an environment where customers glide through the process in seconds. This level of payment convenience has already become a staple in delivery applications, online booking platforms, and now in the hotel industry.
The role of automated payments in hotels is set to expand, reshaping the way guests settle their bills and ushering in a new standard of hospitality. Today, embracing automated payments and new payment methods is no longer a luxury – it's a necessity.
Hotel managers and owners must explore this technology to stay competitive. Implementation of automated payments gives way for hotels to streamline operations, enhance data security, and ultimately elevate their standing in the industry.
Author: Inna Chalenko, IT Copywriter, HotelFriend AG.