About the Paper

The hotel sector was heavily impacted by COVID like all retail and travel verticals but has demonstrated strong recovery since the pandemic. However, the industry's strong recovery comes with a significant caveat. EDC estimates $21 billion to be attributed to direct payment acceptance costs alone in 2024. This number is further increased by adding indirect payment costs due to fraud, chargebacks, and reconciliation. Beyond costs, current payment practices lead to substantial lost revenue opportunities – with our research showing that a quarter of guest’s experience booking difficulties due to payment issues – leading to reservation abandonment or booking with a competitor/OTA. And most critically, not optimizing payment strategies risks undermining the guest experience and long-term competitiveness.

In this white paper, we will delve further into understanding the current state of payments in the hotel sector and examining pain points that are undermining business performance. The current state re-iterates the fact that leading hotel chains need to reimagine payments not just as a "cost of doing business," but as a strategic asset that can be managed proactively to drive growth and deliver the seamless experiences guests expect. Through our analysis, EDC has identified five actionable best practices forming a comprehensive framework aiding hotel chain in this transformation. These include,

1. Establish centralized payment systems

2. Implement an omnichannel payments strategy

3. Offer the right mix of payment methods and currencies

4. Maximize value from payments data

5. Monitor and optimize payment related KPIs

Based on our experience in the travel sector, we have observed payment cost reductions in the range of 6-12% over a 3-year period, along with additional revenue enhancement opportunities, by implementing these best practices. EDC would be pleased to discuss specific payment optimization for your hotel and help develop a bespoke roadmap leveraging our hospitality payments expertise, industry benchmarks and insights from this research. Please contact: mark.beresford@edgardunn.com

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