If there was ever a time for an entire industry to stop, reassess, and reset, it was the last couple of years. First there was the pandemic, forcing the hospitality industry to a painful halt. Then there were staffing shortages. And now there’s the energy bills, rising interest rates and a looming recession. Forget the ‘new normal’, today it seems there’s just an endless stream of curveballs and ‘unprecedented’ challenges.
Hospitality businesses know that competition for share in consumers’ shrinking wallets will be fierce. On top of that, their own budgets are going to be squeezed. To remain competitive, it’s going to be critical to deliver the best possible guest experiences while at the same time ironing out any inefficiencies in their operations.
But what does that look like in practical terms? To find out, we dug into the data collected for ourRetail Reportto uncover trends and opportunities specific to the hospitality industry. The result: Our newHospitality Report. Here's a summary of our findings:
1. Digital transformation is a £900bn opportunity
In response to accelerated digitisation during the pandemic, coupled with the need to keep pace with consumer expectations, hospitality is undergoing a much-needed renaissance in digital solutions. Digital transformation is top of the agenda. And for the early frontrunners, this is paying off. Globally, 41% of respondents in the hospitality and travel sector say their business is now in a better position due to investments to improve operations. And 71% of travel and hospitality businesses that connected their payment systems to other parts of their business grew by at least 20%. On top of that, growth projections for 2022 were 11% higher for those that connect their systems compared to those that did not.
Given the challenges facing the UK’s hospitality industry today, investment in innovations that are proven to deliver results could be a means of navigating choppy waters and ensuring ongoing success.
“We want to offer our guests the most pleasant payment experience possible for their stay in the hotel - from booking online to checking in at the hotel to checking out with ease.”
2. Connectivity is central to the customer journey
The flexible, tech-driven experiences made available mid-pandemic have blurred the lines between channels; consumers are now used to jumping from one to the other (and back again). To meet these new expectations, forward-thinking hospitality businesses are providing new ways for customers to pay. This might be by offering self check-in options to reduce queues at reception. Or it might be letting guests pay for poolside cocktails with the tap of a wristband. Whatever the journey, connectivity is key.
But we have some way to go; just 37% of UK consumers think hospitality businesses do a good job of linking online bookings with the customer experience on the premises. Hotels are aware that guests are less willing to accept mediocre; 60% say their guests have become less tolerant of poor online experiences. The challenge is how to bridge the gap between expectation and reality.
That’s where unified commerce can help. And it’s been proven to work: 53% of UK hospitality businesses found unified commerce to increase customer loyalty, 52% found it improves conversion rates, and 48% found it improves business efficiency. Overall, our research found that, globally, unified commerce increases businesses’ performance by 9%.
3. When it comes to payments - the more choice, the better
In-person experiences are hospitality's strong suit. But today, the best of in-person marries the best of digital to establish a new standard of service. Solutions like express lanes, digital concierge services, and more robust mobile app experiences can make all the difference. It’s all about balance – 39% of UK consumers would prefer contact-free check-in and check-out at hotels while 46% of consumers don’t want to rely on self-service for more upscale dining.
It comes down to truly knowing your guests and designing an experience that feels right to both them and your brand. One way to do this is to make paying easy. We’ve seen an increase in demand for payment options like wearables, contactless payments, and mobile point-of-sale (mPOS). This speaks to a heightened demand in the guest experience. For instance, 38% of UK consumers like it when hotels issue payment tokens (e.g., a special card or wrist strap) so they can make purchases easily while keeping their wallets in a secure place.
4. You can exceed customer expectations with the right data
Increasingly, customers want businesses to recognise, predict, and meet their needs in a relevant and timely way. But currently only 30% of UK hospitality businesses use payments data to build a better picture of their customers and just 28% use payments data to understand user behaviour and improve customer experience. This points to a huge opportunity.
The insights unlocked by payments data allow you to respond immediately to what guests are telling you. It can help you identify where guests are coming from and how frequently; you can analyse purchase patterns during their stay; and you can use the insights to improve your loyalty incentives.
But before you dive into data, there are a few crucial things to keep in mind. Regulations such as General Data Protection Regulation (GDPR), Payment Card Industry Data Security Standards (PCI DSS), and the Revised Payment Services Directive (PSD2) must be adhered to. This isn’t just important from a liable perspective, it’s critical to establishing trust with your guests.
“Delivering bespoke and sincere service is always at the core of our legendary Raffles experiences that guests have come to love and appreciate. We believe that the guest journey with Raffles Hotel Singapore needs to be seamless from the start to the end and payment processes are key to achieving this."
Don’t call it a comeback, call it a new chapter
The hospitality industry has faced its share of challenges in the last few years, but the steadfast adoption of technology in the sector has primed businesses for a new way of working and serving customers. The role digital solutions play in how hospitality businesses serve their customers will become increasingly important in the coming years.
UK Hospitality Report
Learn more about how unified commerce and data-driven decision making can play a role in your business.