Travel meets Fintech: Hospitality in times of great uncertainty.

This blog post is an unpaid article from one of our Yapster community partners. If you or your company also want to contribute – let us know!

Back in the day, financial innovations took a long time. Now, the current pandemic is an unprecedented catalyst for modernization. Customers were not keen on trying out innovative payment solutions, while legacy systems were a huge obstacle in the way of implementing fresh ideas.

Now, consumer behaviour shows increasing interest in digital channels, instead of traditional payment methods such as checks and cash. This means that financial institutions and payment solution providers have to gear up for new demands and deliver and meet them swiftly. Omnichannel and domestic payment solution providers and new innovative digital channels can help companies reach new potential customers, and provide flexibility, effectiveness and cost-reduction.

Liquidity and creditworthiness
According to research and consulting firm Mercator Advisory Group, chargebacks and refunds have always been a huge issue in merchant processing. Before the pandemic, this made up about 0.05% of credit card transaction disputes. Due to COVID-19, this number in some market segments, such as travel, can be as high as 40%.

As the Emerging Payments Association stated in their latest article, „Lockdowns across the globe brought a massive economic shock to the majority of consumer experience businesses such as hospitality and travel. Sport and retail are also suffering a more than 70% drop in sales.“ This mix of factors has made once-stable businesses tremble, and the threat of illiquidity hangs in the air like the Sword of Damocles.

It is no easy job to find the balance between already badly affected income flow and outgoing cash due to refunds. So, Fintechs are exploring new initiatives to preserve their liquidity. Emergency access-to-cash solutions, new payment platforms for SMEs, assistance from governments, and new payment solutions such as digital wallets or central-bank-backed cryptocurrencies are some of the most popular initiatives.

At Bidroom, we believe that in a saturated market, it’s important to provide tailored benefits and extras for our members. We’re always working on new and meaningful travel-related offers for our members. Globally, we have more than 80 so far, and counting.

By offering more and taking that extra step to drive enhanced satisfaction for our customers, and higher traction for our hoteliers, we are providing the industry with a truly unique service.

Another interesting trend is the steady shift from credit card usage (and credit in general) towards debit and ‘Buy Now, Pay Later’ solution providers. According to Payments Journal’s 2020 Debit Performance research, Q1 through Q3 volumes spent on debit cards grew at a rate of 7% in 2020 when compared with 2019, while transaction growth was only 3% for the same period. Contactless card use increased more than anticipated as tap-and-go transactions became more than just a novelty. P2P app use skyrocketed as more consumers looked for cash-free and remote options to make transaction payments.

The ‘Staycation Boom’ and domestic PSPs
The number of international travels and weekend-long escape trips has hit an all-time low due to new regulations and nationwide restrictions.

According to Paul Barron, EVP, Client Engagement, Hospitality from Amadeus, „demand for domestic travel is soaring as travelers look for close-to-home, lower risk holiday options. In fact, recent data has shown a 62.8% increase in net reservations since the reopening announcement in the UK.“

Domestic PSPs (payment solution providers) have become more important. The reason is simple: they are well-established and trusted in their respective countries, like iDeal in the Netherlands or PayU in Poland.

By aggregating them into one comprehensive solution, merchants can cover their key markets and increase their revenue stream, because people are a lot more likely to use trusted payment getaways.

Benefits and Rewards
Rewards, benefits and loyalty programs have become an even more important factor in hospitality.

Points for air miles, limited-time offers, prolonged premium services, and highly discounted benefits are an investment and maintain customer satisfaction, providing added value while travel is on pause.

Loyalty and benefit programs also play a key role in rehabilitating the hospitality and travel industries. They can offer bonus points for new bookings after the travel disruption ends, which can increase new earnings and future redemptions, spurred by higher account balances.

They can also increase the accrual rate of points or decrease redemption requirements for existing members, or offer sign-up bonuses to new members, which can be used to encourage future redemption activity.

At Bidroom, we believe that in a saturated market, it’s important to provide tailored benefits and extras for our users. We’re always working on new and meaningful travel-related offers for our members. Globally, we have more than 60 so far, and counting.

By offering more and taking that extra step to please our customers and drive higher traction and customer satisfaction for our hoteliers, we are truly trying to provide something unique.

What makes Bidroom different?
Bidroom is a travel club for travel lovers where you can save more on hotels compared to other online travel platforms. Take advantage of having unique access to a world of travel-related benefits and discounts with your membership.

Members get special treatment with their hotel bookings —get complimentary benefits including free room upgrades, free mini-bar, and free parking. Spend the day at the hotel spa, or dine in the hotel restaurant for discounted rates.

Bidroom’s focus is to provide an end-to-end experience for members, so you can feel supported at every step of your journey. Get discounts on practical services like car rental and luggage storage, and savings on exciting trip must-haves including tickets to events and local attractions with brand partner deals.

Bidroom is a completely membership-based marketplace where hotels do not pay commission, so they can offer members better deals than anywhere else online.

About Bidroom and YAPEAL
A revolution in travel meets a revolution in finance. We each share a common vision in terms of having a community-driven company and focus on building a service. Open mindsets and the desire to maximize customer value let us think beyond traditional borders and explore solutions that combine the best of both industries.

Stay tuned to find out more.