“The first interaction with a guest is typically collecting payment which sets the tone for the stay. Guests want smooth, frictionless, and ‘invisible’ payment processes that operate in the background, and seamlessly blend into their overall stay,” writes Donal McGuinness, CEO of Prommt

The rise in no-shows, late cancellations, and fraud poses a serious risk to a hotel’s reputation and financial well-being. When guests fail to uphold their reservations or cancel unexpectedly, hotels aren’t just losing potential revenue from vacant rooms –  they’re left scrambling to manage inventory and staffing.

Card-not-present fraud, phishing, digital skimming, chargebacks, and more – the hospitality industry is the UK’s second most crime-prone sector. The surge in online bookings and evolving fraud tactics have provided scammers with more opportunities to pilfer payment details and personal information from unsuspecting guests. Even prominent hotel chains have been hit by data breaches, resulting in the theft of guest information. Nearly one-third of hotels reported a data breach in 2023, with 89 percent of them facing multiple breaches within the year. The average cost of a breach in the industry stands at approximately 3.4 million USD. In addition to immediate financial setbacks and loss of trust, these breaches inflict lasting damage on the reputation of affected hotels.

Amidst these hurdles, there’s an additional layer of rising guest expectations. Today’s guests seek premium experiences and expect brand values, convenience, and personalisation to extend to payments. The first interaction with a guest is typically collecting payment and, hence, sets the tone for the stay. Guests want smooth, frictionless, and ‘invisible’ payment processes that operate in the background, and seamlessly blend into their overall stay. Nearly 50 percent of guests prefer contactless payments, and over half seek a fully contactless check-in and check-out experience. Calling out card details over the phone during booking, or facing delays at checkout due to payment issues introduces unnecessary friction that today’s guests don’t tolerate.

Data Compliance 

Partnering with a paytech ensures that hotels handle their guests’ data in line with Consumer Privacy Acts, TCPA, UK Data Protection Act 2018, EU GDPR, and other local regulations. Insecure phone and remote transactions are replaced with a simple, online, and secure payment process. This minimises the risk of compromising guest information since sensitive data isn’t directly exchanged between guests and hotel staff. Guest card details are tokenized and stored securely with the payment gateway, eliminating the need to view or store card data locally.

Moreover, working with a smart paytech that supports open banking payments provides an additional layer of security. Hotels can substantially reduce fraud, chargebacks, and unauthorised access to sensitive financial information. Studies show 61 percent reduction in fraud by 2024, due to advanced encryption and real-time authentication through open banking APIs.

Hotel PMS and Payments Tech Integration 

Many hotels are integrating their Property Management Systems (PMS) with a paytech platform that enables them to request and collect payments in a way that is easy, fast, and secure. This seamless integration enables them to send payment requests for reservations, events, and blocks directly from the PMS. These requests can be dispatched via email, SMS, or a paylink within a chat app. The payment status updates automatically in the PMS, and hotel staff receive notifications as soon as the payment is processed. Hotels can say goodbye to tedious tasks like copying/pasting guest details and manually updating payment statuses in the PMS – it’s all taken care of automatically. This streamlined process reduces time and costs associated with payment administration and allows for the collection of advanced payments. It helps to minimise late cancellations and no-shows.

The integration can include automated payment collection for reservation bookings associated with a particular booking or rate code, like those from OTAs or the hotel’s booking engine, helping to further reduce fraud originating from these channels.

Automation and Payment Orchestration

Hotels equipped with the right payment technology can effortlessly set up customised payment plans and manage recurring payments for guest memberships, which is ideal for co-located golf resorts and fitness centres. Sending reminders and processing refunds can be done with a click. This reduces the risk of human error and the need for manual intervention, freeing up staff time. With team management features and flexible access control, hotels can deploy one payment solution across multiple locations and internal departments.

Hotels can drastically increase payment success rates by setting automated chase paths for failed transactions and presenting alternative payment options to complete the payment. Offering multiple payment methods such as open banking and cards drives cost savings, greater convenience, and choice.

By leveraging smart payment orchestration controls, hotels can set rules to automatically select the appropriate payment method based on factorssuch as value, location, or transaction type. As an example value threshold, the default payment method for an event payment over £5000 GBP can be through open banking, but card (or both) can be offered for transactions that fall under that threshold. This strategy not only streamlines operations but also leads to significant savings on transaction fees and operational costs. With open banking, hotels eliminate card fees and the complications of manual bank transfers and cheques, while also reducing fraud and chargebacks. This makes open banking an ideal solution for high-value transactions such as large events, conferences, and weddings. According to a Prommt report, the largest single transaction for a corporate event via open banking has been £21,490 GBP. Typically, the average transaction value of an open banking payment is four times that of card payments.

Strategic investment in payment technology empowers hotels to reduce no-shows, late cancellations, and fraud. With a premium payments solution, hotels can collect advance payments, manage outstanding charges, and handle high-value event transactions – all while prioritising compliance, cost-effectiveness, and security. Hotels can streamline guest payment journeys, reduce time spent chasing payments, and ensure fast, secure, and compliant transactions that mirror their brand identity.