The Strategic Role of Payments in Hospitality & Travel

Since joining Stripe as Hospitality, Travel and Leisure Lead at the start of 2022, I’ve taken on a mission to shine a light on the innovation happening in the payments space.

Staying ahead of traveller and tech trends and putting payments at the heart of everything you do opens up pretty exciting revenue growth opportunities.

So here’s the good news!

I’m going to be sharing with you a series of articles to highlight just how strategic payments are to your business and to give you some tangible examples of innovation that might just inspire you to take that leap.

The role of innovation

For me - there’s two layers of innovation to consider.

Firstly, at its core - innovation is about the discovery of new and creative ways to solve business/customer problems and identify growth opportunities. As a travel or hospitality business - adapting and accelerating your business should be central to what you do. That might mean moving into a new country, a new customer segment or evolving a product to meet the constantly evolving needs of your customers.

Secondly, moving beyond ‘core’ innovation is all about looking to the future; it has a key role to play in proactively positioning, preventing and protecting your business against likely future growth  and threats, even when it feels like a bigger leap into something new.

The business case for embracing innovation is undeniable; not only do you ensure you don’t lose customers but it empowers you to increase revenue, decrease costs and power up your profits.

But there’s also an often-overlooked and far less glamorous advantage! And that’s increasing back office productivity. Introducing automated processes and reporting through innovations like Robotic Process Engineering (RPE) can significantly reduce the amount of time payments processes take and enable your teams to focus on more strategic, human-led tasks. Stay tuned because I’ll be exploring how driving operational efficiency can reduce costs, later in the series.

Indeed, there’s always a tension when it comes to innovation. It feels expensive and risky but it doesn’t have to be. Identify and place a few bets on small but scaleable opportunities. Move forward in the acceptance that returns will be low at the start and that you won’t always get it right. But celebrate your learnings and your small returns in year 1, then scale your successes! That success will compound.

The goal of these articles

My mission for this series is to highlight the various ways we at Stripe have been able to empower travel and leisure companies to innovate - by rapidly building new business models, by adapting to continuously changing travel patterns and traveler preferences … and diversifying revenue streams as macroeconomic conditions change.

For example, Airbnb was one of the very first travel companies to partner with Stripe and our new product, Link. This allowed their customers to save time at checkout as they don’t need to enter payment information and can instead ‘pay by bank’ as easily as they would with a credit card. What’s more, once those details are saved, guests can use Link to quickly make bank payments for all future bookings. You can learn more about this in my interview with PhocusWire.

The businesses that are best able to stay ahead of relevant trends and adapt will not only survive, but differentiate themselves by providing a better customer experience. So throughout this series, I’ll be digging into payment trends in the travel and hospitality industry - like new local payment methods, digital currencies and wallets, omnichannel payments, digital tipping and memberships.

And here’s another story to motivate you: as the pandemic hit in 2020, our client TravelPerk doubled down on innovation and investment, when most other businesses were playing it safe. By growing their product and engineering department by over 250% they generated incremental revenue by providing a better experience for their customers and scaling that customer-base because they continue to surprise and delight.

To TravelPerk innovating means constantly focusing on what the customer wants and adapting, to deliver exactly that. In the words of Huw S. , COO: “Working with businesses like Stripe enables us to do that because we don’t have to invest a ton of our time in managing payment rails. It’s already done for us. The modern tech stack enables businesses like ours to focus on our customers, which is what we want to do and why we exist.”

A vision for the hospitality and travel industry

My vision for the future is that innovation in hospitslity and travel becomes bolder, faster and easier - so leaders can create meaningful and profitable partnerships with partners and suppliers. There’s greater trust, confidence, better relationships and money to be made from leveraging innovation in partnerships.

Building closer, more effective relationships with partners and suppliers allows you to build a more holistic view of your guest spending journey and overall trip experience, with an all-encompassing view of the payment data.  Our customer, FareHarbor is a great example of collaborating with Stripe to facilitate a seamless payment experience for their partners. Lavinia Voicu, senior product manager at FareHarbor has this to say about their approach to customer-centricity:

"For our clients who are using FareHarbor to help run their businesses, we want to provide everything they need to be successful—from creating and adjusting customer's bookings, to quickly checking them in, to easily verifying their business schedule—and give them the flexibility to do all of this no matter where they are.”

Innovation becomes a lot easier when you’re investing in long-term relationships with the right strategic partners. For international travel and hospitality companies - the world of global payments (like taxes, compliance and regulation) is a complex and ever-changing beast. The vast hidden costs that come with staying on top of all these moving parts could be better spent with strategic payments partners, so you can focus on the areas of business you’re best at.

What’s next

So I hope you’ll join me throughout this series, to explore the strategic nature of payments and how embracing innovation can stop you leaving money on the table. Today, every business is an international business; I’ll be delving into how removing payments friction from customer experience means you’ll only ever elevate their traveller experience rather than restrict it. Last but by no means least, I’ll be taking a look at how customer experience builds loyalty and trust, which in turn drives new and repeat revenue opportunities.

So make sure you click the bell on my profile to get notified when I release each article. And in the meantime, let me know in the comments the business challenges you’re facing in the travel and hospitality industry?