Set aside for a moment the recent news that the Omicron variant is the latest coronavirus threat, and signs are emerging that the long night of the pandemic may be lifting. Such a development will be welcome news for the travel and entertainment industry. PYMNTS found that more than half of consumers are “very” or “extremely” likely to stay in a hotel in the next year, and nearly half are ready to visit an attraction or attend a concert or sporting event. Still, hotels and attractions will have to work to win this business, and they can aid their cause with flexible cancellation and refund policies.
These are among the key findings from Merchant Refund Policies: Keeping Travel And Entertainment On Track, a PYMNTS and Fortis collaboration. The report is based on a survey of 2,133 United States consumers between Sept. 8 and Sept. 21, 2021. We looked at merchants’ cancellation and refund policies in the travel and entertainment business and the policies’ effect on customer loyalty. We sought information about consumers’ reactions to hospitality service providers’ cancellation and refund policies, whether the policies affected their interest in using these services again and their level of interest in doing business with providers with more lenient, consumer-friendly policies.
More key findings from the report include:
Forty-four percent of the adult population in the U.S. — a projected 113 million people — booked reservations at hotels, attractions or live events between September 2020 and September 2021. More than half canceled. Of consumers who canceled their reservations, 49% sought reimbursements from their credit card issuers via a chargeback, while 34% sought refunds from the provider of the hospitality service — typically a hotel, an attraction such as an amusement park or a venue hosting a concert or sporting event. The method a consumer uses to seek the reimbursements affects the speed they are repaid and the amount they receive.
Seventy percent of consumers who canceled bookings with attractions and received a full refund say they are “very” or “extremely” likely to use them in the next year. Refunds for events are even more important to consumers, as 76% of respondents who received full refunds for events say they are “very” or “extremely” likely to attend them in the next year.
Forty-four percent of consumers who are especially likely to make purchases for attractions and event venues in the next 12 months say they are “very” or “extremely” likely to visit venues with hassle-free cancellation and refund policies rather than those with more restrictive policies. The findings suggest that if hoteliers, concert promoters, arena managers and amusement park operators want repeat business, they must be flexible regarding cancellations and refunds.
Two years of uninterrupted upheaval for the travel, hospitality and entertainment industries have put into question any executive’s previous certainty about what a sustainable and profitable post-pandemic business model might look like. Understanding evolving consumer sentiment and preferences and forging customer trust and brand loyalty can help businesses achieve stability and long-term growth. PYMNTS’ research demonstrates the importance of implementing flexible cancellation and refund policies as part of these organizations’ strategy moving forward.
To learn more about travel and entertainment merchants and their reservation and cancellation policies, download the report.