By 2021 – about a year from now – over 20 percent of all payments globally will be made with a mobile wallet. As usage grows, brands are responding with expanded mobile features and more end-to-end experiences. Things are really taking off in the travel and hospitality sector, where everything from foreign exchange to foreign language is now being addressed in-app.
Payments are at the heart of connected commerce for travel. This fact was recently illuminated by a Booking.com finding that 20 percent of customers will bail on a booking they’ve begun if denied usage of their preferred alt-pay method. As the saying goes, it won’t fly.
That’s just a taste of the January 2020 Travel and Hospitality Commerce Connected Playbook, a PYMNTS and First Data (now Fiserv) collaboration, which delves into how generational and cultural preferences are reshaping travel experiences and how we pay for them. At this point in time, two influential groups – western millennials and Chinese tourists – are having far-reaching impacts on how brands and destinations cater to top travelers. Winners and losers in the next couple of years will be determined by how well they understand travel payments.
Payment as Differentiator
Travel players on the leading edge are vying to stay there through payments innovation. As detailed in the latest Travel and Hospitality Commerce Connected Playbook, Airbnb lost its original “only game in town” advantage, as hotels have started offering more immersive experiences. The homesharing pioneer has fired back with new features like Pay Less Up Front, which enables installment payments for vacations. Roughly 70 percent of users have already tried it.
On the hotel side, we’re seeing things like French chain Accor linking up with Alibaba and its Fliggy platform for a breezy booking experience, and the ability to settle up with Alipay payment options. It also adds functionality to the Accor Live Limitless (ALL) loyalty program.
Travel and loyalty go together like champagne and first-class. For example, the World of Hyatt mobile app is already beloved by members, more so now that Hyatt has added more ways to manage account details, track tier status and redeem rewards. The work never stops, according to Jayson Canady, director of global payments strategy for Hyatt. “As we look to expand payment options for our guests and customers, we are evaluating a number of key factors, including new technologies, purpose of travel and consumer expectations for increased flexibility,” Canady said.
The $1.4 Trillion Vacation
Millennials will spend an estimated $1.4 trillion on travel and adjacent experiences in 2020, by the end of which they will make up half of all hotel guests in the world. Here’s the thing about millennials: They hate outdated and outmoded loyalty programs, and will drop a brand over it.
For that reason, the action is in seamless bookings and easy payments, ideally in-app. But it goes beyond convenience to the experiential ecstasy that these travelers expect. If you’re going to use their data for anything, they want it used to personalize their trip. That means active and carefully selected partnerships with creative ways to redeem points, custom offers and more.