customer first: putting the hotel guest at the center of your payment strategy
TRANSCRIPT
Customer first: putting the hotel guest at the center of your payment strategy
Webinar 21 May 2015
Your hosts
Nick Vivion Global Events Lead & Moderator Tnooz
Gene Quinn CEO & Producer Tnooz
Your presenters
Mike Carlo Head of Travel Solutions WEX, Inc.
Peter Turco Author & former Payments Leader Starwood
Poll no. 1 Where are you located?
Poll no. 2 Which industry segment do you represent?
CONFIDENTIAL AND PROPRIETARY
Customer First: Pu8ng the hotel guest at the center of
your payment strategy Mike Carlo, Head of Travel Solu3ons, WEX Inc.
Peter Turco, Former Payments Leader, Starwood Hotels
CONFIDENTIAL AND PROPRIETARY
Today’s discussion…
7
More conversa+on. Less presenta+on.
Discussion topics:
• Property-‐centric payment strategies • Prepaid vs. Postpaid • Current process flow and the role of OTAs
• OpKmal rouKng, currencies and AFOP • ComplexiKes and benefits of change • Modifying the compeKKve landscape
Importance of B2B payment processing
Hotel transac3on processing historically Customer-‐centric payment strategies
CONFIDENTIAL AND PROPRIETARY
A Dutchman, an American and a Brasilian walk into a hotel…
How it has been…
8
An American customer
traveling to a US hotel
A European customer
traveling to a US hotel
An American customer
traveling to a European hotel
Property-‐centric payment strategies
Poll no. 3 Have you booked a pre-paid room rate
through a brand.com hotel site?
CONFIDENTIAL AND PROPRIETARY
How it has been…
10
Current process flow and the role of OTAs
Prepaid vs. Postpaid
A PhocusWright study in 2013 showed that 20% of all bookings for hoteliers were prepaid – some through brand.com
Expecta3ons of future growth of pre-‐paid vs. post-‐pay on hotel websites
Grow a lot
Grow a little
Remain the same
Decline
Not sure
28%
41%
20%
4%
7%
Question: Do you expect the percentage of prepay booking via your website to grow a lot, a little or not at all? N=54 hotels. Source: PhoCusWright’s Payment Unsettled: Cost, Opportunity and Disruption in Travel’s Complex Payment Landscape © 2013 PhoCusWright Inc. All Rights Reserved.
CONFIDENTIAL AND PROPRIETARY
How it could (should) be…
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Customer-‐centric payment strategies
How would this look in its ideal form?
From the perspec3ve of a
major global brand, how is it realis3cally
going to look?
What market(s) will drive the change?
CONFIDENTIAL AND PROPRIETARY
How it could (should) be…
12
* The hotel brand as an internal OTA
CONFIDENTIAL AND PROPRIETARY
How it could (should) be…
13
Components of a customer-‐centric strategy
Alternate Forms of Payment
(AFOP) Local
currencies (lessons learned from OTAs)
Op3mal rou3ng
Poll no. 4 Does your company have one person (or a
team) dedicated to payment strategies?
CONFIDENTIAL AND PROPRIETARY
How it could (should) be…
Source: Hudson Crossing, Online Payments: New Paths to Profits, 2013 15
Source: Hudson Crossing, Online Payments: New Paths to Profits, 2013
US company selling in Germany Mul3currency Pricing (MCP)
Form of payment Credit card Credit card Credit card Bank transfer
Selling currency USD EUR EUR EUR
Acquiring bank locaKon US US OpKmal N/A
TransacKon amount $1,000 €768 €768 €768
Direct cost (2.7% US processing; 1.6% opKmal processing, 1 Euro flat fee bank transfer) $27 €21 €10 €1
Minus: Indirect costs: fraud/chargeback/labor (2%) $20 €15 €15 N/A
Net $953 €732 €742 €767
MulKcurrency FX conversion again (3%) N/A €23 €23 €23
Net $953 €754 €765 €790
Cost/gain $47 €13 €3 €22
EUR value in USD N/A $18 $4 $29
CONFIDENTIAL AND PROPRIETARY
How it could (should) be…
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Localize payments to target markets
Addi3onal benefits
Targeted room rates using a new form of
payment
Form of payment can indicate most effecKve upsell opportuniKes while on property (40% of revenues)
CONFIDENTIAL AND PROPRIETARY
How it could (should) be…
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Complexi3es
Changing the compe33ve landscape
CONFIDENTIAL AND PROPRIETARY
How WEX can help it be what it should be…
18
Addressing one of the major obstacles/complexiKes
associated with the ownership structure, reconciliaKon and
overall flow of funds
CONFIDENTIAL AND PROPRIETARY
Who We Are
19
CONFIDENTIAL AND PROPRIETARY
Ques3ons?
20
Thank you!
Send your questions and comments to [email protected]
Replay and presentation of webinar will be available on www.tnooz.com