COVID-19 has undoubtedly had a massive impact on the hospitality industry, including an estimated loss of $4.5 trillion in revenue, but as we move into the second quarter of 2021, there are signs of life at the end of the tunnel. An increase in vaccinations and reopening plans in several regions worldwide have signaled that the industry is on the upswing. The increase in demand will likely be a net positive for hotels and agencies, but what can companies do to prepare themselves, especially when it comes to hospitality payments and uncovering analytic insights?
Onyx recently hosted a webinar – presented by SVP of Commercial and Strategic Relationships Tony Wagner and VP of Product Knut Erik Rief – that discussed hospitality payments and analytics and how to utilize both to navigate recovery.
The webinar can be accessed here, but the key takeaways are outlined below.
Current State of Travel
Following a significant RevPAR drop in 2020, the first quarter of 2021 trended positively, according to Statista. There were other signs of growth evident in the market as well.
- Choice Hotel’s portfolio achieved average weekly occupancy rates of over 70% since the pandemic began
- In January, Hilton’s lead volume was up 35% versus the fourth quarter of 2020
- TSA Throughput as of February 2021, representing a 3.6% increase over the previous month’s numbers
One key for hospitality professionals is to study data in aggregate. No single metric will provide a full picture, so it’s important to take a holistic look at all data sources before applying the numbers to any business decisions.
Insights from Onyx
Since the onset of COVID-19, Onyx has committed to monitoring industry trends and using that data to help hoteliers and agencies gain insight into recovery – particularly with the Skift Recovery Index.
In monitoring those trends, a few notable items stood out.
A global view of new confirmed COVID-19 cases compared to commissionable and non-commissionable room stays shows that throughout later 2020 and in early 2021, while COVID-19 cases rose, stay transactions remained somewhat consistent. This is likely due to the fact that many people are experiencing pandemic fatigue, leading to an increase in travel demand. The rise in the number of vaccines being rolled out is also expected to have a net positive impact, helping travel to rebound.
In addition, Onyx showed a view of vaccination and TSA throughput data compared to Onyx stay transaction data. In both cases, stay transactions followed expected trends. As more vaccines rolled out, more travelers passed through TSA checkpoints and stay transactions followed. As mentioned, this is likely a result of pent-up demand and rises consumer confidence.
The Future of Hospitality Payments and Analytics in Recovery
In order to successfully navigate recovery, hoteliers and agencies will need to leverage data in new ways and explore ways to optimize processes. The state of the industry and the needs to consumers have shifted greatly, so companies that adhere to the status quo will likely be left behind.
Expand contactless options, particularly with payments. With safety a top priority for guests, it will be necessary for hoteliers to reassure them that measures are in place. In addition to enhanced cleaning procedures, explore additional payment methods that customers can use to provide additional peace of mind.
Analyze guest segments to optimize booking strategy. In a post-COVID environment, guest expectations are changing rapidly. The best way to ensure that your property is meeting their new expectations is to ask them. Using the feedback, you can then adjust any advertising or marketing strategies and provide experiences that are relevant to customers.
Focus on cash flow. With a year of travel disruption, revenue recuperation will be a top priority for many agencies. Booking more trips will help with bringing money in, but making sure that commission payments are being received will help maximize cash flow.
Analyze hotel partner performance. While agencies work to ensure clients are receiving top-tier customer service, they should also be getting the same level of care from partners. Keep an eye on your commission data to monitor trends in time-to-pay and payment accuracy, as this will provide insights into hotels that you should prioritize.
The road to recovery will be long – in fact, many experts are anticipating that a full recovery won’t happen until 2023 or later. But implementing the hospitality payments and analytics tactics discussed, along with partnering with vendors that can help streamline parts of a hotel or agency business, hospitality businesses can set themselves up for success in the long term.