Expect Hotels to Mimic the Airline Payments Playbook as They Fight to Get Paid by Agencies
Skift Take
Many guests pay travel agencies in advance for hotel bookings. But some agencies hold the money until weeks after a guest has checked out. Many hoteliers want to get the payments sooner. They could learn a few tricks about that from airlines, which have tamed the payments monster.
Payments processing has emerged as another headache for hoteliers and travel agencies hit hard by the coronavirus pandemic. Many hoteliers and other companies in the travel sector have discovered that today's business-to-business payment methods expose them to a high risk of not getting paid.
The crisis has made it riskier for hoteliers, in particular, to accept reservations without measures to ensure they receive money. The share of guest stays that travel agencies don't pay hotels for has gone up due to the rising instability of some third-parties. Hoteliers are struggling and don't need extra losses. Yet travel agencies are also affected because they face risks as many hoteliers flirt with insolvency.
So some hoteliers and travel agencies are re-evaluating their processes for getting paid.
Hoteliers could take inspiration from airlines, which have cut down on the peril of third-party non-payment after a traveler makes a reservation. Airlines insist that all payments between travelers and agencies and between agencies and the airlines take place practically at the moment that a guest books a flight. That process reduces the risk of non-payment for airlines. If the agency or airline goes bankrupt, the traveler is typically protected by their credit card issuer
