When travel slowed during the pandemic, hotels adopted online check-ins and keyless entry to accommodate the increased customer demand for contactless service. The 2021 Hotel Payments Insight Report looks at the impact of those innovations and changes in customer payment preferences.
The COVID-19 pandemic had a dramatic effect on hospitality businesses, with the hotel industry experiencing a major setback. In March 2021, for example, U.S. hotel occupancy dropped to 53%, and revenue per available room had declined by 32.5%.
As corporations and government entities implemented remote work policies and canceled most business-related travel, consumers switched to leisure trips. Hotels with onsite restaurants that cater to their local communities introduced outdoor dining, delivery, and pickup to fill the gap left from business travelers.
Consumers chose to limit in-person interactions and turned to contactless and digital payment methods, many of which will be expected to continue post-pandemic due to the speed and convenience they bring to reservations, check-in, check-out, on-site purchases and delivery.
We sought to understand the impact of the pandemic along with the latest consumer payment method preferences in our inaugural 2021 Hotel Payments Insight Report, conducted in July 2021.
The pivot to leisure and work-from-anywhere travel
Hotel data and analytics firm STR is projecting that about 1 billion U.S. hotel rooms will be booked this year, up from 829 million in 2020, but still below the record year of 2019, when guests booked 1.3 billion rooms.
Hotel business-travel revenue for the year is expected to fall more than $59 billion compared with 2019, according to a report released last month by the American Hotel & Lodging Association. With corporate travel lagging, revenue per available room is not projected to return to pre-pandemic levels until 2023.
We asked our survey participants – all of whom had stayed at a hotel in the previous 12 months – the purpose of their most recent hotel stay:
- 67% of consumers reported leisure
- 10% traveled for business
- 21% combined business and leisure travel
The flexibility that comes with working from anywhere is changing weekend travel patterns to include Fridays and Monday as remote employees choose to work from a hotel on those days.
Reservation preferences split across generations
Most consumers surveyed, 55%, regardless of age group, opted to make reservations directly through a hotel’s website or mobile app. Third-party booking sites were a close second, but only for those under age 50.
When making reservations, credit cards are preferred by participants aged 51-65, while younger consumers opt for debit cards. Just over 40% of participants – mainly younger consumers – expressed an interest in paying via money transfer apps like Venmo®, Zelle® and PayPal®, as well as with digital wallets including Apple Pay® and Google Pay®.
About two-thirds of participants are members of hotel loyalty programs. For the vast majority, these loyalty programs do influence the way they book, with 66% specifically looking for hotels with their preferred loyalty program.