In today’s ever-evolving digital landscape of driving direct bookings, it is important for hotels to simplify the booking journey on brand websites to drive more conversions, and ultimately more revenue. One such innovative solution that has gained traction in travel and hospitality — especially among online travel agencies (OTAs) Booking.com and MakeMyTrip — is the ‘Buy Now, Pay Before Check-In’ (BNPBC) feature.
What is Buy Now and Pay Before Check-in (BNPBC)?
BNPBC is a payment feature that allows guests to make a reservation and pay the amount later — anytime before the check-in date. While booking a hotel online, guests can pay nothing, or pay a small amount to confirm their booking. They can later pay any portion of the remaining amount before check-in — these rules can be configured by the hotel. This, therefore, helps the guest to spread the cost of the booking into various parts. This is a win-win for both hotels and guests. We have also observed OTAs leverage BNPBC to drive more conversions. Usually when people travel, they prefer not to have a significant amount of money blocked with the hotel. Therefore, by allowing travellers to defer payment until check-in, OTAs have been able to capture more bookings that might otherwise have been lost due to hesitations over high, upfront booking costs. It also reduces the risk of last minute no-shows associated with ‘Pay Later’.
Why is BNPBC important in driving conversions?
Payment is the final step in the booking journey. Remember, significant effort has gone until this point to get the guest to select the hotel & its offering over the competition, and drive them to our website. And, in this scenario, the booking intent of the guest is extremely high. At our company, we have observed the BNPBC feature do wonders for our customers:
—Boost revenues by nearly 20 percent: Since guests can book without payment or pay just a fraction of the entire amount, they are more likely to make a booking. Therefore, hotels are now driving more direct bookings through their brand website.
—Reduces the risk associated with ‘Pay at Hotel’: Once guests pay a certain amount, they are more likely to commit to their booking versus if you only offer them ‘Pay at Hotel’. As guests pay zero to only a fraction of the entire amount at the time of booking, they must also confirm their reservation by again paying either all or a part of the pending payment before check-in. Therefore, this can be a strong lever to help hotels drive more booking conversions especially during lean days or low-occupancy season, when rooms need to be filled.
—Automate payment collection: Previously, hotels would manually follow up on payment and then manually cancel bookings for those who did not pay. Or they would struggle with failed transactions. This would result in significant work for the front desk. The good news is that this can be done by the system. Guests will now receive constant reminders and customised messages to ensure that they complete their payment before check-in.
We believe BNPBC will help hotels ring in more direct bookings, reduce the risk of no-shows, and significantly help hotels during shoulder and off seasons. Since hotels receive upfront payment for the booking, any challenges with the guest’s repayment plan will also be handled by BNPBC providers.We are committed to giving hotels technology that is similar to OTAs. Therefore, incorporating BNPBC into your hotel’s marketing strategy is another step in that direction and will help you enhance your hotel’s online brand presence and drive more direct bookings.
The author, Tarun Goyal is the Founder & CEO of Simplotel. The views expressed in this article are those of the author and do not necessarily represent those of ET HospitalityWorld.
