Virtual payment formulas provide direct savings on the housing line item

Virtual payment solutions for business travel not only help travelers and streamline accounting processes, but also have an immediate impact on direct costs, according to a study by HRS. In the case of hotels, the average price per room decreases by 12% for one-night stays.

The ‘Savings Throguh Transparency’ document, recently published by HRS, analyzes more than 30.000 hotel bookings made through its platform, divided equally into bookings made before and after the introduction of a virtual payment solution.

One of the great advantages of this formula is that companies receive and settle invoices in a centralized way and without wasting paper. The amount is transferred by means of a credit card generated at the time of booking, so the traveler no need to pay in advance, or prepare travel expense reports.In this way, companies are provided with total transparency regarding accommodation expenses and even the smallest detail is detailed. While companies have long been aware of the indirect savings generated by this process, there are a number of direct benefits, according to the study:

• The average price of rooms booked decreasedó after the introduction of a virtual payment solution; specifically from 112.3 € to 98.6 €, which represents a decreaseón of 12 %.

• The no-show rate, which generates additional costs for the company, also fell, from 4.1% to 3.5%. Hotels, for their part, can better manage their inventory.

• Travelers made their one-night bookings 2.5 days earlier, i.e. in the 11 days prior to arrival, instead of the 8.5 days recorded in the previous study period.

The cost reduction in the average index is due to two factors. First, the forward booking is a key cost-saving factor in the face of higher room rates when trade fairs and exhibitions are held. 

Second, the data show a shift in bookings from independent hotelsto the detriment of global hotel chains, and favoring local and regional hotels. In those hotels, the percentage of bookings before the solution was implemented was 30% and, once implemented, increased to 40%.

As Christian Gall, vice president of payment solutions at HRS, points out, "the transparency generated by virtual payment solutions seems to influence customers' decision to stay at less expensive hotels. In effect, their behavior is changing and they are saving money without even realizing it. This adds a new dimension to the debate on the benefits of virtual checkout, as the focus has been mainly on indirect savings so far.

 

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