With 44% of America’s adult population saying they will use planes, hotels and attractions in the coming year, and after the beating the tourism industry has suffered from the pandemic, travel brands are betting on great experiences to trigger a total rebound trip.
Unfortunately, many travel experiences are anything but good. Just ask the millions of travelers who found themselves grounded in late summer and fall as major airlines canceled thousands of flights, giving little to no information on refunds. . In short: bad customer experience.
These and related topics were part of PYMNTS ‘latest On the Agenda series during a panel discussion featuring Best Western Head of the Treasury Bryan kleinlein, Fortis chief technology officer Kevin shamoun and Hotel actions Senior Vice President of Finance and Compliance Carlos melgar.
All three panelists agreed that companies need to strike the right balance between strategy and empathy when consumers cancel their trips or request refunds. They also need to get smarter at digitally handling chargebacks and disputes arising from travel plans gone awry.
Acknowledging that a rebound in travel is underway – despite continued disruptions due to COVID-19 variants – Kleinlein said: âWe have really worked with our hoteliers and as a company to make the cancellation policy a bit more forgiving and work with everyone. “
Noting that a rebound in bookings also leads to a new flow of cancellations and chargebacks, Melgar said, âIt’s about empathizing with your guests and relaxing your cancellation policies a bit. But you really have to be strategic in how you do it. Once the horse is out of the stable all of a sudden you are dealing with a lot more than you needed. “
Shamoun added that “the best job you do as a property documenting these situations, when a chargeback occurs, you are more likely to win. At the end of the day, the card brands are trying to be fair.
Getting it wrong is expensive, not to mention damage to reputation. According to the study Merchant Refund Policies: Keeping Travel And Entertainment On Track, a collaboration of PYMNTS and Fortis, âAlmost a third of the population of the United States has booked hotel rooms or tickets to attractions or resorts. events in 2021. More than half of this group, a representative of 60 million people, canceled their reservations, and most of them wanted their money back.
Get the study: Keeping travel and entertainment on track
It’s all in the way you book
All panelists said they were seeing a strong recovery in leisure travel, with businesses still lagging behind.
âHow the reservation occurs is important as it will impact the ability to cancel,â Shamoun said. âIs it directly on the brand’s website or via a travel agency? “
Melgar added that hotels “determine what they owe [online travel agencies] and the booking agents there. If you don’t want to make your inventory available, you’ll just rely on your brand’s reservation system and transient traffic. Unfortunately, this is not the world we live in. You live and die according to the amount you allocate to your third-party agents.
Kleinlein noted that with 45% to 50% of chargebacks from fraud, whether it is genuine fraud or alleged fraud, travel and hospitality companies must double the number of these disputes.
âYou can do things like 3D Secure, for example, where there’s authentication happening with the issuer, so now you can’t pretend it’s fraud because you’ve authenticated yourself. in another way, and you made the transaction, âShamoun said. âThere are different things from a processing standpoint that can be done to reduce someone’s ability to claim fraud. “
See also: Hotel cancellations up 35% due to virus variant
Loyalty tips the scales
With the travel economy undergoing a sort of ânew mathâ transition, industry players have varying approaches to tackling chargebacks, but the three panelists agreed on the fundamentals.
âIt’s all about how you manage your income and how you manage that rate of return strategy regardless of your markets,â Melgar said. âIt does not matter whether it is a secondary, tertiary or metropolitan market. It’s about managing it.
The Merchant Refund Policies study revealing that 70% of consumers who won a chargeback dispute are likely to change reservations with the same supplier, it comes down to the customer experience, which raised questions about when not to struggle against chargebacks as a strategy.
âIt’s definitely a real cost,â Kleinlein said. âIt takes a lot of time, paperwork. But I’m a finance guy. It’s all worth fighting for, but there’s obviously not much you can do. You are trying to win over the ones you can.
Panelists aligned themselves with the idea of ââdifferentiating chargebacks from refunds as a way to unravel cancellation issues without jeopardizing loyal customers.
“If we can do it, and we can and there are good reasons for it, I think [a hotel] would like [to] issue refunds, âMelgar said. âThe guest is going to come back – they are loyal members of the Hilton Honors program or whatever the rewards program; he is a loyal customer. But when chargebacks come up, it’s a whole different refund.
Loyalty helps balance the chargeback equation somewhat, as program members stick to the travel and hospitality brands that they have had good relationships with over time.
âI don’t think guest expectations for a hotel stay have changed so much,â said Melgar. âI think they are what they were before 2020. I think it’s about the quality for the dollar you pay in terms of recreation and consistency. If you go from one Fairfield to another or from one Curio or Autograph to another, they want consistency.
See also: Senate committee hearing puts airline chiefs in the spotlight over cancellations, staff shortages