Wednesday, November 6, 2019
A new study, Hospitality 2020+ The Reasons Why We Talk About Data-Driven Commerce, published Nov. 5, 2019, by secure commerce technology provider FreedomPay, portrays a prospering but fragmented hospitality market with substantial room for improvement in IT infrastructure and technology integration. While many hotel, lodging, travel and food and beverage businesses have benefitted from online services and increased consumer spending, they are also competing with Airbnb and other technology startups, researchers found.
“Poor IT performance and guest data fragmentation is an immense drag for hospitality businesses,” researchers wrote. “It restricts their growth and leads to data islands within federated functions (e.g. CRM, ERP, BI, Web analytics) making it impossible for stakeholders to get a clear ‘single view’ of their business, let alone the consumer.”
User-friendly apps, online booking and check-in, advance ordering, and e-loyalty programs are impacting the $525 billion global hotel industry, where annual U.S. revenues exceed $200 billion, according to the study. A holistic approach that combines front-end improvements with back-end functionality can help merchants meet customer expectations and improve return on investment.
With changing data regulation and guest expectations, hospitality merchants need to update their technology and strategies to deliver an ultra-convenient customer experience. FreedomPay founder and CEO Tom Durovsik said, “Across the hospitality sector, this report clearly highlights the advantages of having a truly data driven customer centric strategy that provides fully integrated solutions via a single payments platform across in-store, online and on-mobile.”
Durovsik additionally noted that commerce has evolved from a transaction-led business to more complex social relationships between merchants and customers. Legacy service providers were born out of a payments-as-a-transaction business, he stated. Conversely, emerging fintechs are pure play solution providers that integrate and track data throughout the customer journey. By playing together, these two halves of the brain can solve complex problems, he stated.
Christopher Kronenthal, president and CTO of FreedomPay, agreed that relationships between advanced technology providers and traditional acquirers can be mutually beneficial. “Hospitality organizations can no longer allow outdated legacy providers to hold them back and must act now to assimilate important functions into data driven connected digital architecture,” he said. “The vast majority of processors simply cannot keep pace with advancing technology.”
Online booking platforms, mobile-apps and other consumer-friendly technologies have made it easier for consumers to search venues offering the best value, location and service reviews, according to the study. Kronenthal also noted that using commerce platforms to directly engage with consumers can save merchants up to 20 percent. An open, integrated platform can drive data to and from non-sales facing hospitality functions, reducing cost, improving customer experience and enhancing loyalty and long-term profitability, he added.
“A commerce platform provides a viable opportunity to achieve this with minimal risk and disruption,” Kronenthal said. “In addition to managing transactional data from real-time interactions across multiple booking and sales points (POS), they are able to deliver a clear understanding of what is happening and why – not just within the purchase journey, but across all industry silos to reveal the key factors and experiences that are influencing decisions.”
The full report is available at campaign.freedompay.com/hospitality/report/?utm_source=pr&utm_medium=referral&utm_channel=referral&utm_content=hospitality-release&utm_campaign=leadgen-hospitality-hospitality-release-fy19q4-global
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