Will COVID-19 Usher in the End of Cash?
McKinsey research suggests that the recovery timeline for hotels to pre-COVID-19 levels could take until 2023 or later. Understandably, experts are looking at any and every possible solution to bring back customers safely and quickly, including a change to their payment systems.
The problem with cash
Any potential source of contamination or transmission is now under scrutiny - especially in the hospitality industry where guests could be visiting from potential COVID-19 hot spots. The fact is, cash is notoriously covered in germs; studies suggest that paper bills can contain bacteria and viruses, plus lead to the spread of disease. The lifespan of various bills ranges from four to 15 years, meaning that cash has a lot of time to accumulate germs. Studies have also shown that the influenza virus can last for up to 17 days on cash. But beyond that, the current pandemic has shown that there are also risks associated with touching PIN terminals, debit/credit cards, and even waiting in lines to pay.
Luckily, these kinds of challenges also spur innovation. By removing cash, hotels and resorts are finding technologies that offer not only cleanliness, but also a wealth of data that can be used to create a seamless experience for guests and a fully integrated customer view, allowing for a personalized guest experience which in turn deepens the relationship between hotel and customer, driving loyalty.
Cashless or contactless? There’s an important distinction.
Hotels might assume that a contactless approach is best by assuming that tap-and-go payment cards help to solve a part of the COVID-19 transmission problem. But doing so allows banks and credit card companies – not the hotels – access to valuable data/insights on guests.
A better option might be a white label contactless solution. This would allow a hotel to gain insights into guest spending habits, patterns, preferences and budgets. This data can be used to create better relationships with individual guests and strengthen their loyalty to the hotel’s brand as they can offer personalized promotions that cater exactly to guests’ personal preferences.
However, the opportunity does not stop there. If the right technology partner is chosen, there is potential not only to keep guests safe but to integrate the whole hotel experience. When payments, rewards and room access can be combined - either through RFID technology or in the hotel’s app - then the guest receives a connected experience and the hotel receives a full picture of each and every guest’s behavior.
The gradual shift away from cash-based models
While most guests do not typically pay for their rooms with cash, there are still a number of activities in the hospitality industry where cash is the main form of payment. Think: tipping wait staff or room service or at hotel restaurants and bars. However, many hotels internationally have begun phasing out cash from these points of contact entirely during COVID, not only for the cleanliness aspect, but because it streamlines operations and delivers an increase to profits - from business efficiencies as well as increased consumer spending.
Before the pandemic, many hotels still saw handovers of cash in the bar, then needed to count the tills, then needed to count everything again before taking it to the bank, a long and tedious process. Not only have cashless payments sped up the process and eliminated the possibility of human error, it also significantly cut down on the likelihood of theft and fraud. Cashless payments have also allowed for unprecedented levels of insight into guest behavior, providing detailed data on footfall, user flow, spending patterns and frequency, as well as the most popular locations or products. Proprietors can use these insights to maximize operational efficiency within the hotel.
Ultimately, the move to cashless in the hospitality industry hasn’t just helped managers and employees, but it’s also made for happier and healthier guests as well. Cashless transactions create an environment where, from arrival to departure, a guest can enjoy a freedom of movement without stop points and checkpoints. Additionally, without cash, foreign currency transactions are simplified, the risk of theft and fraud is reduced and it is easier than ever before to make purchases easy and safe.
While payment systems might not be top of mind for most hospitality professionals, the proper implementation of these solutions might just be the thing that helps guests feel comfortable returning to hotels post-COVID. Consumers are smart -- they know cash carries disease and are finding ways to avoid it at all costs. But not only are hotels eliminating another touchpoint with cashless systems, they are improving the experience for both employees and guests alike.
Quick fixes like temperature checks and hand sanitizers solve certain immediate consumer concerns, but even contactless card payments — which require strategic and commercial consideration — will simply not provide the data to empower your organization to become even more successful. Once COVID-19 becomes a lower priority for customers, what other benefits will your payment option provide? The decision needs to be made wisely.