How to Streamline Stays and Supercharge Profits

In 2020 the world, as we knew- and understood it, stopped. The coronavirus pandemic wreaked havoc worldwide and brought once thriving industries to its knees. The travel and tourism sector, along with its complimentary services, were among the worst affected. As many countries introduced travel restrictions to contain the spread of the virus, domestic and international travel significantly declined in early 2020. According to Statista, the financial repercussions of the pandemic manifested later that year when the total travel and tourism spending worldwide more than halved between 2019 and 2020, decreasing from over five trillion U.S. dollars to 2.44 trillion U.S. dollars. That being said, tourism has seen growth since 2022 and the share of gross domestic product (GDP) generated by travel and tourism worldwide in 2033 is forecast to exceed pre-pandemic figures - and hotel bookings along with it.

In 2023, the global hospitality market reached over 4.7 trillion U.S. dollars and was forecast to grow to around 5.5 trillion U.S. dollars in 2024. To capitalise on this trend, hotel management platforms are taking innovative approaches to how hotels connect with guests, offering streamlined booking processes, diverse payment options, and making it their mission to offer guests a seamless user experience. Offering diverse payment options to make it as simple as possible for customers to pay forms part of this. But offering diverse payment options and managing your payments are two different beasts. In this article, we'll explore how hotel management platforms can use Revenew to simplify and transform how they manage their platform payments.

How Embedded Fintech is Reshaping VSaaS

Not too long ago, managing a hotel meant keeping countless ledgers, making endless phone calls, and crossing your fingers that everything would fall into place. And then hotel management software came along to completely change the way many of these repetitive, manual tasks are managed. Over the last few years, hotel management software has evolved from basic reservation systems to a comprehensive arsenal of tools and features.

As these platforms grow, exploring services which could generate additional revenue is a logical next step. In recent years, there’s been an increase in API-based fintech solutions (like Stripe) that allow platforms to not only offer certain functionality (e.g. online card acceptance), but also enable them to capture a portion of these economics (e.g. payment fees). This has become an attractive lever for platforms to pull. In fact, PayPal Ventures reports that a number of vertical SaaS platforms are now generating more revenue from their embedded finance offerings than their core subscription products.

But monetising payments is not simple. How do you - as a hotel management platform - ensure that you’re pricing in a way that makes sense for you and your customers? From what we’ve seen at Revenew, platforms who have a deep understanding of their payments’ financial performance are best placed to maximise the financial upside from their embedded payments while retaining their customers through ensuring margins are fair and competitive.

The Role of Revenew for Hotel Management Platforms

As a hotel management platform, do you know your margin on every single payment? This question is especially relevant for the hospitality sector where travellers typically make frequent purchases using foreign cards, incurring higher fees due to the use of international cards plus the FX conversion fees associated with these transaction(s). The same is true for corporations who make use of corporate cards. According to this blog from Checkout.com, “interchange fees are often overlooked yet lie at the core of digital payment costs”. This is true from our experience as well - with dire consequences: We’ve seen platforms with as much as 20% of their payments resulting in a loss - amounting to hundreds of thousands of dollars in lost revenue. It’s therefore extremely important for platforms who play in the hospitality sector to incorporate high processing fees into their platform payments strategy.

To simplify this, we’ve built Revenew and its suite of tools to empower hotel management platforms with all of the insights, data, and knowledge they need to gain an in-depth understanding of their business to answer questions like:

• How many of my payments are loss-making? Why are they loss-making to begin with?
• Which customers (ie. hotels) are my most profitable/ least profitable?
• Which payment methods should I adjust to help me achieve my overall net margin goal?

Armed with this knowledge and right tools, platforms are able to easily implement intelligent pricing strategies and create advanced payment flows that cater to their unique needs without the need to do the heavy-lifting of building these capabilities in-house. This is the ethos of what we’ve built at Revenew.

Make Data-Driven Pricing Decisions

Using Revenew, hotel booking platforms can track key metrics such as revenue, margins, and processing fees in detail. Having these detailed insights into your hoteliers’ performance helps you get to grips with who is generating your platform the most revenue and what the impact on your bottom line would be were you to lose them. This enables you to make more data-driven decisions around which hotels to incentivise to increase engagement and drive loyalty.

• Gain real-time insights into payment trends: By understanding how your customers’ customers prefer to pay and how payment methods affect revenue, platforms can make informed decisions about which payment options to optimise for.
• Analyse margin health: Revenew’s analytics can flag transactions that fall below margin thresholds, allowing platforms to take corrective action quickly. We have seen platforms losing $100k+ p/a unknowingly due to loss making payments.
• Monitor the impact of processing fees on overall margins: If you’re on IC++, getting a breakdown of all the fees charged can be a headache. Revenew provides these out of the box.

Simplified Payments Reporting

Managing payment data and processing fees can be a complex undertaking. Platforms require real-time access to consolidated reports on collections, margins, fees, payouts, chargebacks, and other key metrics which are not readily available today without a lot of leg-work. From what we’ve seen, platforms who are manually compiling this information are taking at least 10 minutes per payment (see our recent case-study with leading property management solution, Noovy).

This can significantly slow down operations and the cost implications can be crippling - especially where margins are already razor-thin. Revenew’s automated reporting tools helps platforms simplify this process, allowing them to focus on delivering exceptional experiences for their hoteliers rather than getting bogged down in cumbersome administrative tasks:

• By automating the reconciliation of interchange++ (IC++) fees, platforms can minimise the risk of human error in financial reporting.
• Streamlined processes mean less time spent on manual reporting, allowing staff to focus on automating repetitive tasks for hotels and drive customer engagement.
• Revenew provides detailed reports that give platforms a clear overview of their payment activities and associated fees, helping you to define and execute a successful payments strategy.

Complexity, Simplified

At Revenew, we understand how vital it is for platforms’ tools to be in-sync with one another. Our no-code integration capabilities make it simple for hotel booking platforms to incorporate its tools into their existing technology stack. This ensures that platforms can gain near-instant insight into their payments’ financial performance.

You can connect Revenew with your existing payment processors, like Stripe or Adyen, to enable real-time data synchronisation and automated fee reconciliation. Our no-code integration makes it incredibly simple for platforms to sign up in less than 30 seconds. A video demonstration of the sign-up flow can be found here.

A World of Endless Opportunities

Vertical software markets tend to have winner-take-most dynamics, where the vertical SaaS business that can best serve the needs of a specific industry often becomes the dominant vertical solution and can sell both software and financial solutions to their core customer base. This is no different for hotel management platforms.

Embedded payments have opened up a whole new world for hotel management platforms, where we’re seeing the bulk of revenue being generated from financial services. As platforms incorporate financial services with their existing offerings, they not only increase revenue per customer (between 2-5x according to a16z), but they open opportunities in markets ****that previously may not have been accessible due to a smaller software market or inefficient customer acquisition. As your hotel management platform continues to grow, having an intimate understanding of your payments’ financial performance becomes a crucial component of your businesses’s viability and retaining customers.

By partnering with Revenew, hotel platforms can unlock the full potential of their payment processing capabilities, boost margins, and deliver exceptional experiences that set them apart from the competition. If you’re a hotel management platform and you would like to discuss how we can help level up your payments intelligence, boost your margins and improve your operational efficiency with best-in-class tools, reach out to us by visiting https://revenew.co/contact or send us an email at info@revenew.co.