How Flexible Payments are Transforming the Hotel Industry

Hotel payments have undergone a big shift in recent years. What used to be a simple transaction at the front desk, is now a key touchpoint and opportunity for hotels to empower guests with greater flexibility and control.

With the rise of loyalty programs and the emergence of new technology solutions, today’s travelers expect more options when paying for their stays. In fact, according to new data from Plusgrade, a global leader in ancillary revenue solutions, more than 1 in 5 hotel guests now prefer using a mix of cash and loyalty points to pay for rooms and additional services.

This evolution reflects a broader trend toward personalization in hospitality. Plusgrade’s recent survey of 2,000 active hotel guests across six global regions reveals that 54% are members of at least one hotel loyalty program, including 78% of US travelers.

For hotels, there’s a clear opportunity to tap into this highly engaged audience with tailored services and flexible payment options. By capitalizing on these trends, you can increase satisfaction, build loyalty, and drive ancillary revenue. Here’s how to get started.

Use Loyalty Points for Bigger Returns

With more ways for guests to customize and enhance their experience, points have become more than just a reward for frequent stays — they’re now a powerful currency in their own right.

Nowhere is this more evident than among hotel loyalty program members.

According to Plusgrade’s recent study, 38% of loyalty program members prefer to use points (or a mix of cash and points) to pay for hotel rooms, while 47% prefer to use points for upgrades and add-on services. Among members with tier status, these numbers rise to 55% and 63%, respectively, underscoring the value of this highly engaged customer group.

For decades, loyalty programs have offered a tried-and-true method for deepening guest engagement, fostering loyalty, and driving repeat business. By providing more ways for guests to redeem their points, including the ability to pay for upgrades with points, hotels can further improve the guest experience and drive long-term revenue growth.

Tailor Payment Options by Age and Region

When it comes to flexible payments, both age and region play a significant role in how guests prefer to exercise their options.

Take, for instance, the growing popularity of combining cash with loyalty points. This option allows guests to stretch their rewards further while enjoying more value and choice. According to Plusgrade, younger guests are particularly drawn to this flexibility, with those aged 18-24 being 88% more likely than guests aged 65 and older to prefer a mix of cash and points.

Payment preferences also vary widely by region. US. travelers, for example, are at least three times more likely than guests in other regions to pay for rooms using points in full. Conversely, 89% of German guests prefer paying for rooms with cash, compared to 73% and 58% of travelers in France and the US, respectively.

These numbers highlight the importance of offering tailored payment options that align with both age and location, thereby better meeting the diverse expectations of guests.

Maximize Upsells with Bidding

Bidding for upgrades is another innovative way for hotels to offer guests more flexibility and control over their experience while maximizing revenue potential.

Instead of fixed upgrade fees, bidding lets guests name their price for premium features like spa services, a better room view, late check-out, and so on. This keeps guests engaged and makes them feel like they’re getting exclusive deals at a value that fits their budget.

Despite its promise, fewer than one-third of hotel guests are aware of bidding as an option, according to Plusgrade. This suggests a huge opportunity for hotels to educate guests and encourage participation — especially when you consider that 42% of guests would be open to bidding for an upgrade if given the chance.

By enabling bidding through a platform like Plusgrade, hotels can achieve the ultimate win-win: guests enjoy a premium experience at a price they choose, while hotels drive revenue and fill premium inventory that might otherwise go unused.

Future-Proof Your Hotel with Flexible Payments

Flexible payment options are more than just convenient — they’re strategic tools that help hotels drive incremental revenue and differentiate themselves in the marketplace. By giving guests more ways to pay for ancillaires, including loyalty points, cash-and-points combinations, and bidding, hotels can maximize upsells and create more memorable experiences for all guests.

Platforms like Plusgrade help hotels seamlessly integrate flexible payment options into property upsell and ancillary sales strategies, making it easy to meet evolving guest expectations. With these data-driven solutions, hotels can turn personalization into a competitive advantage, cultivating deeper loyalty and generating ancillary revenue.

Ultimately, hotels that invest in technology and personalization will be best positioned to stay ahead of guest expectations and drive sustainable revenue for years to come.

About Plusgrade

Plusgrade powers the global travel industry with its portfolio of leading ancillary revenue solutions. Over 200 airline, hospitality, cruise, passenger rail, and financial services companies trust Plusgrade to create new, meaningful revenue streams through incredible customer experiences. As the ancillary revenue powerhouse, Plusgrade has generated billions of dollars in new revenue opportunities across its platform for its partners, while creating enhanced travel experiences for millions of their passengers and guests. Plusgrade was founded in 2009 with headquarters in Montreal and has offices around the world. For more information, visit Plusgrade.com.