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ADVICE: What payment options should you offer your guests from abroad?

Attracting guests from abroad is big business, and as the UK tourism industry continues to expand, much of this growth will be down to a boom in tourists, particularly from newly emerging markets.

For one, the recent state visit of China’s President Xi has made Britain a top aspirational holiday destination for the Chinese middle classes, with both London and Manchester expecting an increase in visits.

For hotel owners, this presents both an opportunity and a challenge. After all, if your hotel isn’t flexible and can’t cater to tourists from abroad, you might miss out on this new growth. The key difference now is the influx in visitors who are more likely than ever to be visiting Britain for the first time, perhaps even going abroad for the first time, and coming from places with customs perhaps quite different to our own.

In the face of this, hotels need to be ready to offer choice and solutions that fit the needs of their new guests. This might include providing menus and hotel information in multiple languages, or training reception staff to better deal with different requests and expectations. This should also crucially include payment options.

When checking out, most guests will want flexibility and options when it comes to paying their bill. In particular, when paying with debit or credit cards, guests from abroad may well want the option to pay either in currency or in their home currency. Different options will suit different guests which is why it is so important that both are provided.

Some guests will be happy to pay their bill in the currency of the country which they are in, in this case in GBP. If they have set themselves a budget in GBP for their holiday, this might work best for them. They will therefore pay essentially what the cost of the hotel stay was in isolation. Additional fees from card providers or banks will then be added on later for use of cards abroad, although these might not be charged to the customer for another day or so.

Alternatively, hotels can offer their customers the additional service of dynamic currency conversion, or DCC, which gives their guests the option to pay their bill in their home currency. This will be the currency which they feel most familiar with, and so guests who may not be particularly familiar with the GBP exchange rate will quickly understand the cost of their stay. If they are budgeting in their home currency, this option might also suit them better.

When DCC is selected, the additional fees of banks or card providers are replaced by a DCC charge. The key difference is that these fees appear as a part of the initial transaction. Rather than being charged as additional fees later on, the customer will see the DCC fee included in their bill at the point of transaction. This might help them to better understand the full cost to them of their stay.

Additionally, when DCC is selected, the hotel owner takes a margin of the DCC fee, which they can then use to either improve their service for customers from abroad, or pass on as a saving to their guests.

As the number of guests from abroad continues, the most entrepreneurial hotels can expect to win big by offering flexibility and choice. No one option is right for all customers, but by offering choice, hotels can make their guests feel at home while abroad, ensuring a great experience and a better chance of a return visit.  

About the Author

Gino Ravaioli is chairman of the DCC Forum, a group of five international companies working to help you understand what DCC is and to ensure that when DCC is available, it is offered to you correctly and in a clear and transparent manner.

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