"With travelers knowing that payment for the stay is already in place, they appear to be less likely to cancel at the last minute," the spokesperson said. The no-show rate also dropped an average of 15 percent following deployment. Travelers under virtual card programs also tended to book trips 11 days prior to travel, whereas they'd booked an average of 8.5 days in advance before virtual card implementation. Travelers under virtual card programs tended to book more price-sensitive regional and local hotels with bookings in this hotel segment increasing from 30 percent to 40 percent following virtual card implementation. Although the main finding of the report actually showed that the use of virtual cards drove down the average room rate paid by the corporate bookers by 12 percent, the results also revealed several other benefits of the impact of accepting virtual cards for hoteliers as well. In 20, research by HRS evaluated 30,000 hotel bookings for 12 corporate clients that implemented virtual card programs with AirPlus or American Express. So they’ve always helped facilitate bookings and even the new wave of neobanks continue to get in on the virtual card act - Revolut recently launched disposable virtual cards that are destroyed after each signed for those shameless moments when you find yourself about to pull the trigger on a purchase from a dodgy-looking site…
The OTAs found them particularly handy as they can be made available only for the day of arrival and can be charged for a specific amount and for just a single use. When they arrived after 2000, they offered a payment solution for those who didn’t have corporate cards and they helped reduce fraud, time filing expenses and time reconciling transactions.
Virtual cards were always touted as a benign financial innovation for hospitality businesses and, on balance, they have been. It all revolves around virtual cards and those dastardly OTAs and, frankly, there’s nothing we can do to stop them. Your card transaction fees are about to go up from September - probably without you knowing - and here’s why.
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