Nigerian Hospitality Industry Must Increase Payment Options to Maximise Growth
The World Travel & Tourism Council’s Economic Impact Report (EIR) shows that Nigeria’s travel and tourism sector’s contribution to GDP is forecasted to grow at an average rate of 5.4% between 2022-2032.
After many months of low or no growth, the Nigerian hospitality industry is gearing up to take advantage of good future opportunities. However, customers now prefer to browse, research, and transact online and hotels must ensure they can offer their foreign customers as many digital payment methods as possible. Fortunately, there is a safe way to collect payments from international and virtual cards that can also help companies take advantage of the new business that is expected in the coming months.
The World Travel & Tourism Council’s Economic Impact Report (EIR) shows that Nigeria’s travel and tourism sector’s contribution to GDP is forecasted to grow at an average rate of 5.4% between 2022-2032, a good deal higher than the 3% growth rate of the overall economy. The report goes on to point out that this will boost the sector’s contribution to GDP to nearly ₦12.3 trillion by 2032, which represents 4.9% of the total economy.
Travel and tourism companies hoping to benefit from this growth, especially when it comes to lucrative international business tourism, must take a close look at digital payment options as part of their competitive offering.
“During the past four years operating as a licensed payment solution service provider in Nigeria, we have seen four-, three- and two-star hotels struggle to collect payment from international and virtual cards, especially from foreign customers due to limited payment facilities, and sometimes staff’s limited knowledge of payment options. This has cost hotels millions of Naira when they can’t charge checked-in guests or collect penalties for cancellations, resulting in many lost customers. Being able to charge international cards and accept foreign currencies like US Dollars will not only boost venue revenue but foreign currency inflow for the country as a whole,” says Chidinma Aroyewun, DPO Group’s country manager in Nigeria, which offers DPO Pay.
Cards are widely accepted around the world and are the preferred payment method for corporate travellers. Credit cards, in particular, offer longer payment terms, come with built-in travel insurance, accrue more loyalty points and frequent flyer miles and, most importantly, can have their spending data integrated into the company’s expense systems.
More protection for merchant and customer
Offering a card service would allow venues to take a direct booking, and, should there be a cancellation, they would still be able to apply a small cancellation fee to cover costs. However, many business owners are wary of the ever-present threat of fraud, which has made many hesitant to offer a more varied payment offering.
“A Virtual Terminal allows businesses to take booking deposits through an online virtual card terminal and manually process payments without using a physical POS device. Guests can pay in the currency of their choice. The complete transparency of the system means you can display the original price, exchange rate, and final amount to your customer in their local currency or currency of choice. Our hotel merchants can now charge guests while they are making a telephone enquiry, upon receiving reservation requests from an OTA like Booking.com, or if they’re a walk-in,” says Ms. Aroyewun.
By offering a secure payment method, businesses can build trust with their customers, which will result in repeat business. This is especially important as fraudulent activity continues to rise, including an uptick of fake travel agencies or airline websites.
Venues using Virtual Terminal can immediately process transactions and receive real-time payment confirmation without the need or cost of a physical point-of-sale device. Nor do they need any additional phone lines or hardware to operate the terminal. The setup is easy, and the service can be added to their payment option without much hassle.
“Our clients are quick to share that the more payment options they offer, the more appealing they are to a wider client base. Customer experience is a key differentiator. Businesses will support a chain of hotels or even a small boutique lodge if they know that they can conduct business the way they prefer, no matter what country they are in. The added security of working with a known, trusted payment provider that is recognised across Africa will also help build trust and, ultimately, revenue,” Ms. Aroyewun concludes.