Gift Cards and Alternative Payments: Their Place in the Hotel Operations Ecosystem

The most significant barrier preventing hotels from efficiently implementing successful gift card operations is due to restrictions within their technology stack

By Warren Dehan

What good is a gift card if it's a chore to purchase or use? Keeping this top of mind should be key to hoteliers when considering program options, and it's particularly important as travelers begin to cash-in gift cards bestowed on them during the recent holiday season. Gift cards and other forms of alternative payment are becoming increasingly popular with consumers, with a recent Capital One study finding that the U.S. gift card market is expected to generate $324.5 billion in revenue in 2024 and grow 17.7 percent annually. Clearly, travelers still have more to give, and hoteliers must make the process as easy as possible to tap into this lucrative revenue stream.

Gift cards are a popular way for people to share travel due to their convenience. Rather than directly booking a trip, gift cards allow recipients to select the journey of their choice and apply a credit toward it when it is most convenient for them. Hotels are typically happy to accept gift cards because their use spurs other purchases on the property, but successfully implementing them frequently creates additional operating challenges, mainly depending on whether a hotel's Property Management System solution is designed to fully accommodate them within the entire operational ecosystem.

The most significant barrier preventing hotels from efficiently implementing successful physical and online gift card operations is due to restrictions within their technology stack. Hotels must embrace technology capable of flexible payment processing and eschew siloing other departments from one another. Siloed operations cause a host of issues in today's operating environment, from a lack of data transparency to potential security concerns. Most importantly, disconnected systems cause inefficiencies at a time when operators should be building trust with consumers.

Embracing Personalization

The first thing hoteliers should consider when deciding to improve gift card operations is the purchase experience from the guest's perspective. Is your gift card purchasing available online with e-gift card fulfillment? Is your payment processing environment consistent with your brand? Does your hotel offer a boilerplate Visa card or a unique branded card? Branded cards are more impactful because they associate future purchases with your property. This is an invaluable asset for independent hotels, which should seek technology partners capable of offering personalized cards to expand their brand presence.

Gift cards also come with unique caveats in practice. Cards are often lost, purchased for the wrong guest, or no longer recognized for a variety of reasons. As such, hotels should be able to quickly track, sell, swap, and void cards as needed. Hotel workers should be able to quickly analyze a card's balance and easily activate new cards for guests. New controls also exist to help locate the balance on lost cards, track purchasers and recipients, and provide a full transactional history.

These elements are essential for maintaining a high-quality, consistent card ecosystem that guests can enjoy without burdening operators. Gift card functionality also ties nicely into promotions and in-person events on property and should be promoted in advance to increase guest interest.

Gifting Consistency

Access to gift cards significantly uplifts your hotel's identity and recognition and has real-world implications that can positively impact business. Maestro PMS has previously spoken about how gift cards can be a useful way to distribute tips fairly and consistently among employees. The same system can be used to manage both guest and hotel associate cards. Delivering tips through gift cards may also provide a more transparent and equitable tip environment that benefits workers while presenting a clear paper trail for hotel owners.

The key to gift cards, particularly for independent hotels, is to make them as simple to offer and deliver as possible. Whether online with physical or egift card fulfillment or on property gift card purchasing, gift cards should embody the meaning of "gift" and, therefore, must be a welcome and convenient way to distribute funds. The more convenient, the more effective for all users. This means having access to reliable tech support should errors or unexpected challenges arise with accessing, transferring, or voiding cards.

Experiences are back on consumers' wish lists in a big way, with CNBC recently calling a travel experience the "hottest gift" of 2024. According to their figures, three out of four Gen Z and Millennial consumers said they would rather receive a "fun experience or trip" than a traditional gift this year. When considering how difficult it is to guess the right trip for every traveler, gift cards will be the safe and reliable answer. Let's make sure they really are.

Warren Dehan is the President of Maestro, the preferred Web Browser based cloud and on-premises all-in-one PMS solution for independent hotels, luxury resorts, conference centers, vacation rentals, and multi-property groups. Maestro's enterprise system offers embedded payments and 20+ integrated modules on a single database, including mobile and contact free apps to increase profitability, drive direct bookings, centralize operations, and enable operators to engage guests with a personalized and safe experience. Maestro's Support Service provides unparalleled 24/7 North American based live support and education services.