Posthaste: Why hotels need more payment flexibility

More travellers want to use Apple Pay, ‘buy now, pay later’ for hotel stays

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With hotel prices on the rise, consumers are looking at alternative payment methods to make their trip work within their budget, but some are finding roadblocks along the way.

The average daily rate for a hotel stay in Canada hit $235.85 in August, a 3.6 per cent climb from a year ago and outpacing the month’s two per cent inflation rate, according to a report last week by CoStar Realty Information Inc. That puts the average long weekend hotel stay at more than $700.

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Many travellers are looking for flexibility in the booking process when it comes to paying for a hotel stay, Adyen NV’s Global Hospitality Report, released last week said.

The report said 32 per cent of Canadian consumers have given up on booking a hotel because they were unable to pay the way they wanted, while 41 per cent would pay more if there were more flexible payment options.

The report said 19 per cent of consumers have paid for a hotel stay using a digital wallet, while nine per cent used social media and four per cent used a “buy now, pay later” strategy, which allows people to receive a product or service upfront, but then pay for it in instalments over time. The option has gained popularity as costs climb and discretionary spending drops.

“Travel expectations are sky high, with payment options playing a critical role in shaping the overall guest experience and influencing future booking decisions,” Mark Rademaker, head of hospitality at Adyen, said in a news release.

“With potential guests abandoning bookings due to payment inflexibility, and some not returning due to finance-related issues, the hospitality industry must urgently look at how experiences can be enhanced in an era where every touchpoint matters and payments are no longer just a transaction.”

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Despite the payment challenges, demand for hotel rooms is still high in Canada. The CoStar report said hotel occupancy reached 79.7 per cent in August, a 3.1 per cent climb from last year and the highest rate since August 2018.

Laura Baxter, CoStar’s director of hospitality analytics for Canada, said economic weakness has hurt the industry, but the August 2024 data is a welcome break from this trend.

“After occupancy contracted marginally in July, the metric returned to a level normally seen prior to the pandemic,” she said in a news release.


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Retail sales in Canada climbed 0.9 per cent in July and are projected to gain another 0.5 per cent in August, according to early estimates from Statistics Canada.

Overall, retail sales are expected to climb 0.8 per cent in the quarter, which offers a more positive outlook on the economy and could offer more confidence that the Bank of Canada can tame inflation while avoiding a recession.

Read more here.


  • Today’s data: Canadian housing price index for August
  • Earnings: AAR Corp.

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Today’s Posthaste was written by Ben Cousins, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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