Virtual payment solutions reduce process costs because manual entries and document counts fail; and so far nothing strange. An analysis of the booking data conducted by HRS shows, however, that virtual credit cards also reduce direct costs . Pure randomness?
No-show cases decrease, bookings are made more in advance and average rates are lowered
First, the data showed that the no-show percentage had not increased. As a percentage, the share was even reduced by 15% after the transition to the payment solution for HRS: from 4.1% to 3.5%
Also the booking times had changed : instead of 8, 5 days before the trip, the collaborators of the companies involved in the study suddenly made the reservation eleven days in advance. Furthermore, the average amount of booking fees was significantly lower than before; the payment solution does not just offer process benefits, it also reduces the average room price by 12%. The average room rate of the bookings subject to analysis, before the introduction of the new payment solution, was € 112.30 and then only € 98.60
Companies that opted for the introduction of the solution virtual payment should be very satisfied with these results. The question remains about the reason for such a change in the booking behavior.
"Man does not always decide just thinking of his own advantage"
Georg Felser, psychologist of marketing and consumption, these results make rather think of a behavioral pattern that manifests itself in situations "in which people do not decide in a selfish way and oriented towards maximizing benefits, although they have the possibility to do so". An example is the concept of "Pay what you want" : unlike what one would expect, people usually do not take advantage of it. "In most cases, they even pay more than they would if prices were fixed and the effect manifests itself even more clearly if the amount paid is not visible". For example, when invited to indicate the nightly rate in a sealed envelope. Felser: "Usually the sum paid is higher than the price of the offer, but not excessively higher, rather adequate".
In addition, the professor believes that the different booking behavior is largely influenced by the group: " Usually people, if they have to decide for a group, act more selfishly in terms of advantage for the group than they would if they had to decide for themselves ". In fact, and this is a concept very dear to the professor, "it is absolutely not true that people always decide thinking about their own benefit. Sometimes yes, of course, but that people are selfish by nature is just a prejudice ".
The post HRS analysis: virtual credit cards reduce direct costs first appeared on HRS Business Travel Blog .