Home
Hotel News
BITAC® Events!
Food & Beverage Jan. 21, 2018 More Info 3 Supplier Spots Left
Luxury Mar. 04, 2018 More Info Sold Out for Suppliers
Building Your Hospitality Business
  Are you a member? Log In  or  Sign Up
Best Western Hotels & Resorts
 
Share
Send a summary and link to this article
To Email
Your Name
Your Email
Bot Test
To pass the Bot Test, please type the white text that you see in the gray box. This helps us prevent spammers from abusing the system.
Print Printable Version

Pennies from Heaven Flowing Straight to Your Bottom Line

Read this and learn a great secret to send more money to the bottom line.

Monday, December 28, 2015
Stephen Darling
bookmark this
Bookmark to: Digg Bookmark to: Del.icio.us Bookmark to: Facebook
Bookmark to: Yahoo Bookmark to: Google Bookmark to: Twitter
We are on Twitter

How often have you heard, “There’s nothing we can do about credit card commissions?”

Hotels negotiate rates with customers, and we can do the same with banks and credit card networks. In my monthly financial reviews with the hotels I work with, I have become increasingly frustrated with that growing expense line called Credit Card Commissions. I sensed that those charging the fees were not actually doing anything to earn those commissions except electronic processing. The fees haven’t decreased since we ran those flimsy vouchers through an embossing machine and they were loaded into a hopper.

When was the last time you looked at the detailed breakdown of the fees your bank or processor charges? Assessment Fees, International Fees, Transaction Fees; and then there are Acquirer Chip Fees. And don’t forget the Pin-pad and Terminal Fees. Yikes!

Most hotel GMs and financial controllers don’t know how to read a credit card processing statement or know what the true costs of transaction are. As a partner and consulting member of Cayuga Hospitality Consultants, I decided it was time to take a cue from experts outside the hotel field who have developed a repertoire of algorithms, best practices and contacts that are key to reducing costs associated with credit card processing fees.

Cayuga has established relationships with the best-in-class industry experts, and researching this specialized market became a priority so that our consultants could offer an advantage to our clients’ business needs. With several knowledgeable players already in the field, I used the tangible findings from my own test cases to select a company that would benefit Cayuga’s clients, which are mostly small to mid-size hotels and restaurants lacking an internal team to manage such a project.

While we often think that hotels are uniquely different; in the credit card processing space we are no different than the dentist down the street. When we can learn from other industries, we should seize on what they’re doing better.

This selected company swiftly helped Cayuga’s client network save money on credit card processing without changing banks or processors. They did so by analyzing credit card statements and negotiating with processors on behalf of businesses to achieve the best rates and fees, while also ensuring that the right data is being passed to the card companies for maximum savings.

As an example of the difference this service can make, one of my clients has two small to mid-size hotels. After analysis, the auditors were able to negotiate reduced credit card processing by 22% which, of course, flowed directly to the GOP line. The overall commissions my client hotels were paying averaged 2.78%. Leveraging industry knowledge and contacts, the auditors were able to reduce the overall fees to 2.12%, saving my client in excess of US$20,000 a year per hotel.

Think of what a 22% savings on your annual credit card transactions would contribute to your bottom line. This is a whopping no-brainer to easily convert pennies to dollars!



Credit
Stephen Darling    Stephen Darling
Author
Hotel Interactive® Editorial Division

Bio: Stephen Darling is a hospitality consultant and board director based in Vancouver, Canada. He has spent 40 years in the hotel industry, having a lot of fun along the way. Following Cornell University’s School of Hotel Administration BSc degree, he achieved his designation with the Institute of Corporate Directors as an icd.d through the University of Toronto’s Rotman School of Management. He is associated with Cayuga Hospitality Advisors and G7 Hospitality ...
more
Feedback Messaging & Feedback
We welcome your opinion! Log In to send feedback.
Already a member?
Login
Log In
Not yet registered?
Login
Sign Up
Need More Information?
Information
Benefits
 
  RSS Feed
RSS Feed
Policies
Contact Us
Mobile Version