Treebo, Hotels

Case Study: How Treebo Hotels saved inventory costs and reduced no-shows

Treebo Hotels is one of India’s largest pure-play, full inventory based budget hotel chain with a network of 400 hotels in over 70 cities. The company has been investing in providing a seamless business experience for the franchise partners and their customers.

No-shows – a major concern for hotels:

One of the challenges faced by hotels is that many times the guests change their plan without informing, which causes problems especially during high-demand cycles, curtailing their ability to fully utilize the inventory.

“One of the solutions that we figured out is proactively communicating with the customers and request for part payments. Offline communication is important for us, which is where we use email and SMS, and that is where these payment links come very handy.” k
      Khilan Haria, Head of Product Development, Treebo

Treebo identified that ‘no-shows’ were significantly higher for Pay-at-hotel bookings as compared to prepaid bookings, simply because the customer has not yet paid the money and has nothing to lose. The company decided on a provision for end-customers to make partial payments towards a booking to hold the inventory for them.

Khilan Haria, Head of Product Management for Treebo Hotels, said:

A lot of third-party platforms and channels where we get bookings from don’t even support prepaid bookings, and most of the bookings are pay-at-hotel. We had to figure out a way to get some sort of confirmation. Getting a part payment is one indication that the guest will show up.

Solution that caters to upfront money collection:

For some time, the company had been working to deploy a partial payment solution so it could reduce the high incidence of no-shows. Treebo decided on using payment links technology provided by Razorpay in which payment invites could be sent to customers with help of chatbots, e-mail and SMS while they are offline. By paying a small partial payment through the payment links, Treebo has ensured that its perishable inventory is utilized the right way.

CASE FIL
Institution: Treebo
Vendor involved:Razorpay
Technology used:Payment Links
Benefits accrued: Better utilization of inventory; reduction in manual efforts and operational costs; 30% reduction in no-shows

One of the solutions that we figured out is proactively communicating with the customers and request for part payments. Offline communication is important for us, which is where we use email and SMS, and that is where these payment links come very handy, ” according to Haria.

“With AI becoming the driver of next stage growth for businesses, payment links will become defacto way of receiving payments, where a chatbot could generate a payment link on its own and share with the end customer. This will result in coherent customer experience where the end-customer doesn’t have to nudge away from their deliberate ecosystem be it a chat or a messenger app. Payment links can also be used as reminders to accept scheduled/recurring payments, says Harshil Mathur, CEO & Co-Founder, Razorpay.

Customers can come via any channel viz: direct online or through travel agent to make bookings with Treebo hotels. Once the booking is confirmed, a payment link is shared with the customer asking for the payment upfront, to hold the booking. It also has the provision for customer to make partial payments. Treebo holds the booking for a stipulated period of time and shares the payment link again, post which there is a communication cycle to close the loop. This helps Treebo save a lot of manual effort and operational cost in following up as the end of the day, a booking has to be in a confirmed or cancelled state.

Outcome of deploying payment links:

Eventually, with an increase in the number of pre-paid bookings made via the link, the company has witnessed a decrease in the loss of revenue because of lost inventory. Treebo has also started using payment links for their travel agents and OTAs too.

It has been close to twelve months and we have seen a 25-30 percent decrease in ‘no-shows’, and using the payment links is the main reason for that.

Source: Case Study: Treebo Hotels saves inventory costs with payment links solution