Did you know that 4 out of 5 travelers abandon their bookings in the global travel industry?
One factor? Adding booking fees and service charges at the end of the checkout process. In fact, they can play a major role in driving customers away.
Why can booking fees derail a customer's booking experience? Those sneaky charges can come as a surprise, leaving the customer questioning whether to proceed or abandon the booking altogether.
In this article, we will explore the effects of charging booking fees. You'll also get alternative strategies to keep your customers.
Take these actionable tips to improve your customer experience and convert more visitors into paying customers.
Impact of Adding a Booking Fee At the End of the Checkout Process on Conversion Rates
Based on a Baymard Institute analysis, the average cart abandonment rate across various industries is 69.8%. For the travel industry, it's 81%. In other words, four out of five people visit travel websites and don't buy.
These high abandonment rates are attributed to hidden costs, like booking fees and service charges.
This matches Arival reports and industry data that fees cause drop outs. In the past, Airbnb has resisted this, saying they don't notice a drop off at checkout because of fees... until now. That's why Airbnb came up with "simplified pricing", where they now charge a flat 15% on public rates compared to 3% on host service fees and all other fees.
Now, how is this relevant to tour operators?
Travel operators need to reduce friction in the booking process. Next, let's look at alternative strategies for getting rid of booking fees.
Alternative Strategies for Eliminating Booking Fees
Bundle Your Fees With Ticket Prices
A good way to eliminate booking fees is to bundle them with the ticket price. Making all additional costs part of the base ticket price makes the booking process transparent and easier for your customers.
Using this approach, the customer only sees one price. You'll have an edge over your competitors who itemize their fees separately. Your booking fee may even be absorbed entirely, giving you a competitive edge and attracting more customers.
Waive Booking Fees Above a Certain Purchase Threshold
Think about waiving booking fees automatically for purchases over a certain amount. Spending more rewards customers and encourages them to book more.
When customers know this benefit, they're more likely to book, so you get more conversions.
Introduce a Subscription Service
Offering a membership program can eliminate booking fees and give customers more benefits. When customers opt for a monthly or annual subscription, they gain access to exclusive perks such as waived booking fees, free snacks, or priority access to popular tours or activities.
You'll increase conversion rates and customer loyalty if you do that, leading to a long-term relationship with your business.
Transparent Communication about Non-Removable Fees
There may be times when it's impossible to completely eliminate booking fees because of system limitations or management directives. This situation calls for transparent communication with your customers.
During the checkout process, add a collapsible link or collapsible text that gives detailed information about the fees. Explain why you need these fees, justify the expense, and prove that your business is transparent.
You can build trust and ease customer concerns by being upfront and informative. As a result, customers are more likely to complete their bookings.
Simplify Your Booking Process with Ticketinghub
Adding a booking fee at the end of the checkout is not only an inconvenience for customers but also creates a negative experience. The problem is, a lot of other reservation systems do the same thing.
However, there's a better way to go about it. Here's Ticketinghub!
Ticketinghub provides a seamless booking process without hidden fees or surprises. Your customers deserve a smooth, transparent experience, and that's exactly what we deliver.
You'll never have to worry about frustrating booking fees anymore with Ticketinghub's user-friendly reservation system.
For your business to succeed in a highly competitive industry like leisure and tourism, you need to address the factors that lead to purchase abandonment. If you use the strategies above, you can minimize booking fees' negative impact on conversion rates and improve customer service.
Bundle fees with ticket prices, consider waiving fees above a certain threshold, and consider a subscription service. If booking fees aren't negotiable, prioritize transparent communication to build trust.
These tips will help you create a positive environment for potential customers. As a result, you'll drive higher conversion rates.
Enhance your customers' booking experience with us today! Book a demo here.