Making Payments More Hospitable - James Lemon, Stripe

Josiah: 0:00

You know that super easy checkout experience you enjoy on Amazon and Uber? Today we're learning from the person behind the company that enables that experience, someone who thinks there's a big opportunity in hospitality to remove pain from payments and elevate your guest experience. Stick around to learn how. To say our guest today has had an interesting career is an understatement. James Lemon grew up in hospitality, literally at his family's bed and breakfast, and ended up working in strategy for IHG, one of the largest hospitality brands in the world. After a number of other leadership roles in hospitality, he founded and led a hospitality mentoring platform before taking his current role as the global lead for travel, leisure and transport at Stripe. Here's James explaining what Stripe does.

James: 1:04

Stripe builds payments and financial infrastructure, largely for the internet economy, but increasingly for the in-person experience as well. So over the last 10 years, if you've ever had a lovely payment experience online, you're like oh, my payment type's been remembered or it's just one or two clicks. That's probably Stripe and the big success story has been its marketplace technology. So this is the idea that you might make a payment on a ride-sharing app or a food delivery app. We all know who the big ones are. You pay once, but that money is then split. It then moves between, potentially, a grocery store or a restaurant. The platform takes a margin. There might be a small payment going to a rider or a driver as well. That kind of revolution in not sending invoices, not reconciling, not arguing over commission fees has enabled those companies to grow to immense scale and strikes behind, i think, 75 of the world's top 100 marketplaces. That technology is just amazing. If you think about just how manual back officers are in hospitality They also do. We have terminals. We manage online subscriptions, we do issuing so kind of virtual cards. But the way I think about it 15 years in hospitality now and a year in travel is, I think, strike most of the C-suite challenges I think hospitality dealing with have payments somewhere in their challenge or somewhere in their opportunity, and so for me, the kind of the idea of booking direct. How do I make sure a customer loves my hotel website and they choose me over an OTA? If I'm an OTA, hey, how do I make sure they come to me and not my competitor? If I run a tour in San Francisco, how do I make sure if someone lands on my website, you know they feel really confident and are able to check out without friction? And then behind the scenes, you've got these huge networks of franchise hotels. Or if you're an OTA, you know you're aggregating the world's travel content. Well, why on earth are we still doing that, with invoices and after-the-fact kind of payments, when we already know there's this technology that's been out there for five or 10 years? So that's kind of what strike does, and I suppose my job is to line that up with some of the big strategic challenges and opportunities of the hospitality industry, which is easy to do because I think it's a great fit.

Josiah: 3:16

Well, I appreciate you walking through that, and I was talking to someone yesterday who is speaking to the importance of "FinTech," or financial technology. Right, it may not be the first thing that we think about when it comes to innovation or the guest experience, but it can also be a source of friction if it's not done well, right? So you keep handing over a credit card two, three times that booking a check-in, a check-out it's over and over again, and you spoke to Uber being an example of this. But it seems that our expectation is set by these other companies, where we expect frictionless interactions with the businesses that we work with, and that applies to hospitality as well, right? Yeah, absolutely, of course, it does.

James: 3:55

I mean, we all talk about this golden age of hospitality, right, whereas all about the experience. And for me, whether you're on a business trip or personal trip, your focus, your time. You should 100% be in the moment, whether it's signing that deal or working with that client, or whether it's be time with your family or friends and disconnecting So any opportunity to make payments invisible, not force you to get your credit card out or just reduce that admin of like, wait a minute. You've seen me before and you took my credit card details online. So now, when I'm at the front desk and it's late at night and I just want to go to my room, why are you forcing me through all of this again? And you're absolutely right. The cliche is probably Amazon and the e-commerce space and Uber and the kind of real-world space and like they've actually solved it. Both of those are big strike customers. So it's really. It's really trying to tell the story but then ultimately make it a priority for the hotel chains, the car rental companies, and experienced providers of our industry to go right. No, no, this is easier than we think. You know, I don't have to build this myself, in the same way, that we might use Amazon Web Services. We don't have to become experts in the cloud infrastructure. Like that's kind of where Stripe should position itself in the industry. Let us take care of that. Really easy to plug in, anyone can do it and then you're off and running and you can go back to just obsessing about your customers and making sure the rest of the experience is right.

Josiah: 5:25

That's great. So for listeners that are listening to this and say, yes, I want that. I am interested in thinking about creating a frictionless experience for my guests. I'm curious what your advice would be for people evaluating and shopping for this type of technology. You've worked at IHG. You've worked on many different aspects of the hospitality ecosystem. How should people think about beginning that journey?

James: 5:47

Yeah, I think the hospitality industry probably doesn't always know where to start. I think the first is you do have to just get out in the industry and see what's out there. And I noticed this when I was at the growth works kind of running innovation hubs for companies like IHG. Only a few executives in the company, I think in any company can really say, yep, I'm going to enough trade shows and exposing myself to enough ideas. or even, hey, I'm picking up the phone to the odd sales outreach on LinkedIn And I'm finding out about it. I think Muse is a great example, right, I think I saw the top 50 startups come out in somewhere on LinkedIn today and Muse was at the top. And that's not just hospitality startups, that's startups period. So if you're in a hotel chain right now and at some point, you haven't thought I should just take a call and see what that fuss is about, then I think as a business and as an executive, you're probably doing yourself a bit of a disservice. So I think, look, if you're thinking about payments like how do I drive more direct bookings Or how do I streamline those B2B systems that I'm not sending all these invoices, we're cutting out on the night audit. We're not constantly arguing with franchise owners about what guests we saw and how much we owe. There are probably two or three payment companies that can handle that. And yeah, we're probably at the same events And we're both on hotel tech report and you can find us. So I think there's definitely like as an education piece, and then I think there's a kind of a meet and greet and engagement piece, and then I think for me it's all about proofs of concepts. Now, again, we've been talking as an industry about being agile, but that in itself can be misconstrued And we just end up bringing in a bunch of agile consultants and calling everyone product managers And we think we've done it. But it's just, how do you break it down to the smallest possible piece of work? So you might just go right. You know what country, where we know this is a big problem. We're going to take six months and we're going to put, you know, stripe and one other kind of running the websites or running the terminals, and then at the end of that six months, we're gonna check the ROI. Right? do we feel like we're converting more people direct? A guest is happier, you know to start, feel like they've saved time and I think these proof of concepts again, and not something the industry's naturally got a muscle for. I think we go right. We, as a hotel chain, can do three things. This year. We're gonna put X million dollars behind each one Let's, let's go. And so inevitably, you fall into bed with very, very big companies who sell the dream Hey, we've, we've got this, and everything just ends up, I think, a bit bigger than it needs to be. So I think, for, on behalf of all of the hospitality startups out there, please, you know, scan the market, you know, meet some new startups and, frankly, get a few piloted in your hotels. And I think that's what's got to be the spirit of the industry is we're not afraid to try stuff, we're not afraid to share what works and we're not afraid to give feedback to startups if they're not ready.

Josiah: 8:31

That's a hallmark of great technology companies I've seen is that rapid iteration of testing and learning and testing and learning and it applies to anyone running a hospitality business as well Try things right. It's easier than ever to try things. I'm curious you mentioned some extraordinary examples of Amazon and Uber. As you kind of look at your client base within hospitality, is there one that stands out to you as a great implementation of Stripe and the technology that you offer?

James: 8:55

Yeah, great, great question. There are lots, right, I think. I think if you, if you think about the, the technology provider space, you know I've got a big shout out to people like, yeah, like news and cloud beds and the property management space, like the fair harbor, in more the kind of experience of space. So these are companies that are building full-stack solutions for their customers, right, so that's your, that's your hotels, that's your tour guides and they, they obsess about right, how do we help with direct bookings? How do we streamline operations? How do we make payments simple? And so that's great because you, they can white label stripe and stripe can turn up as part of a Whole solution that works. So I really admire that. Those guys are thinking about FinTech. With those, they're thinking about, hey, what services are holding back our respective industries? So I think that's great, but I suppose, even more, you have to admire these very established global companies where the CEO has gone. You know we haven't moved fast enough and we are going to transform. So you know, quite publicly, companies like Hertz have come out and said over the next few years, Stripe will be running all of our websites and all of our franchisees will have striped terminals and, hey, we might launch a subscription product in a few years time And we know that stripe is the one partner that we can always turn to. We go, this is the idea We've got. Next, you know, have you guys got something in that toolkit that can? that can help? I think that's huge. Other brands that we work with, that I really admire and kind of part of the reason I work at Stripe, but people like the Hoxton group and Life House, Sonder, some of the people who are kind of coming out the gates going, you know what, we're creating really authentic experiences that are really different. So, Sonder, it's much more about kind of high-class apartments but quite low-touch. And Life House, it's about well, hey, we want to hide some of that tech. We want to make it much more about an authentic neighborhood experience. So it always just matters what experience you want to create. If you, if you're committed to innovation and they're all of a similar DNA and that they go, hey, we want to have our own tech team. We're blending hospitality and tech in order to create our experiences. I think these are the companies that you've got to be following on Instagram, following on LinkedIn, and watching when they turn up at industry events.

Josiah: 11:03

I think you bring up a really interesting point because there could be an opportunity to work directly with a company like Stripe as an organization. But it sounds like there's also this opportunity to look at your other technology partners, whether it's a property management system or other, and think about, okay, not just the tech you have, but who are your partners and who are the? What is the underlying piping that is enabling this experience? Just so I understand, is it like a Hoxton working directly with you? No, that's exactly right.

James: 11:31

So they have a CTO and they have development resources in-house and they're like right, we're going to build our own booking engine, we're going to book our own payment system. Of course, behind the scenes, they're using Oracle Opera not literally building PMSs from scratch, but they're committed to hey, we have a solid view of our tech stack. We know what we want it to be like. I'm not saying it's an easy job at all. If you are a top 10 chain and you are asked to draw your technology stack today especially if you include payment providers in that, chances are you've spent decades leaving a lot of it up to your hotels, and that's a blessing and a curse. It's a blessing because actually, in those hotels, you probably have the next 20 amazing startups. If I take a startup like when we used to do this run innovation hubs for hotel chains we used to find startups like Oakey and Dayuse. They were in hundreds of small hotels within a chain and the head office didn't even know So straight away you could be like hey, you can roll this out as a brand standard, and here are all the data points, because you've effectively been running a pilot just by simply ignoring this area of innovation. So I think it's a blessing, but it's also a curse because, again, for something like payments, if you have hundreds of owners, they've probably all been using systems and tools given by their bank, which means you've just got this completely different customer experience when you're checking out, whether you're checking out in the US or you're visiting a hotel in Europe or Asia, and does it matter if you're a loyalist to a brand and you're going to book with them, no matter what you're going to get by, right, you're going to be like I just have to put up with this. But if you are, you know, 40% of people are not quite that brand loyal or they're even becoming kind of almost OTA dominant, right, that's kind of where they start. Well, every hotel chain has a chance to win that booking. You know, at some point I always think when you, when you search on an OTA, you always go to the hotel's website just to kind of just check the facilities, check the rates, check the price, maybe even check the location. Is this really where I want to be? You've got a chance to win the booking then. So, if they can check out your site, you've got a great new product called Link, where, if we've ever seen your credit card before and we've seen 90% of credit cards in the world. Now you can check out in six seconds, even if it's a site the guests have been to before, and that's the kind of thing that will keep one your site instead of oh you know what, I've got to go and get my credit card from my wallet. I can't even be bothered. Yeah, then let's go back to booking.com and Expedia, which is just much more likely to have one-click checkouts. They're much more likely to have saved your payment method. They even know they'll be introducing things like Vinal Pay later soon with Affirm and Clana. They're just giving consumers so many options that convert really well. Yeah, it's really hard for a hotel to keep up with that. Unless it goes. You know what? This isn't my area of expertise. I'm going to hand it to Stripe. You guys need to make my website convert And that's what we love.

Josiah: 14:14

Most hotel bookings have taken me a lot more than six seconds! So there's an opportunity here to make life better for your guests and grow your business and build a competitive advantage doing so.