Challenge

In 2012, Cloudbeds launched with the goal to make it easier for hotels, hospitality groups and management companies to run their properties. Five years later, the San Diego–based company recognised the opportunity to accelerate revenue growth and deliver a better user experience by embedding payments directly within its platform.

Cloudbeds initially partnered with a payment provider that was able to handle basic transactions well. While that gave Cloudbeds confidence that its embedded payments approach would work, the company also saw limitations in the provider's capabilities.

Cloudbeds determined it needed a provider that could accelerate the merchant onboarding process, which previously took weeks. Improving the merchant onboarding flow would help Cloudbeds scale and grow more quickly while continuing to provide businesses with a high-level user experience.

Additionally, Cloudbeds needed robust payment capabilities to address the financial complexities of the hospitality industry, where guests make advance bookings online or by phone and email months ahead while also completing in-person transactions during their stay. That required a billing and payment provider with technology capable of supporting a wide variety of payment flows.

The company also needed powerful data management tools that allowed it to track key metrics such as volume, approval rates, fees and disputes, as well as the ability to export payment data to its data warehouse.

Finally, Cloudbeds had to easily integrate new tools into Cloudbeds Payments, its embedded payment platform, without requiring considerable development time. In addition to managing pre-authorisations and other unique hospitality industry payment challenges, Cloudbeds wanted to enable its businesses to convert more customers by improving the checkout experience with a wider range of popular payment methods.

Solution

Cloudbeds began working with Stripe in 2019 after an extensive evaluation of Stripe and another major payment provider. "Stripe just beat them in every domain we could measure," said Tony Vardiman, Cloudbeds' vice president of global payments and operations.

Cloudbeds first implemented Stripe Connect for complete control over funds flow through the business, from pay-ins to payouts. The company quickly began customising its use of Connect to improve users' payment experience by embedding more robust payment workflows into its Cloudbeds Payments platform.

Cloudbeds relied on Connect embedded components, prebuilt UI tools to white label payment workflows in record time and with minimal development effort. These embedded components include tools to manage accounts, review balances, dispute payments and enable users to perform payouts. One embedded component that Cloudbeds chose was an account onboarding tool that is optimised with lessons learned from thousands of platforms to minimise user error and get customers up and running faster.

Cloudbeds implemented Stripe Payments to process transactions, whether guests book directly with a hotel or through an online travel agent, and whether they decide to pay immediately or when they check in. That integration enabled Cloudbeds to expand payment methods beyond credit cards to include wallets such as Apple Pay and Google Pay; buy now, pay later options such as Affirm; and Link, a wallet by Stripe, which provides customers with a faster checkout experience. Cloudbeds also offers local payment methods in some markets, such as OXXO, a popular online payment method in Latin America.

While most bookings happen online, businesses using the Cloudbeds platform also need to take on-site payments to cover security deposits or additional amenities purchased by guests. As a result, Cloudbeds adopted Stripe Terminal to enable guests to make in-person card and contactless payments using the BBPOS WisePOS E. With Connect and Terminal, hotels are able to get a unified view of all transactions, whether they're made in person at the front desk or months ahead of time through an online travel agent. This unified view gives hotels more visibility into sales data, revenue trends and other financial metrics, while also helping to improve operational efficiency by reducing time spent managing separate sales channels.

From Day 1 of its Stripe integration, Cloudbeds has used Stripe Sigma to get granular data on volume, approval rates, fees and disputes using natural language prompts – all within the Stripe Dashboard. The company also integrated Stripe Data Pipeline so it can easily export its payment data to the company's data warehouse alongside Cloudbeds' other business data.

In recent months, Cloudbeds has continued to expand its approach to embedded payments as a way to drive more revenue and deliver more options and capabilities to users. The company recently turned on Stripe features including Instant Payouts, which enable Cloudbeds to monetise fast payouts to its businesses, as well as Stripe Capital, which has created a new revenue stream for Cloudbeds by offering its businesses financing.

Results

Cloudbeds Payments users see 15% higher revenue growth

Businesses using Cloudbeds' embedded payment solution powered by Connect have not only reported faster overall revenue growth, but also larger average ticket sizes. "By leveraging tools like Connect, we're not just building a stronger business ourselves," said Vardiman. "We're actively making our customers more successful, too."

Embedded components saves hundreds of hours of developer time

Cloudbeds used Connect embedded components to easily add new Stripe products with minimal development time. "In my view, Stripe's embedded components are a game changer," said Vardiman. "They let us move faster without sacrificing quality or control."

Hotels are onboarded in hours rather than weeks

With Connect, Cloudbeds was able to significantly reduce the amount of time it took to onboard new hotels, helping to more quickly drive revenue for the company and enable businesses to benefit from the Cloudbeds platform.

Cloudbeds gains significant business insights with Data Pipeline

"Access to the Stripe Data Pipeline has been transformative for our reporting and analytics workflows," said Vardiman. "By seamlessly ingesting large volumes of Stripe data directly into our data warehouse, we've been able to build custom reports centred around the metrics and performance indicators that matter most to our business."

With this flexibility, Cloudbeds has been able to deliver more robust data-driven insights tailored specifically to its operational and strategic needs.

14.8% increase in revenue for properties that enable alternative payment methods

Offering expanded payment options has contributed to bottom-line growth for businesses using Cloudbeds, helping properties deliver the speed, convenience, security and expanded purchasing power their customers want. Businesses on the Cloudbeds platform that added payment methods such as Apple Pay, Google Pay, Affirm or OXXO have seen their revenue increase by 14.8% on average.