“ Summer Of Travel Fun ” – and digital payments
Summer 2021 can be the summer of fun, depending on whether you are vaccinated and where you plan to go. At a high level, the world is reopening and consumers are eager to satisfy the pent-up travel urge that has lain dormant for the past 15 months. We are ready to see friends and family and see new perspectives.
But is the travel industry ready? Specifically: Are booking platforms and tour operators ready to respond to both consumer demand and their new penchant for anything digital?
In some cases, as evidenced by PYMNTS ‘Payments Innovation Readiness Manual, many hotel companies have lost up to 70% of their bookings, while some digital brands such as Airbnb have been able to pivot and fall. adapt to a rapidly changing landscape where work, fun and life have converged into one.
As HomeExchange CEO Emmanuel Arnaud and Spreedly CEO Justin Benson told Karen Webster in a special episode of On the Agenda, as we’ve all locked ourselves together in the dark days of 2020, so say, reopening and resuming travel will look a bit patchy.
Benson said operators are forecasting surges and have already seen increased demand from end consumers. But big, key markers – Europe, Latin America and India among them – have been rocked by new waves and variants of coronavirus, and some lockdowns … enough that the recovery has been patchy.
“It’s been two steps forward, then maybe a step back,” Benson said, although the volume of transactions and demand among his own firm’s customers was significantly higher in April than in April. February. There is no reason to think things will slow down in May, he noted, as consumer and business demand for travel has been strong.
From HomeExchange’s perspective, Arnaud said, as the United States has led the charge in terms of vaccinations and most of the impact of COVID is in the rearview mirror, other regions are still bracing for new waves.
As Arnaud and Benson noted, it’s true that we’ve all entered COVID-19 together, globally. But the emergence, reopenings and travel readiness have been anything but uniform – and that means the readiness of the tour operators themselves is anything but uniform.
And when consumers do during their travels, some parts of the trip – in particular, the payments – will be changed. Consumers are now accustomed to going digital, using QR codes and mobile wallets, all with the goal of being as contactless as possible and mastering the end-to-end experience.
Along the way, Arnaud and Benson said, as operators weather the storm and accelerate their own recovery, businesses need to think more proactively about how payments can be integrated into the travel experience itself. – where travel operators can provide value-added services that go beyond simply booking and purchasing tickets.
Demographics – and stay close to home
In early indications of returning from the trip, they said, as older citizens get vaccinated, younger family members take the plunge and go out to see them – by plane, perhaps, even though Arnaud and Benson noted that there was a marked increase in demand. for rental cars.
Right now, according to Arnaud, “demand is going to be local or domestic. It will be higher for places and occasions where you can be in a private space. If you are thinking of things like home swapping or renting a house, chances are you will be in higher demand than going to a hotel or taking a cruise, for example, where there is there are a lot of shared spaces.
As a result, travel plans were indeed short term and a little closer to home. Consumers are still hesitant to book things too far in advance or too far from familiar ground, because they fear having to undo things by repeating what happened last year.
Read the fine print
Arnaud and Benson said expectations about payments change as consumers reappear and book. But as we’ve seen with so many other aspects of life in the aftermath of the pandemic, consumers want to control things digitally from their mobile devices (which means, of course, not having to touch other things during their travels). Consumers have become accustomed to QR codes, tap to pay, and other less tactile means of transaction.
As for the readiness of operators and platforms to meet consumers where they want to be met, and allow them to pay however they want – well, that’s an open question.
As Arnaud said, tour operators are a diverse crowd. On one side of the equation might be a digital-only platform like HomeExchange, and on the other side of the spectrum is the hotel, the tour, the physical store… where physical contact can be part of Standard. Readiness levels may vary – but, he noted, everyone is heading in the same direction: towards digital and contactless, of course. “These are the only ways to make money today,” said Arnaud.
Done right, rethinking the payments experience can not only drive the recovery of travel industry service providers, but also their transformation. Buy Now, Pay Later (BNPL) has taken e-commerce by storm and can open up travel opportunities (especially for big-ticket items), or a layer of insurance paid in installments.
But, as Benson noted, payments can be used proactively, allowing travelers to have security through payment flows, giving them the ability to change their mind when cancellations and refunds do. part of the overall “package”, so they won’t. left holding the proverbial sack. The ease of obtaining refunds may have the advantage of stimulating additional sales by travel agencies.
“The question we get all the time is about cancellation policies,” Arnaud said. “So many people have been burned that they want it to be an easy part of the experience. There are opportunities to generate more income by selling different types of cancellation or insurance policies. You might want to book now without any cancellations, or if you want it to be flexible as you see it for airplanes you can imagine the same for accommodation or even restaurants … these are ways for companies to do benefits. “
Arnaud highlighted subscriptions as a payment model that could be subject to further consideration by providers in the future – especially flexible subscriptions.
Changing payment flows and modernizing the tech stack, of course, takes time – and money.
By digging a little deeper, Benson said, large companies have been able to invest the necessary capital to upgrade the technology infrastructure and modernize their apps and payment offerings (Google Maps, for example, has integrated hotels and availability in this function). Small businesses are turning to partnerships with solution providers.
Many companies have tried to overcome the challenges of the virus while also meeting the demands of 3DS2, the authentication protocol that confirms digital identity during payment. Merchants will have to adapt to these technical and regulatory changes – otherwise, they will face sharp drops (or be unable, for example, to get started with new payment schemes, such as the instant payment offering. PIX from Brazil).
Time is running out, of course. While other verticals – clothing and restaurants, big box retailers – have all swerved to adapt to the new digital age of commerce, the travel industry has been left out, on the back burner, possibly. we say, because there was no demand and the income and cash flow did not materialize to help finance technology investments.
No one knows how permanent the change in travel is, as it had been in other areas of commerce, as demand is not (yet) leading companies in a clear direction – or indicating how much they can. invest as we move quickly to the top. summer travel season. Aggregators, Benson noted, have the scale and the resources to make these investments. Maybe down the line there will be consolidation in the travel space, he said.
According to Arnaud, companies that aspire to the transition can take inspiration from what native digital platforms are doing in their own offerings to create end-to-end experiences. Or, he said, “You can buy companies today with valuations, which will be interesting and attractive compared to the ones you could get in 2023, for example.