Hyper-personalization: Will it contribute to sales and the travel industry in 2024?

As hyper-personalization goes beyond the usual strategies that have been used so far to benefit travel needs, there are advances in artificial intelligence and machine learning that may be able to provide the necessary services that travelers need.

Martin Eade from travel search and booking technology provider Vibe believes there’s a lot riding on this. “This is the holy grail of personalization and the first company to get this right will have a real first mover advantage. After all, why would customers switch from a hotel or airline that can anticipate their needs before they even know them themselves?”.

“The aim is to create strategies that make each guest feel special and unique, instead of feeling like a faceless member of a generic market segment. But before companies can achieve hyper-personalization, they need to shift their focus from the product to the client, developing a customer-centric strategy. Harnessing data will help them to understand exactly who their clients are, how they behave, and what they expect when they come to stay at a hotel, or travel on a specific airline.” commented Rubén Sánchez, CEO of the leading hotel revenue management platform BEONx.

Another way artificial intelligence can enable hyper-personalization is via automation. “Valuable, quick ‘recipes’ for automation will allow hoteliers to create predictable, reliable processes so they take their hands off keyboards and create more unique human-to-human interactions. At Cloudbeds, we’re building toward a world where AI-powered automations check out guests, trigger emails for last-minute reservations, add notes for housekeeping when a VIP guest arrives, and create in-depth reports with insights that drive better decisions. When a hotelier’s days become less manual, their guests’ personalized experience will soar.” said Adam Harris, Co-Founder and CEO of Cloudbeds. At the same time, Mr. Harris believes that hospitality technology platform powers more bookings and happier guests for independent accommodation operators around the world.

Gareth Matthews, Chief Marketing Officer at global travel distribution provider Didatravel thinks the industry might finally be in a position to offer elements of this to travelers in 2024.  As a final thought Craig Everett, Founder and CEO from Holibob, the experiences tech provider to tourism boards and online travel sellers, comments that hyper-personalization might lead to a related new trend: hyper-localisation. “Not only do these new technologies empower travel companies to develop a more intricate knowledge of their traveller, but they also fast-track deeper contextual understanding of their interests in relation to their destination. This has the opportunity to unlock a level of hyper-local, hyper-relevant online recommendations that could finally push the experiences sector into the online realm.

Source: Money-Tourism.gr

British Airways Partners with Amadeus for Aviation Retailing Transformation.

Amadeus’ next-generation technology will deliver simplicity, agility and an improved customer experience.

The agreement is a milestone for the aviation industry on its path to modern retailing and the use of dynamic Offers and Orders

The agreement enables British Airways to deliver on its ambition to be at the forefront of retailing transformation.

British Airways has selected Amadeus as its technology partner and Amadeus Nevio, a new portfolio of modular solutions built on open and AI technology, to deliver the airline’s Offer and Order strategic goals.

The partnership will see British Airways and Amadeus collaborate on the design of Nevio’s Offer and Order capabilities, designed to meet the needs of modern airline retailers. Nevio’s Offer suite will facilitate more dynamic products and bundles, whilst Dynamic Offer Pricing is being rolled out to enable real-time contextual pricing options based on marketplace dynamics. A suite of Digital Experience tools will underpin a user-friendly booking experience and streamline servicing, including disruption, on any device or channel.

Working together these will produce highly relevant, personalized customer offers, and deliver a best-in-class retailing and servicing experience for customers.

Built around IATA Offer and Order principles, this totally new, open, modular platform benefits from the latest advances in AI and will help the carrier build demand, differentiate itself in the market and drive value across its entire business at speed.

Maher Koubaa, Executive Vice President Travel Unit and Managing Director EMEA, Amadeus, said: “We see Amadeus’ partnership with British Airways as truly transformative. We’ve been working closely with British Airways for more than 20 years and we’re delighted that the airline has once again agreed to be a driver customer to shape the future of the aviation industry. The milestone partnership unveiled today is a significant step in our journey to making modern retailing a reality, with the deployment of rich, dynamic, personalized offers and next-generation order management.”

Colm Lacy, British Airways’ Chief Commercial Officer, said: “At British Airways we are on a journey to become a world leader in airline retailing and transform our digital customer experience, all underpinned by our £7bn investment to transform our airline. Alongside our partners at Amadeus, British Airways will be able to collaborate on the design of the latest technology to enhance our business processes with greater agility, and help us anticipate the needs of modern, digital travelers, providing them with exceptional experiences across their journey.”

Amadeus’ partnership with British Airways showcases a commitment to support an ambition on the part of the International Air Transport Association (IATA) to create a wholly Offer and Order based retailing environment by 2030. The open platform technology being developed by Amadeus enables the airline to be innovative in its approach to retailing and revenue opportunities and is designed to grow with the airline’s business ambitions.

Source:   Breaking Travel News

Navigating Payment Turbulence — Unraveling Payment Processing Challenges in the Travel Industry!

In an era where technology has seamlessly woven itself into the fabric of our daily lives, the travel industry stands at the intersection of innovation and complexity. Amidst the excitement of planning vacations and exploring new destinations, the intricate web of payment processing challenges often go unnoticed. In this comprehensive blog, we will delve into the nuances of payment processing in the travel industry, unraveling the complexities that both businesses and consumers encounter.

  1. Cross-Border Payment Friction —

One of the foremost challenges faced by the travel industry in payment processing is the complexity of cross-border transactions. As travelers jet off to explore new horizons, payments traverse international borders, encountering diverse currencies, regulations, and financial systems. This intricacy often leads to currency conversion issues, delayed transactions, and additional fees, leaving both consumers and businesses grappling with a less-than-optimal payment experience.

Solutions:

Multi-Currency Support: Implementing payment systems that seamlessly support multiple currencies can mitigate the impact of currency conversion issues, providing users with a transparent and hassle-free payment experience.

Regulatory Compliance: Staying abreast of and adhering to international financial regulations is crucial. Collaborating with payment processors well-versed in cross-border compliance can help navigate the complex regulatory landscape.

  • Fraud Risks and Security Concerns —

As online transactions surge, so do the risks associated with fraud and security breaches. The travel industry, with its high-value transactions and vast array of customer data, becomes a lucrative target for cybercriminals. From stolen credit card information to identity theft, the potential consequences of inadequate payment security measures are significant.

Solutions:

Tokenization: Employing tokenization technology can enhance security by replacing sensitive payment information with unique tokens. This minimizes the risk of data breaches and ensures that customer data remains protected.

Two-Factor Authentication (2FA): Implementing robust authentication processes, such as 2FA, adds an extra layer of security, making it more challenging for unauthorized individuals to gain access to sensitive information.

  • Dynamic Pricing and Transparent Payments —

The dynamic nature of pricing in the travel industry, with fluctuating fares and real-time availability, poses a unique set of challenges in payment processing. Consumers expect transparency in pricing, and any discrepancies or hidden fees can lead to dissatisfaction. Ensuring a seamless payment experience amidst the constantly evolving pricing landscape requires innovative solutions.

Solutions:

Real-Time Price Adjustments: Implement systems that dynamically adjust prices in real-time, ensuring that customers are charged accurately based on the latest information, and transparency is maintained throughout the booking process.

Clear Communication: Providing clear communication on pricing details, including taxes and fees, helps build trust with customers. Transparent payment processes contribute to a positive user experience and can lead to increased customer loyalty.

  • Mobile Payments and User Experience —

The ubiquity of smartphones has transformed the way people interact with businesses, including travel services. Mobile payments have become a cornerstone of the industry, but optimizing the user experience on mobile platforms presents its own set of challenges. From responsive design to intuitive interfaces, ensuring a seamless mobile payment experience is imperative for customer satisfaction.

Solutions:

Mobile-Optimized Interfaces: Designing user interfaces specifically tailored for mobile devices enhances the overall payment experience. Intuitive navigation and responsive design contribute to smoother transactions on smartphones and tablets.

Mobile Wallet Integration: Embracing popular mobile wallets and payment apps streamlines the payment process. Integrating options like Apple Pay, Google Pay, and others caters to the preferences of mobile-savvy travelers.

  • Integration with Emerging Technologies —

The rapid evolution of technology introduces both opportunities and challenges for the travel industry. Integrating with emerging technologies such as blockchain, artificial intelligence (AI), and machine learning (ML) can revolutionize payment processing but requires careful consideration and strategic planning.

Solutions:

Blockchain for Security: Leveraging blockchain technology can enhance security and transparency in payment transactions. Blockchain’s decentralized nature reduces the risk of fraud and ensures the integrity of financial transactions.

AI and ML for Fraud Detection: Implementing AI and ML algorithms can strengthen fraud detection mechanisms. These technologies can analyze patterns, detect anomalies, and adapt to evolving threats, providing a proactive approach to security.

  • Regulatory Compliance and Legal Complexities —

The travel industry operates on a global scale, subject to a myriad of regulations and legal frameworks. Ensuring compliance with diverse international and local laws poses a significant challenge for payment processors and businesses alike. Failure to navigate these regulatory waters diligently can result in legal consequences, fines, and reputational damage.

Solutions:

Legal Consultation: Collaborating with legal experts specializing in international payment regulations can provide invaluable insights. Establishing a robust legal framework ensures that payment processes align with the various compliance requirements across regions.

Regular Compliance Audits: Conducting regular compliance audits helps identify any gaps or changes in regulations. Staying proactive in adapting to evolving compliance standards minimizes the risk of legal complications.

  • Chargebacks and Dispute Resolution —

Chargebacks, often stemming from customer dissatisfaction, unauthorized transactions, or fraud, are a common concern for the travel industry. Disputes can lead to financial losses, strained customer relationships, and added administrative burdens. Resolving chargebacks efficiently is crucial to maintaining a positive payment ecosystem.

Solutions:

Effective Communication: Establishing clear communication channels with customers can prevent misunderstandings that may lead to chargebacks. Timely and transparent communication regarding policies, refunds, and dispute resolution can foster trust.

Robust Documentation: Maintaining thorough documentation of transactions, including booking confirmations, terms of service, and customer communications, strengthens the merchant’s position in case of disputes.

  • Infrastructure Scalability and Reliability —

The travel industry experiences fluctuations in demand, especially during peak seasons and special events. Payment processing systems must be scalable to handle sudden spikes in transactions without compromising speed and reliability. Downtime or processing delays can have severe consequences, affecting customer satisfaction and revenue.

Solutions:

Cloud-Based Solutions: Utilizing cloud-based payment processing systems allows for scalability and flexibility. Cloud infrastructure can handle increased transaction volumes during peak periods, ensuring a seamless payment experience for customers.

Redundancy and Failover Mechanisms: Implementing redundancy and failover mechanisms in payment systems ensures uninterrupted service. Redundant servers and backup systems can mitigate the impact of hardware failures or other technical issues.

  • Collaboration and Interoperability —

The travel industry consists of a complex ecosystem of service providers, including airlines, hotels, travel agencies, and payment processors. Ensuring seamless collaboration and interoperability between these entities is essential for a cohesive payment experience. Incompatibility or communication breakdowns can lead to inefficiencies and errors in transaction processing.

Solutions:

Standardized Protocols: Adhering to industry-standard protocols for data exchange facilitates interoperability between different components of the travel ecosystem. This ensures that information flows seamlessly across various platforms.

Collaborative Partnerships: Establishing strong partnerships and collaborations between travel service providers and payment processors enhances communication and interoperability. Shared platforms and integrated systems can streamline payment processes.

Conclusion —

In conclusion, the payment processing challenges faced by the travel industry are multifaceted, requiring a holistic and strategic approach. From cross-border complexities to security concerns and regulatory hurdles, addressing these challenges demands a combination of technology adoption, regulatory compliance, and a commitment to customer satisfaction.

The industry’s future success hinges on its ability to adapt to emerging technologies, foster collaboration, and prioritize the security and transparency of payment processes. As we navigate the ever-evolving landscape of global travel, overcoming these challenges will not only enhance the efficiency of payment processing but also contribute to a positive and memorable experience for travelers worldwide. The journey toward a seamless payment horizon in the travel industry is ongoing, marked by innovation, resilience, and a dedication to elevating the overall travel experience.

Source: Pulse

Bridging the Gap between Fintech and Traveltech.

The integration of finance and technology, known as fintech, has revolutionised traditional banking and payment systems, transforming how we live, work and travel. Similarly, travel technology, or traveltech, has empowered travellers with convenient booking platforms and personalised experiences. It makes sense then that significant opportunity exists to bridge the gap between these two sectors to unlock their full potential — particularly in Africa.

Africa’s travel and tourism sector has immense growth potential. But a major hurdle that first needs to be overcome is the large percentage of the continent’s population who remain unbanked, particularly when it comes to facilitating payment for travel and tourism services. Additionally, there is a need to digitise existing products and services to enhance market access and the experience for all travellers and improve operational efficiencies for businesses operating in the sector.

From a fintech perspective, it is crucial to identify ways to facilitate transactions between businesses in the tourism sector and payment oversight entities. One successful example of this is mobile money, which has gained significant traction across Africa with platforms like M-Pesa in Kenya leading the way. Integrating mobile payment solutions into traveltech platforms can cater to the large unbanked population and provide convenient payment options for travellers throughout the continent.

Cross-border remittances already play a critical role in many African countries, as they heavily rely on payments made from the diaspora. Fintech can help here by facilitating affordable and convenient cross-border money transfers for travel purposes. Blockchain-based solutions, for instance, can reduce costs, improve transparency, and accelerate the speed of transactions, benefiting both travellers and their families.

Fintech platforms can introduce micro-investing or savings features specifically designed for travel purposes. By enabling individuals to save small amounts of money regularly, these platforms can help people build travel funds over time. Fintech solutions can also address the challenges of financial inclusion in Africa by leveraging alternative data sources for credit scoring and providing access to credit for individuals with limited formal banking history. This can empower more people to travel and support the growth of domestic tourism within the continent.

To better incorporate fintech into existing traveltech solutions, online travel agencies and digital travel platforms should consider integrating fintech solutions to streamline payment processes, provide secure transactions, and even offer financial services like micro-insurance or access to credit for travel expenses. Platforms like Airbnb, for instance, which have already disrupted the traditional accommodation industry could benefit from fintech integration to facilitate seamless and secure payment processes between hosts and travellers.

Africa’s rich natural and cultural heritage presents opportunities for sustainable tourism initiatives. Fintech can support impact investing in sustainable tourism by providing crowdfunding or investment platforms that connect travellers, local communities, and investors interested in supporting environmentally friendly and socially responsible travel projects. This could be realised through peer-to-peer lending or crowdfunding that supports the growth of alternative accommodation providers or local travel start-ups in Africa.

Loyalty programs are an essential tool for fostering customer loyalty and engagement in the travel industry. By leveraging fintech solutions, data analytics, and social impact initiatives, loyalty programs in Africa can enhance the customer experience. Personalised rewards based on local preferences can be integrated into mobile-first solutions, further driving customer retention, repeat bookings, and overall industry growth.

While there are significant benefits to integrating fintech and traveltech, it is crucial to address potential risks. Data breaches, identity theft, and unauthorised access to financial accounts are serious concerns that must be mitigated through robust security measures. Seeking guidance from mentors or professionals, implementing backup plans and alternative payment methods, prioritising data privacy, and complying with regulations are essential steps in managing these risks.

Regulatory compliance is another critical aspect to consider. Fintech and traveltech platforms must understand and adhere to relevant financial regulations, such as anti-money laundering (AML) and know-your-customer (KYC) requirements, to ensure compliance and build trust among users.

Moreover, the travel industry is susceptible to market volatility, geopolitical events, and natural disasters. To offset these risks, platforms must diversify their offerings, have contingency plans, and stay updated on market trends and advisories.

Access to capital can also be a challenge for fintech and traveltech solutions. Limited credit history or collateral may hinder entrepreneurs and businesses from accessing the necessary funds. It is important then to carefully evaluate fintech lending platforms and ensure alignment with financial capabilities.

Bridging the gap between fintech and traveltech holds immense potential for Africa’s travel and tourism sector. By incorporating fintech solutions into existing traveltech platforms, we can enhance payment processes, facilitate secure transactions, promote financial inclusion, and support sustainable tourism initiatives. However, it is vital to address potential risks and challenges through robust security measures, regulatory compliance, and contingency plans. With careful implementation and collaboration, fintech and traveltech can work together to unlock the full potential of Africa’s vibrant travel industry..

Source: bbrief.co.za

Sabre 2023 Data Breach Investigations Report.

The travel business today is facing an increased risk to their online security with a rise in cybercrime and phishing attacks. In addition, MFA is required for PCI DSS 4.0 and ISO 27001, SOC2 compliance. With the growing number of Industry standards that are required to mitigate risk, a robust approach to system security is critical.

How will Sabre Identify help you?

With an easy use of MobilePASS+ app you will be able to apply a one-time-passcode (OTP) to add an additional level of security to your Sabre access. This means that besides the usual Sabre credentials (EPR-PCC-Passcode) you will be prompted to input an OTP at sign-in to SRW360 or any Sabre secure sites (i.e.: Sabre Central).

This additional security will protect you from bad actor activities, preventing anyone that is able to gather your Sabre credentials to access the system without your authorization.

Product features

Sabre Identify works in conjunctions with MobilePASS+ applications, which may be downloaded in your device of choice. Once you request using Sabre Identify, you will receive instructions for easy download and enrollment for your user. Sabre Identify will mitigate unauthorized access, as even if someone is able to gather your credentials, accessing Sabre or Sabre secure sites will be limited to the access to your unique One-Time-Password.

To learn about Sabre Identify visit : Sabre or  contact marketing@sabron.com

NEW AMADEUS RESEARCH REVEALS TRAVEL INDUSTRY TRANSFORMATION PACE TO ACCELERATE

New global research from Amadeus has revealed a strong appetite for investment across the travel sector in 2024.

The Travel Technology Investment Trends research, which looks at eight sectors across the end-to-end journey in 10 markets – found that nearly all (91%) travel companies surveyed said that they expect ‘moderate to aggressive’ increases in investment in their organisations this year, while two thirds (67%) of senior decision-makers in the sector expect to increase investment specifically in technology this year when compared to spend in 2023.

Airports lead the way with an average percentage increase of 17%, followed by corporate travel managers with 15% and hotels on 14%. Airlines were fourth with a 13% increase, followed by travel agencies and travel payments on 13% and 12% respectively.

Smarter retailing, personalisation and driving digital efficiency are the top priorities for 2024 as full-service airlines expect to see an 18% increase in revenue from switching to modern retailing and are said to be optimistic that the transition to ‘Offer & Order’ will take place within the next four years.

NDC will be the top technology for implementation by leisure travel agents over the next 12 months as 40% of the agents surveyed said this is their focus.

In total, 60% of airports expect to roll-out biometrics across the complete airport experience in the next five years, including check-in, bag-drop, lounge and boarding.

In the hospitality sector, 85% of respondents anticipate personalization could help them to deliver more than 5% growth in incremental revenue.

It found that a third of corporate travel managers said its organizations intend to digitize the complete end-to-end expense management process over the coming 12 months, while a travel payments leaders confirmed its organizations are planning to better manage global payments flows by implementing payments orchestration in the next 12 months.

Decius Valmorbida, president, travel of Amadeus, said: “The findings match our on-the-ground experience with customers – every area of the travel industry is increasing investment in digital transformation. It’s crucial this spending delivers maximum impact and improves the traveler experience across the travel ecosystem.

“Existing technologies, such as biometrics, are already helping to make trips more contextualized and relevant.

“At the same time, the emergence of Generative AI promises to increase the pace of change still further. Travelers will experience significant improvement to the on-trip experience in the coming years, with commitment, investment and collaboration across the ecosystem combining to make travel work better.”    

Francisco Pérez-Lozao Rüter, president, hospitality of Amadeus, added: “We know that the right technology is the key to connecting and unlocking the value of our travel ecosystem. Hoteliers, airlines and the whole sector are right to be ambitious about the next generation of technology that we are building together.

Travel providers can see huge potential for a better customer experience as well as significant growth and control if they get their investment strategies right now. We can see clear ambition and commitment to evolution from this research and are excited to be at the forefront of this journey with our customers.”

The survey which was conducted online in Q4 of 2023 found the Top priority technologies for 2024 to be machine learning, data analytics, digital payments, digitalisation and cloud computing.

By 2029, respondents said their most important technologies will still be machine learning but this time it will be followed by Generative AI.

Cloud computing shoots to third most important, from last in 2024, followed by digital payments and data analytics as their smallest priority.

The results of Travel Technology Investment Trends will be launched in Extended Reality in an Amadeus Lounge created in collaboration with Amadeus’ strategic partner Accenture.

During the first half of this year 2024, Amadeus will release in-depth reports examining each sector explored in the research.

Source: Travolution

Kenya Airways Completes Integration with ARC Direct Connect.

Airlines Reporting Corp. (ARC) and Kenya Airways have completed the airline’s New Distribution Capability (NDC) integration with ARC Direct Connect. This partnership enables Kenya Airways to offer richer content and detailed information through its booking platforms for travel agencies while providing a consistent settlement experience through ARC’s trusted platform.

With this integration, Kenya Airways customers will now be able to get real-time updates, personalized itineraries, and improved ancillary services.

“As our distribution strategy evolves, we recognize the imperative of an NDC solution that aligns with the dynamic needs of our customers. This collaboration with ARC is a pivotal step forward in our journey toward customer centricity,” said Julius Thairu, chief commercial, and customer officer at Kenya Airways. “Kenya Airways remains steadfast in its commitment to elevating the customer journey, and this collaboration marks a significant leap forward in achieving that goal. We are excited about the possibilities Direct Connect unlocks in the U.S. market, and we look forward to setting new standards in the aviation industry.”

Introduced in 2018, ARC Direct Connect gives airlines the flexibility to implement distribution strategies that best suit their needs and manage travel agency partnerships.

ARC accelerates the growth of global air travel by delivering forward-looking travel data, flexible distribution services and other industry solutions. The travel intelligence company possesses a comprehensive global airline ticket dataset, including more than 15 billion passenger flights representing 490 airlines and 230 countries and territories. For more information, visit arccorp.com.

Source: Travel Agent Central.

2024 Amadeus report: Global business travel booms with new trends & tech.

2024 marks a rebound in business travel, shaped by new trends and tech for enhanced value, as explored in the “Global Business Travel Trends 2024″ report.

This year is poised for a resurgence in corporate travel spending, reaching levels reminiscent of those in 2019. The landscape of business travel has evolved considerably over the past five years, with today’s business travelers demanding more value and benefits from each journey. Emerging technologies, particularly in the realm of Generative AI, are playing a crucial role in enhancing the overall travel experience.

The latest insights into these developments are highlighted in the “Global Business Travel Trends 2024” report, a collaborative effort by Globetrender and Cytric Easy from Amadeus. The report identifies seven key trends that are expected to redefine the corporate travel experience in 2024, including AI-powered personal assistants, executive outdoor retreats, and innovative strategies like “Objective Stacking.”

Revolution in Self-Managed Travel with AI Personal Assistants

The rise of Generative AI is transforming the way corporate travelers plan their trips, introducing AI Personal Assistants that offer round-the-clock support. These digital assistants can assist with everything from suggesting travel itineraries to helping travelers adhere to company policies, all through user-friendly, conversational interfaces.

The Emergence of Executive Outdoor Retreats

The concept of team-building activities is evolving into more extensive, nature-based retreats that offer a range of engaging and sometimes challenging experiences. These retreats aim to build team spirit and loyalty, taking participants out of their comfort zones with activities like rafting and wilderness survival.

Maximizing Business Travel Value with “Objective Stacking”

As companies face growing pressures to be financially and environmentally responsible, employees are expected to justify the necessity of their business trips. The concept of “Objective Stacking” involves planning trips to achieve multiple objectives, thereby increasing efficiency and value.

Blended Itineraries Take Precedence Over Strict Travel Policies

2024 sees a shift towards more flexible and personalized corporate travel policies, allowing for blended itineraries that combine business and leisure elements. This approach prioritizes the traveler’s experience and well-being.

Corporates Strive for Net Zero Emissions with Sustainable Travel Strategies

Following the COP28 agreement, companies are increasingly committing to sustainability goals. The travel industry is no exception, with strategies like “Objective Stacking” and flexible travel policies aiding in reducing carbon emissions.

Advancements in Digitized Expense Management

The shift towards digital expense management and virtual cards represents a significant change in corporate finance, simplifying processes and enhancing security and compliance.

Power Networking: Making the Most of Global Events

The focus is now on maximizing every opportunity at conferences and events, with a shift towards more purposeful networking and richer itineraries that extend beyond the main agenda.

Globetrender CEO Jenny Southan and Amadeus Cytric Solutions’ Deborah Mahoney emphasize the importance of discernment in business travel, balancing the need for in-person interactions with financial and environmental considerations. The future of corporate travel is marked by technological advancements and a return to basics, highlighting the significance of human connections and optimized travel experiences.

Source: Travel and tour world.

How Fintech is Reinventing Travel Payments.

The travel payments industry is undergoing a profound transformation, driven by the rise of fintech, evolving consumer preferences and changing market dynamics.

A 2023 white paper by Mastercard, titled “Embracing a virtual future of B2B travel payments”, explores these transformations and their impact on the sector.

The paper discusses how the pandemic has triggered a reevaluation of business-to-business (B2B) payment practices, the growing prominence of the merchant of record (MoR) payment model, and the increasing adoption of virtual cards.

Traditionally, travel agencies mainly served as intermediaries, transmitting consumer payment details to various service providers in an individual’s travel itinerary. However, the expanding network of suppliers has made this “pass-through” approach riskier and more cumbersome for both agencies and consumers.

To address these risks, an increasing number of travel agencies are shifting to the MoR model where the travel agency collects customer payments for all booked services, authorizes transactions, and then disburses payments to the specific suppliers associated with the booking.

The MoR model not only addresses these challenges but also opens up new opportunities for suppliers, allowing agencies to offer consumers new payment options such as installment methods and buy now, pay later (BNPL) arrangements.

The report notes a significant migration from the pass-through model to the MoR model, with travel agents acting as MoRs posting a compound annual growth rate (CAGR) of 43% from 2020 to 2022, a growth rate that’s more than double than that of the overall online travel agency market of 20% CAGR.

Another trend outlined by the Mastercard white paper is the digitalization of business-to-business (B2B) travel payments, with virtual cards in particular emerging as an appealing payment option. Virtual cards are essentially digital versions of physical payment cards. Virtual card numbers are digitally generated, PCI-compliant and single-use card numbers that are accepted everywhere traditional payment cards are.

According to Mastercard, virtual cards provide a unique, traceable link between booking and associated payments to third-party suppliers. They allow travel agencies and suppliers to easily track and reconcile payments, while offering benefits such as flexible pricing, financing options and card payment guarantees.

This results in a more streamlined payment experience for travel agencies and their customers, as well as travel suppliers. Transactions are also more secure, with Mastercard data revealing that the risk of fraud is 30 times lower when using virtual cards compared to traditional payment cards.

A 2023 infographic produced by Up in the Air, a travel payment consultancy from the Netherlands, depicts a dynamic and diversified B2B travel payment landscape.

This landscape comprises popular payment card schemes such as Visa, Mastercard and American Express; virtual card issuers such as banks; payment technology companies such as Stripe, Nium and Airwallex; as well as travel payment pure players such as Outpayce, a B2B payments business serving the travel industry, Mystifly, an airfare distribution and payments settlement marketplace platform, and iOL Pay, an automated payment acceptance solutions for the hospitality industry.

 Source: Fintech News.

Sabre and IAG expand partnership with multi-year distribution agreement including NDC content.

Sabre Corporation (NASDAQ: SABR), a leading software and technology provider to the global travel industry, has entered into a multi-year distribution agreement with International Airlines Group (IAG) that will expand their existing partnership and further promote modern travel retailing practices.

The agreement will allow Sabre-connected travel buyers and agencies to sell traditional EDIFACT content as well as having competitive access to NDC offers from British Airways, Iberia, Aer Lingus and Vueling – including Additional Price Points and ancillaries – through the Sabre travel marketplace globally. This enhanced content will provide travel agencies with a wider range of options to compare and shop for, while travelers will benefit from an improved experience with more choice and transparency. Sabre and IAG’s airlines are working closely together and will communicate as NDC content is rolled out to Sabre-connected travel agencies on a carrier-by-carrier basis.

The agreement between Sabre and IAG underscores the industry’s shift towards modern travel retailing, where airlines can differentiate their offerings and provide more personalized experiences to travelers. Both Sabre and IAG are committed to advancing the NDC standard as a key component in the industry’s evolution towards modern airline retailing enabled by offers and orders.

Colm Lacy, British Airways’ Chief Commercial Officer, said: “We are on a journey to A Better BA and we continue to invest across the business as part of that commitment. Not only are we improving the experience of those customers who fly with us, but also the way we work with our valued travel agent and travel buyer partners. We understand how valuable retailing is to them, and IAG’s partnership with Sabre allows us to make a wide range of attractable offers available even further across the globe.”

This agreement is another milestone in the IAG strategy to embrace digital retailing practices and offer more opportunities for customers to access NDC content. The partnership with IAG demonstrates Sabre’s continued commitment to driving value and serving the diverse interests of the global travel ecosystem.

“We are very excited about what’s ahead. The travel industry is entering a new era of personalized retailing that will bring better experiences for travelers and new revenue opportunities for airlines and travel agencies,” said Roshan Mendis, Chief Commercial Officer, Sabre Travel Solutions. “It’s fantastic to work with a strong, forward-thinking partner like IAG that is just as committed as we are to driving the industry forward.”

Source: Sabre.