Travel industry to drive payment innovation with a more personalised experience, study shows

Travel Payments Study 2018, which conducted 78 interviews with payments managers from hotels, airlines and travel intermediaries, highlights a growing appetite to innovate in payments. Over 95% of interviewed companies plan to introduce new payments innovations in the near future, with over 14% planning a ‘lot of new innovations’. Factors such as meeting customer needs were cited as driving innovation, with the continued focus on delivering a more personalised customer experience an important payments objective.

Despite this bright prospect travel payments, managers highlighted significant complexity as a key barrier to innovation today, with 85% of companies confirming an increase in the number of accepted payment methods over the last five years. The average number of methods accepted by respondents is nine, with companies having added an average of three new methods over the past several years. Similarly, the vast majority of travel companies (over 80%) work with between 3-10 different suppliers of payments services, increasing operational complexity still further.

The study also found that travel companies spend on average 5.3% of their revenue on managing payments, including acquiring fees, fees to all providers and other indirect costs. That equates to USD 74.5 billion across the industry as a whole. Smaller firms pay disproportionately high fees, with those earning under USD 15 million averaging 7.5% of revenue. This compares to just 3.8% for travel companies generating USD 1 billion+ in annual revenue.