However, now more than ever, B2B payments need to help elevate the customer experience for travel intermediaries. Slow, inefficient, complex technological solutions or outdated manual payment processes are a problem for not just the travel agent, but for the traveler themselves. ��Travel agents who adopt and partner with innovative and reliable B2B payments suppliers, will ultimately enhance the experience of the end travel consumer.��

With Global Customer Experience Day being celebrated this week, it’s useful to consider the role that B2B payments can play in aiding the wider recovery of the travel industry.

Enhance the choices you give your travel customers

Providing a wide range of easy, accessible choices is critical to creating the best customer experience. Travel agencies should prioritize expanding their payment options as part of this practice of providing choices. The broader the choice of payments offered to consumers, the better the customer experience, and the higher your conversion rates. The efficacy of this practice becomes most apparent when the customer’s tried and true payment method is in the mix.

Instead of travel agencies convincing their suppliers to accept multiple forms of payment, instead, they should simplify the way suppliers are paid, to mitigate any concerns about acceptance. For example, a universally accepted payment, such as virtual crds or ‘Virtual Account Numbers’ (VANs), can integrate easily with existing booking and property management. Suppliers are paid with a 16-digit number, regardless of the consumer payment type received by the OTA. Not only is this fast and easy, but it also benefits travel suppliers by reducing the risk of fraudulent card transactions.

In addition, innovative B2B payment providers such as WEX, can offer multiple card schemes, payment types, currencies, issuing and settlement locations – giving travel companies optimal choice and flexibility, which in turn can be passed on to the end customer.

Unlocking efficiencies: Return resources to the end-customer

The more administrative efforts required to manage supplier network and payments processes, the more resources will then need to be diverted away from value-add activities. Travel businesses concerned with stabilizing business volumes will consider tackling this resource drain a priority.

Travel intermediaries who’ve invested in their B2B payments processes will be able to resolve this more readily than those who haven’t. By using end-to-end payment solutions that are based off automation and leading technology, travel agencies experience greater efficiencies, benefit from automated back-end payment processes and mitigate against the risks that manual, cash-based payment systems present. In turn, the efficiencies and resources found in digital adoption can be then leveraged to help elevate the end-customer experience.

WEX’s research in partnership with ‘The Economist’ showed that 86 percent of those surveyed agree that companies that lead with technology will thrive in recovery from the current economic and health crisis and that and 83 percent have leveraged payment technology to innovate new sources of business value. These metrics are a testament to the opportunity that can come from digital payment transformation.

Payments technology can provide trust and security to customers

While consumers reduced their travel spending in 2020, fraudsters maintained their hold on the industry. Based on data from Sift’s Q1 2021 Digital Trust & Safety Index, fraud attempts increased across a range of industries, which appears to be fraudsters taking advantage of the disruption occurring due to COVID. The online travel segment alone saw a 20% increase in fraud attempts. This, in turn, has heightened the need for travel agencies to lean on their payments providers for protection and security. Travel agencies need to be able to reassure their customers that there’s nothing to fear, and get them back to traveling.

Once again, this is where B2B payments have a crucial role to play. The use of VANs was already on the rise pre-pandemic, and demand is accelerating as its benefits help travel companies build trust among their customers. VANs offer an attractive alternative to traditional cards and have fraud prevention features. For example, VANs can be set up to only be used once: even if the data is subject to a breach, the card can’t be used again if the supplier has already processed the payment. In addition, with VANs, parameters can be set to control the types of purchases accepted, the maximum purchase amount, and when the purchases can be made. This ultimately helps travel intermediaries provide their customers with a safeguard against fraud by allowing only the specified charge to be processed.

Looking ahead: Prioritizing customer experience and payments

Since COVID-19, companies have needed to place a renewed focus on customer experience strategy to build meaningful relationships with their customers.

In addition to increasing efficiencies through process automation, businesses will be looking to those providers that can go the extra mile. Partners that offer flexibility, stability and assistance to businesses looking to deliver a better customer experience will be the ones that thrive in this new reality. This is done in part by adding value beyond payment processes.

Learn more about how ����Vlogpayment solutions can be tailored to your travel business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.

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The travel industry is missing a trick by letting B2B payments fall through the cracks. It’s time to talk about a missed opportunity when it comes to suppliers thinking about B2B travel payments. Specifically, that agents and airlines should be aligning their B2B payment strategies to support the focus on retailing and the necessity to adapt to the “merchant model.” Read further to hear my thoughts on the subject.

How has technology changed payments in the travel industry?

Over the years, technology has changed the face of travel in many ways, including:

• The customer buying and payment experience has changed
• With the rise of online retailing, global competition has increased
• Travel companies are able to better understand their customers and enhance the end-to-end traveler journey

As the travel distribution landscape has changed, so too has the business model of the travel suppliers working within it. Over the years, we’ve noticed that both airlines and travel agencies have a keen focus on adopting the retailing model to give their customers the best possible experience (and rightly so), including shoring up their B2C payments processes. However, only focusing on this aspect of how they do payments, ends up leaving a gap in their business strategy when it comes to how they transact with each other. For travel agents, this means having a solid strategy on how they pay suppliers once they have received payment from customers. And for airlines, this means not only considering the best way to accept payment from their customers, but also from their agents too. Not thinking about this aspect of the way they do payments, ultimately has a negative impact on the end customer they’re trying to serve in the first place.

Use of the “merchant model” to adapt to new payments technology

To successfully operate the retailing model, travel agencies have identified the need to control the payment transaction.�� This means adopting the “merchant model” so agents can still deliver the customer experience that allows them to remain competitive and retain customers.

Some airlines have already identified the impact to their business and customers’ experience from the way they receive B2B payments; and are now linking payments with their distribution strategy. However, this needs to be considered more widely across the travel industry.

When both parties begin to appreciate the impact from the missed opportunity of working together, they can begin to have constructive commercial discussions and ultimately agree on a payment strategy that benefits all parties in the travel value chain. And now, as the travel industry begins to recover from various government-imposed travel restrictions associated with COVID-19, it has never been more important to have these conversations.

How to move the travel industry forward during times of change

����Vlogis committed to working with airlines, travel agencies and other stakeholders to provide travel payment solutions that benefit all participants in the value chain. We see this missed opportunity as a very important topic and therefore would like to keep the conversation going.

Let’s continue discussing various angles on this topic, expanding on the limitations of the current B2B travel landscape, diving deeper into how airlines and agents can work together to benefit both parties, and ultimately how they can leverage payments to optimize their customer’s experience with the “merchant model.”

Learn more about how ����Vlogpayment solutions can be tailored to your travel business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.

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Intermediated payments for travel experiences are complex – here are 5 factors to be aware of:

1. Wide variations in payments capabilities – the experience supplier market is highly fragmented so there’s a lot of variety in payment capabilities, processes, systems and company preferences.
2. Navigating the global value chain – a single transaction may have to comply with rules and regulations around payments and data within and across multiple jurisdictions, which can make the intermediated experience booking process more complex.
3. Consumers’ buying behavior is different – it’s hugely important for travelers to be able to have instant booking and payment confirmations for experiences, especially when booking in- This gives them piece of mind that their purchase has been successful and could contribute to brand loyalty.
4. Security and fraud risks are heightened – because the experiences market is so diverse and fragmented, there’s a higher risk of fraud or supplier defaults. A lack of standardization in payment flows in the intermediated experience chain can also exacerbate these risks.
5. The age-old complexities of payment continue – Alike other types of travel distribution, OTAs selling experiences must continue to deal with general complexities in payments and the costs they can cause; for example, foreign currency conversion.

Only through nailing their B2B payment processes will OTAs be able to provide their customers with the convenience, flexibility, and diverse experience options they want and will increasingly demand. Agencies who pay experience suppliers with ����VlogVANs can typically offer a wider range of experiences to their customers, while accepting many more payment options from them too. They’re also more likely to be able to offer travelers bundles and simpler pricing – streamlining and enhancing the customer experience.

VANs don’t just benefit end-users; they also unlock value for other parties involved too:

For OTAs – ����VlogVANs can be accepted by any experience supplier that can accept a Mastercard online, freeing up travel intermediaries to accept a wider range of payment options from end travelers, while making outbound payments with ����VlogVANs.

The fraud risk is also near zero, thanks to the multiple card controls and unique card numbers that ����VlogVANs use. In addition, payments processes such as reconciliation are much easier, quicker and in many cases can be automated – freeing up teams to spend their valuable time on more important tasks

For experience suppliers – accepting VANs from intermediaries means suppliers can protect themselves from the risks and costs of accepting many different customer payment types. They’re also able to be paid quickly and safely. This streamlined payment experience can ultimately lead to significant time and cost savings and a hike in sales volumes.

In a recent research report, “Experiences in Travel”, ����Vlogexplores the market for experiences, one of the most exciting and fastest growing segments in travel. The report covers market definition, size and growth, dynamics, customer behaviors, and the opportunities for agencies to capitalize. The market for experiences is significantly different to the market for transport and accommodation. Getting B2B payments right is key to bringing travel experience bookings online.

Learn more about how ����Vlogtravel payment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.

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In our latest “Virtues of VANs for Hotels” report, we’ve outlined the following top pain points that hotels are experiencing as a result of payment complexity when using invoices:

1. Full invoice-to-pay cycle can take a long time, increasing costs and risks: It typically takes more than 30 days after a guest checks out to receive payment when hotels rely on invoicing travel agencies. Even if hotels do get paid within 30 days, this delay costs them around USD3.70 on an invoice of USD500, plus an additional USD6.25 in invoice production and reconciliation efforts.
2. Invoicing carries with it the risk of bad debts: Hotels that invoice travel agents after a guest has departed are extending trade credit to travel agencies, which can result in a bad debt rate of between 0.5% to 3%. Credit management, bank guarantees, and floating deposits offer ways of mitigating this risk but can be problematic in their own right.
3. Invoice mistakes can lead to missed revenue or costly disputes: Hotels that rely on invoicing for payment run the risk of producing invoices for amounts that are too low or in some instances, end up not producing an invoice at all, meaning that potential revenue can remain uncollected. Additionally, invoices may also be produced for amounts that exceed agreed rates, leading to long and costly disputes.

These are just some of the key invoicing pain points that are outlined in our report. However, hotels can reduce or eliminate them by moving to ����VlogVirtual Account Numbers (VANs). As well as offering simpler, faster processes and quicker payment cycles, ����VlogVANs can also help hotels significantly reduce the likelihood of fraud and chargebacks.

Additionally, Online Travel Agencies (OTAs) are usually best placed to accept the preferred payment methods of end consumers, especially where those payment methods are not accepted at the hotels where they wish to stay. OTAs can then make the payment to the hotels with an ����VlogVAN, which can be accepted anywhere that a Mastercard is accepted online. This helps improve traveller experience, increase hotel occupancy, and saves costs for hotels that may otherwise need to develop their own payment acceptance capabilities. A win-win for travel agencies and hotels.

Learn more about how ����Vlogtravel payment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.

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China is the first country where mobile represents the majority of online bookings—68% in 2017 (up 66% from just five years before). Phocuswright estimates “by 2021, mobile will account for 85% of China’s online travel market, almost twice the share of mobile travel in Japan and India.”

In a 2017 study by , they found that Chinese respondents took, on average, 2.1 trips from 2016-2017, and they were planning 2.7 trips in 2018. “Among all Chinese tourists who traveled overseas in 2017, 67% had traveled to other Asian countries or regions and 51% to Hong Kong, Macao, or Taiwan, while 38% had been to Europe, 25% to North America, and 20% to Australia/New Zealand.”

A Travelpulse.com article on APAC travel trends reports, “relaxing getaways were far and away most popular with Chinese travelers. Chinese travelers were also very into s and taking family vacations.”

China’s staggering travel volume may overshadow others in the region, but there are some interesting things happening with bookings in other APAC countries. For example,

are projected to grow 38% between now and 2021, and Malaysia and Thailand bookings will increase by 30% during the same time.

Skyscanner’s 2017 Singapore Travel Report examined the of thousands of Singaporean travelers over three years and found increases in searches for Asian destinations such as Kathmandu (106%), Okinawa (121%) and Amritsar (217%).

In a , the Singapore Tourism Board notes that this group has limited vacation time so they tend to take shorter trips (2-3 nights) within the region. They often undertake price comparisons on multiple channels and then take advantage of the offer that is the best value. The report finds that planning usually takes place about a month before they travel “since most of the trips were to familiar destinations which required less planning.“ Travel from Hong Kong is predominantly within Asia, with China as the top destination, since its proximity allows for shorter trips.

Looking at the dynamic APAC travel market as a single entity would be a mistake. This diverse, and fragmented, region offers incredible opportunities, but it’s important to tailor strategies for specific audiences. Of course, one of those strategies needs to focus on mobile.

For more about the APAC travel market see Asia Pacific Travel Market Growing At A Rapid Pace��and More Mobile & OTA Bookings—More Intra-Regional Travel.

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According to �ʳ�dz��ܲ��ɰ��������’s 10^th edition of , mobile’s share of the APAC online travel market was 48% last year, and not surprisingly, China led the way with 68% of bookings done on mobile devices. When booking with OTAs specifically, mobile devices were used for the majority of the time (53%).

Phocuswright reports, “Online travel agencies (OTAs) play an integral role in research and buying. OTAs are also pushing mobile sales more than suppliers, which are yet to make a meaningful impact on that platform.” They predict OTAs will outpace direct online bookings by 2020.

A significant contributor to the APAC travel market’s sustained growth is increasing intra-region travel. In the 2018 Air Travel Outlook Report, Airline Reporting Corporation describes it as “incredible intra-Asia traveler volumes driving international arrivals into airports across the Asia region, much of this concentrated within North Asia.”

Raini Hamdi touches on this in a 2018 Skift.com piece on the growth of , particularly “newly rich millennials” who he explains “want to play in Asia” because “prices are lower, service standards are higher, and tourist attractions are as diversified as the Asian luxury travelers themselves.” He cites several online tour and activities companies, including Localalike (Thailand), Backstreet Academy (Singapore) and Klook (Hong Kong) as startups that “deliver what these travelers want the way they are used to having it.”

Check In Asia lists “driving domestic demand” as one of its 10 trends in Asian tourism. “Traveling within national borders is gaining popularity Asia-wide. In South East Asian nations like Malaysia, Thailand, and Indonesia, homegrown tourists take advantage of competitive LLC sectors for a long weekend and public holiday escapes.”

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APAC’s 2017 aggregate gross bookings (US$386.4 billion) make it “the world’s biggest regional travel market.” The report notes that in terms of online travel booking, APAC’s double-digit increase last year has it “quickly catching up with the US and Europe” with predicted growth “upward of 10% each year through 2021” when APAC gross bookings are expected to be 48% of the worldwide travel market.

The Airlines Reporting Corporation’s 2018 Air Travel Outlook Report, developed in partnership with Expedia, finds “the biggest driver of demand in the airline industry will be the Asia-Pacific region. The region will be the source of more than half of new passengers worldwide over the next two decades.” The report predicts that China will move into the top spot for largest aviation market in the early 2020’s.

In this series of blog posts we’ll be exploring the travel market across the APAC region in more detail – focusing on key trends including the dominance of mobile and performance of individual markets. Stay tuned for more…

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The way you pay your suppliers can have a huge impact on how you manage your cash flow. Through the use of VCNs, you can pay your suppliers on time while improving your cash flow and even generating additional income. Here are six ways VCNs can help:

1. VCNs give you more flexibility with payment deadlines by providing access to a credit line at no cost. This flexibility allows you to pay your suppliers according to their terms and then settle with your VCN provider at a later date. This extra time gives you a buffer to allow customer payments to come in or to invest your working capital in other areas to grow your business.
2. Quicker payments create better supplier relationships. Since VCNs allow you to pay suppliers more quickly, you can also benefit from early payment discounts and better terms with suppliers in the future.
3. VCNs create an extra revenue stream. Unlike traditional payment methods, such as checks or bank transfers, with VCNs you can earn rebates on payments made. This means more money coming in to use as working capital for your business.
4. VCNs save up to 3% on each international payment. When you pay your international suppliers with VCNs, you save on FX rate mark ups and cross currency fees, which typically add up to 3% per transaction.
5. VCNs help you save the interest fees you’d pay on corporate loans or overdraft services. When you use credit-funded VCNs instead of prefunded payment methods you avoid the need to take corporate loans out or use overdraft facilities to cover cash flow gaps. Therefore, you save on the interest you would have paid and can use that cash toward other areas of your business.
6. In addition to the many ways you can save money and generate extra income by paying your vendors with VCNs, there’s one more benefit that can improve your bottom line indirectly. The enhanced data capture that is available with VCNs can greatly improve efficiencies in your accounting process and can even free up resources in your accounts payable team.

VCNs, while just one tool in your cash flow management toolbox, can be a critical tool in helping you improve working capital. With just one payment method, you can effectively manage payment deadlines while generating additional income, saving on fees and improving your processes overall.

Learn more about how VCNs can help your business improve cash flow – download our fact sheet ‘’ or read our blog post ‘The Innovative Way to Optimise Cash Flow & Working Capital’.

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Spending Strong, Destination Preferences In Flux

�ʳ�dz��ܲ��ɰ��������’s reports that projected travel gross bookings by Germans reached 58.8 billion Euros in 2017, a 3% increase from 2016. While long a strong travel market, the Germans’ love of travel is on a continued upward trend. The same report shows projected growth continuing at 3% through 2021.

Not only do Germans take many trips, but according to the Phocuswright report, they also have the highest per-trip spend than those in other major European markets. A showed that the average holiday budget per household last year was
€ 2,771.��This survey also shed light on popular destinations. Half of participants said they’d likely head to the beach, while city breaks were nearly as popular at 45% and nature holidays were preferred by 38% of respondents. In terms of specific destinations, 66% said they planned to stay within Germany, while Spain was the most popular international destination with 23%. Italy (18%), Austria (17%) and France (9%) followed. Overall, travelers reported that safety was a major concern for 2017 and that they were less likely to travel abroad than in previous years.

The Phocuswright report also indicated that Germans were heavily influenced by safety concerns last year and were more likely than in previous years to stay within Germany or stick to the relative safety of Spain, Greece, and Italy. Turkey, which previously had been second only to Spain, saw a sharp drop off in German travelers due to the unstable political environment. North African destinations including Egypt and Tunisia have also seen a tapering off in the last few years.

The story for 2018 seems to be changing, though. Skyrocketing prices in Spain have made Germans look for alternatives. Greece continues to grow in popularity while Turkey and North Africa seem to be making a big comeback this year, based on airport destination data for travel bookings.

Online And Mobile Bookings Increasing

While the majority of Germans still book travel offline, online and mobile are growing quickly. Online gross bookings were projected to be 42% last year, bolstered by an internet penetration rate of 90% in Germany, . Projections over the next five years show a robust 7% annually for online bookings.

Mobile bookings continue to increase and were expected to be 25% of online travel gross bookings in 2017, second only to the UK among European nations. Rail suppliers such as Deutsch Bahn are leading the way in the mobile space. Deutsch Bahn alone already sells over 10 million tickets annually through the DB Navigator mobile app.

Changes In The German Travel Market

Last year saw some major changes to the German travel industry. Air Berlin declared bankruptcy and ceased operations in the fall, resulting in Lufthansa purchasing parts of Air Berlin’s business, including 81 aircraft and its subsidiaries LGW and Niki. Lufthansa is currently awaiting permission by the European Commission to to its schedule to accommodate Air Berlin’s absence and to stabilize rising prices.

On the hotel side, global chains such as Hilton, IHG, and Motel One are contributing to hundreds of new hotel builds, renovations and property conversions that are creating a record number of overnight stays, as well as an increased demand for hospitality workers.

On 1^st July 2018 the New Package Travel Directive will come into law across the EU and in Germany. The directive means that selling two separate travel products from different suppliers in the same transaction will be classified as a tour and therefore subject to the same regulations. This was designed to cover online bookings, offering additional protection to travelers, but also impacts traditional travel agents who sell the bulk of package holidays in Germany.

fvw.com reports that Germany is putting in place regulations to cover the directive and also provide travel agents with some level of protection by allowing them to take one payment for two products providing both those products are invoiced separately. Travel agents are preparing their staff for this change with additional training.

The overall picture for the German tourism industry is extremely positive. Currently the tourism industry employs more people than the robust automotive industry, and it continues to expand to meet the rising demands. ��With economic growth, rising consumer confidence, Germans are traveling more than ever both within their own country and beyond.

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