More global travel, and people travelling to more exotic locations, is a theme we will see grow in the next five years.
More exotic holiday destinations, unusual travel experiences and digital disruption are all creating new commercial opportunities for travel companies, something which will continue growing in momentum. Indeed, the travel and tourism industry is expected to outperform the global economy over the next decade, growing 4% year-on-year1. But with new opportunities comes new challenges and travel companies will need to make some preparations to compete in 2017. Here are four trends to get ahead of:
More risk to manage on a global scale
More global travel, and people travelling to more exotic locations, is a theme we will see grow in the next five years. This is driven by a shift to ‘cultural experience’ holidays, as opposed to the traditional beach getaways. Indeed, MasterCard’s latest Global Destination Cities Index2 found Osaka, Tokyo, Seoul, Bangkok and Dubai have all surged in popularity over the past couple of years as we broaden our horizons. For travel providers, this means dealing with new, and potentially unknown, suppliers across the world. With 50% of travel firms already stating that credit card fraud is their biggest challenge, according to Phocuswright’s research, protecting against fraud and working with safer solutions will become an even bigger priority and mountain to climb in the future.
Greater chance of currency volatility
Major political and economic events across the world have seen currencies fluctuate dramatically – at times we saw the pound tumble to its lowest level in three decades3. Such volatility is massively impacting some travel companies. With many unable to absorb the hit because of tight margins, they have no choice but to recoup the loss and it is their customers that are left having to pay the price through things like surcharges. Situations like this can be easily avoided if travel companies take simple steps to insulate themselves from currency fluctuations. Today there are FX options which allow travel companies to lock in the currency rate at the time of booking, so when it comes to payment there aren’t any nasty surprises.
Hidden fees could be lurking
With more overseas suppliers, managing international payments efficiently will be critical to staying competitive and protecting margins. Companies should be mindful of financial drains, including hidden bank charges and mark-ups from providers, that could be undermining their efforts to catering for consumers’ demand for holidays further afield. In fact, businesses could be paying up to 3% more on their cross-border transactions through such hidden charges4, as well as mark-ups from providers. Companies should use local currency settlements to avoid these cash drains.
Frictionless payments enhances customer experience
With ever increasing competition, creating a fast and easy customer experience is a key factor in converting sales. The more hassle-free the booking and payments experience, the more likely customers are to book and book again. Yet, one in four companies is being held back by tracking their payments and commissions manually, according to recent research carried out by market research firm Phocuswright4. Not only is this slowing down internal processes and hampering the customer experience, but it’s also resulting in a huge 215 million euros of unnecessary annual waste5. Automating payment processes will help to improve the customer experience, and make it possible to reinvest money into innovations elsewhere in the company.
1. World Travel and Tourism Council, Economic Impact 2016: http://www.wttc.org/-/media/files/reports/economic%20impact%20research/2016%20documents/economic%20impact%20summary%202016_a4%20web.pdf
2. MasterCard Global Destinations Cities Index report: http://newsroom.mastercard.com/wp-content/uploads/2016/09/Global-Destination-Cities-Index-Report.pdf
3. Bloomberg, October 2016: https://www.bloomberg.com/news/articles/2016-10-04/pound-tumbles-to-three-decade-low-as-angst-over-brexit-persists
4. eNett analysis of Payments Unsettled Report 2013
5. PhocusWright Payments Unsettled Report 2016: https://www.enett.com/new-research-unveils-europe-s-travel-industry-shifting-to-alternative-payment-methods
Anthony has been Managing Director and CEO of eNett international since its inception in 2009. His career is characterised by innovation and entrepreneurial vision. Anthony has led eNett’s development from start-up to becoming one of the world’s leading travel payment companies, delivering ongoing exponential annual growth. Bringing more than 15 years of comprehensive business strategic and operational knowledge to the business, Anthony’s leadership spans the telecommunications, internet, human services, retail, financial services and travel sectors. As a founder of Optal (formerly PSP International), he combined his experience in payments and travel to create eNett International. A patriot and with a penchant for controlling the music at events, Anthony has been known to lead team huddles with a sing-along to ‘True Blue’ by John Williamson.
