Decision Brief: Empowering Direct Suppliers in the Travel Space With Seamless Online Payment Strategies

As the travel industry experiences a post-pandemic resurgence, direct suppliers, such as airlines and hotels, are focusing on capturing consumer attention and spending to mitigate the costs associated with online travel agencies (OTAs) booking and platforms, which still dominate the industry. Managing payments across geographies, currencies, and distribution channels also presents intricate challenges. The complexity is magnified in scenarios involving cancellations, refunds, or credits. Not to mention concerns around fund flow management, acceptance costs, and handling diverse payment methods.

Objective:

This brief explores the evolving travel landscape, specifically focusing on the challenges and strategies adopted by direct suppliers such as airlines and hotels as they compete with OTAs for consumer attention and spending. It leverages insights from a recent conversation between Worldline’s Consulting Services Global Head of Travel Solutions Laurie Gablehouse and PYMNTS CEO Karen Webster, which underscores the importance of payment solutions and explores how the rise of self-service models and advanced technology-driven services are shaping the future of the travel industry.

Key Takeaways:

Self-Service Model: Suppliers are embracing self-service models, where they function as de facto travel agents, providing consumers with customized travel experiences and seamless payments.

Keeping Things Simple: Regardless of payment strategy, offering consumers a simple, frictionless experience can make a significant difference.

Advanced Technologies: Blockchain, generative AI, and biometrics are transforming the payment experience, enabling enhanced proximity-based services, tailored choices, and upgraded travel services.

Building Brand Trust: To attract consumers away from intermediaries, direct suppliers must focus on building brand reputation and trust, while delivering seamless payment experiences.

1. Shifting Dynamics:

Payments have evolved into an integral component of the customer experience.

The rise of self-service models empowers brands to function as de facto travel agents, enhancing control over the consumer experience and payment process.

Embracing diverse payment acceptance methods allows consumers to customize their trips, redeem rewards, and manage expenses seamlessly.

2. Simplicity and Seamless Booking:

Simplicity is a fundamental principle underlying successful payments strategies.

A frictionless process is imperative, whether booking is conducted through laptops, smartphones, or digital wallets like PayPal, Apple Pay, or WeChat Pay.

A unified user experience ensures ease of use and encourages conversion.

3. Technological Advancements:

Advanced technologies like blockchain, AI, and biometrics are reshaping the travel industry’s payment landscape.

Blockchain facilitates secure B2B payments, while generative AI refines customer choices during booking.

Biometrics and AI-powered proximity sensing offer opportunities to enhance service offerings during travel.

4. Evolving Payment Landscape:

The shift towards flexible payments extends beyond geographical boundaries, with installment options gaining traction globally.

Implementing installment plans requires addressing credit checks, regulatory differences, and tax considerations. These will be key to maintaining a consistent user experience across regions.

Conclusion:

Direct suppliers are seeking to redirect consumer business away from OTAs to achieve cost savings and capture market share post-pandemic. To drive competitive differentiation, building consumer trust, simplifying and delivering seamless payment experiences, and offering unique services will play a critical role. Moreover, establishing a robust payments strategy, embracing self-service models and innovative technologies such as blockchain, generative AI, and biometrics will help ensure direct suppliers’ success in a dynamic and competitive online travel landscape.