Our research breakfast with Travel Weekly and Travolution at The Shard last month fired the opening shot to the launch of our Travel Megatrends 2020 research programme exploring the impact of technology and payments on travel, and their role in delivering a next-generation travel industry.
The conversation centred on three key tenets for success – the need to redefine profitability and develop new business models, the increasing importance of personalisation, and the growing recognition of payments as an important cog in the creation of a smoother buying experience for consumers and driving efficiencies and value for
The conversation was chaired by Lee Hayhurst, editor of Travel Weekly with representatives from Carlson Wagonlit, Citi, Festive Road, ING, Kuoni Travel, Voxel Group, and Ixaris Technologies. Read the key takeaways from the conversation below…
PSD2 and the banning of interchange charges
What is certain is that credit-only, high interchange-focused virtual card programmes are becoming incompatible for travel agencies. Banks, as we very well know, are not exempt from the spate of regulatory measures introduced, forcing banks to change their business models for travel and to partner with new solution providers. Participants around the table were unanimous on the need for traditional travel intermediaries to move their focus towards becoming technology companies and for new entrants (who by default will be technology companies) to exploit and add value to the existing processes and ways of doing business.
With the growing preference of today’s traveller for experience over the accumulation of possessions, there is a real opportunity for travel providers to make better use of data and insights to meet the expectations of next generations. Our experts pointed at the increased blurring of business and leisure with business travellers now looking for the same options that they enjoy as leisure travellers, putting pressure on business travel providers to offer services and apps like Airbnb, Lyft and Uber within a managed service for their corporate customers.
Participants also pointed to the booking/sales window lengthening to the point where it now never closes, with last-minute services, sales and bookings happening even mid-flight. According to Travel
Payments, as highlighted by the experts, are becoming central to the next generation travel marketplace. The problem of travel payments is of course well known – moving money between businesses is clunky, data is poor, payment processes are fragmented and reconciliation costs are high. All agreed that it makes little (or no) sense to have an all-singing, all-dancing system for bookings while payment remains fragmented and light-years removed from the booking experience.
What is becoming increasingly clear is the importance of, what is now widely promoted as ‘invisible payment’. How to achieve this? While blockchain was raised as a potential solution, participants agreed that while travel is still running on the landline (dating from the 19th century) and via fax (from the 20th century), a radical change such as distributed ledger technology will not be fast. Open banking and (near) real-time payment can solve the same problem, with the right will. Technology solutions that can exploit data, improve transaction speeds, at lower cost, will – it is felt – help to drive travel growth and efficiency.