Once at the heart of global commerce, the travel industry has experienced major changes due to the COVID-19 pandemic, particularly in payments and financial operations.
of Airwallex and Skift Travel Payments Landscape Report 2024 We analyze these changes and provide key insights into how the travel industry is adapting to the new payments environment.
Changing payment preferences of travel customers
The pandemic has caused major changes in customer behavior, especially in terms of payment methods.
Nearly nine in 10 (89%) travel executives in Singapore have observed a change in customers’ payment preferences since then, according to the report.
This figure is the second highest among the markets surveyed after mainland China, as greater adoption of technology accelerates the shift towards digital and contactless payments.
For the travel industry, this change brings both opportunities and challenges: on the one hand, supporting these new payment methods can increase customer satisfaction and loyalty;
Meanwhile, investments in upgrading payment systems are needed to ensure they are flexible, secure and efficient.
Companies that fail to adapt risk losing competitive advantage and customers in an increasingly digital marketplace.
A surge in cross-border trade
The report also found that cross-border transactions have increased significantly, with over 92% of travel executives in Singapore frequently making payments to suppliers and vendors in foreign currencies.
This places Singapore in third place among the markets surveyed, behind Australia (95%) and Hong Kong (94%).
This trend reflects the global nature of the travel industry, where companies frequently interact with partners and suppliers in different countries.
But the surge in cross-border trade brings its own set of challenges.
Travel executives in Singapore cited three main concerns: reducing card disputes and chargeback fraud (68%), dealing with foreign exchange fluctuations (66%), and managing vendor and supplier payments across multiple countries (66%).
These challenges can create bottlenecks and inefficiencies that ultimately impact your bottom line.
Inefficient payment systems and their impact on profits
Inefficiencies in the current payment system are a major problem for the travel industry.
The report found that 84% of travel industry executives in Singapore believe issues related to payment systems are negatively impacting profit margins, highlighting the vital need for improvement.
An inefficient payments system can cause a variety of problems, including slower transactions, increased errors, and higher operational costs.
For example, dealing with chargebacks and fraud not only results in direct financial loss, but also consumes valuable time and resources.
Similarly, foreign exchange fluctuations, if not properly managed, can create significant financial discrepancies.
These inefficiencies highlight the need for travel companies to invest in more robust and efficient payment solutions.
EU HolidaysAn award-winning travel agency in Singapore has expanded from an original team of five to over 150 employees across three subsidiary offices.
As EU holidays expand, they face rising global payment costs.More tours mean suppliers and tour operators have to pay in different local currencies, which means higher cross-border and exchange fees and reduced profits.
“Airwallex’s global network makes it easy to send and receive international payments. You can avoid cross-border fees by paying overseas suppliers in their local currency, and transfers can sometimes be completed in just one day.”
Alan Ang, director of EU Holidays, said:
(Right) Alan Ang, Director of EU Holidays
The importance of upgrading your finance operations
Recognising these challenges, 95% of travel industry executives in Singapore cited upgrading payment systems and financial operations technology as their top priority over the next 12 months.
This is the highest percentage among all markets surveyed, underscoring a strong determination to tackle inefficiencies in the industry.
The focus on upgrading financial operations technology is understandable: modern payment solutions offer a range of benefits, including faster transaction processing, enhanced security features, better fraud detection, and more efficient currency management.
These improvements can result in significant cost savings, better cash flow management and ultimately higher profit margins.
of Airwallex x Skift Global Travel Report It focuses on the critical challenges facing the travel industry, from changing customer payment preferences to the complexities of cross-border transactions and inefficiencies in current payment systems.
But the report also provides a clear path forward: by prioritizing the upgrading of payment systems and financial operations technology, travel companies can address these challenges while also creating new opportunities for growth and profitability.
As the industry continues to evolve, staying on the cutting edge of payment solutions is essential to staying competitive and maximizing long-term success.
