New research reveals that 66% of travel companies are experiencing reduced profit margins due to outdated or complex payment systems, prompting 90% of them to prioritize modernizing their financial operations this year. The report, a collaboration between Airwallex and Skift, highlights how shifting payment preferences and the surge in cross-border transactions are posing challenges to the travel industry.
Jack Zhang, Co-founder and CEO at Airwallex, commented on the findings, stating, “As global travel continues to grow, travel companies increasingly rely on efficient cross-border payments to meet customer expectations. However, our study shows that slow and outdated payment processes are increasing costs, impacting profits in what are already challenging times.”
The survey, conducted in April 2024 across seven global markets, including Australia, China, Hong Kong SAR, Israel, Singapore, the United Kingdom, and the United States, involved 473 travel executives. It focused on payment processes and financial operations in various sectors, from online bookings to tours and destination management.
Rafat Ali, CEO and Founder of Skift, emphasized the importance of unified payment systems in meeting traveler expectations, saying, “Our survey uncovered insights into why unified payment and financial systems are crucial for travel businesses aiming to enhance efficiency and profitability.”
Key findings from the research include:
- Shift in Payment Preferences: There is a noticeable trend towards local payment methods and peer-to-peer apps, alongside traditional credit cards, debit cards, and digital wallets. This shift has been accelerated by the COVID-19 pandemic, particularly in Asia.
- Complexity of Cross-Border Transactions: Almost 40% of travel companies derive half of their revenue from international payments. However, managing diverse market needs, FX fees, and multiple supplier payments across countries presents significant challenges.
- Impact of Inefficient Systems: Outdated payment systems, including multi-currency settlements and operational inefficiencies, are directly affecting organizational efficiency and margins for nearly two-thirds of travel finance executives.
Looking ahead, 90% of travel executives are prioritizing upgrades to payment and financial operations systems, with 80% expressing interest in adopting all-in-one platforms. The full report and recommendations for modernizing financial operations in online travel businesses can be accessed
