Travel's hurting, but payments tech can help its recovery
COVID-19 has undoubtedly forced the travel industry to face its biggest challenge in modern times. Most businesses in the industry, particularly those based in Europe and America, are still heading into the eye of the storm, beginning to see the long-term impacts of lockdown measures on their businesses.
World Travel and Trade estimates that 100 million tourism jobs are on the line, with travel companies set to lose billions of dollars. This is impacting nearly one-third of an industry that employs over 330 million people. Airbus most recently issued a significant cash-flow warning, while Virgin Airlines is claimed to be on the brink of collapse as it begs for a government bailout in the UK, having already gone into temporary administration in Australia, painting a worrying picture.
Despite being almost halfway into the year, we’re still only in phase one of this global pandemic. I believe the ultimate judges of our “corona-progress” are the medical experts; and while we don’t know when the end of this current phase will be, what we can do is learn from markets in Asia that are beginning to experience green shoots, preparing for recovery and seeing their volume begin to increase for the first time since the crisis. What we’re learning from them is that agility and increased security are important values for customers.
In order to help those in the travel sector get back up and running, when the time is right, it is key we start a conversation around the relationship between travel companies and payments in the post-COVID world – how can the payments sector help the travel industry re-emerge post COVID-19?
Economies that depend on visitors are struggling. Payments will play a crucial role in supporting the travel industry’s key focus in getting customers back to traveling safe, be it by air to a new destination or simply by train to get to the office. Businesses that survive will be challenged to get people to the front door – and will want to make their lives easier by streamlining their payments process. Deploying technology that can do this will be crucial. Payments companies will need to be able to provide a seamless solution that can automate, reduce manual workload and drive efficiencies, so that companies can save money and focus on core business priorities.
If this pandemic has taught businesses and corporations anything, it is the importance of security and de-risking payments systems. COVID-19 has reinforced the important role virtual cards (VCs) can play in the process versus paying suppliers in outdated methods, such as cash, and it’s my prediction that post-COVID-19 VCs will start to become more mainstream. To avoid future fallout, intermediaries and travel companies need to have the systems and tech in place to ensure they can get its money back when something goes wrong. Virtual card use will become more widespread in the industry, as this is a more secure payment method that protects private information and also helps prevent damaging data breaches.
With many travel companies placing increased value in virtual cards payments, it is now time for more suppliers to embrace new forms of payment and by working collaboratively with key partners, will benefit from a more efficient, future-proofed and successful era for travel in 2021. Our best bet of making this happen will be for us all to make decisions when it comes to payments with a long-term view in mind, not just the short-term crisis. Those that can do this well will help the industry recover, while keeping lines of business afloat too.