Modulr: Travel sector risks being grounded by disconnected payments
The travel sector will be flying high following new research1 finding over half (59%) of consumers across the UK, Germany, France, Spain and the Netherlands rated their experience of booking travel in the last 12 months as good or excellent.
However, the study – conducted by the Payments-as-a-Service platform Modulr – also reveals that price is the most important factor in how people are choosing to book travel in 2022. With a race to the bottom on price not an option for the majority of travel operators, they must look elsewhere to retain and win new customers.
The State of Travel Payments, 2022 study findings suggest travel operators must start with removing hidden inefficiencies from their booking processes. Overwhelmingly (72%), travellers think there’s no excuse for travel brands to have outdated or inefficient payment processes. In fact, the majority of consumers (72%) said they would stop booking with specific brands because of poor payments experiences and refund processes.
With one in four (25%) travellers forced to cancel trips and try to get a refund in the last 12 months, and 36% having to reschedule or postpone a trip, outdated processes that cause friction and stress put consumers off from making bookings. What’s more, three-quarters (75%) of consumers hold travel brands, not payment providers, responsible for poor or frustrating refunds or cancellations.
The report further found that over two-thirds (73%) of consumers reported feeling frustrated and stressed while cancelling a holiday and/or flights or trying to get a refund in the last year. In fact, three-quarters (74%) think travel brands could be doing more to bring trust and certainty into the booking process.
“There’s no excuse to have outdated processes in a post-pandemic world,” says Agustin Fiori, European Sales Director at Modulr. “Travel booking behaviours have changed completely since the start of the pandemic and there’s not going to be a ‘back to normal’. Consumers are shopping around more than before for the best deals and price is the key driver in the majority of bookings. Travel operators have to be able to differentiate themselves in a market where racing to the bottom on price simply isn’t an option for most.
“Given some operators do provide quick and easy refunds and cancellations, it’s even more likely that having inefficient or frustrating payment processes will drive customers away. Clearly, if travel brands want to keep and win new custom post-pandemic, they must remove all hidden inefficiencies, including payments, from their operations.”
When it comes to travel booking behaviours, over two-thirds of consumers are booking closer to the time of travel, to avoid having to cancel or postpone their holidays due to changing Covid-19 restrictions. Nearly half (48%) would now book a three-day city break in Europe a couple of weeks or less before travel. While 49% would book a two week holiday a month or less before travel.
1To pre-register for the full research, please visit here.
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