Mid-Year Review Blog - Travel & Airlines

20 July 2017 - Thomas Helldorff, VP Travel & Airlines, Worldpay

How much have travel payments developed already in 2017 - and what's likely to happen next in the industry? We spoke to our in-house expert to find out.

1. What 3 themes would you use to summarise the first half of 2017?

Mobile, ancillary services and direct distribution. 

Travellers are becoming more likely to search; be inspired and transact for their vacation – all on mobile. Providers are therefore using this strong level of trust on mobile to build and extend their ancillary services offering well into the travel experience after the initial flight or hotel has been booked.

Direct distribution is when airlines,  hotels and other provider aim to distribute content directly to the customers – rather than via online travel and Meta-search engines. This has created a tension which is continues to intensify.

2. Has 2017 lived up to your expectations so far?  Why/why not?

Yes absolutely, we’ve seen healthy growth throughout the industry. We’ve seen that it’s still an ambitious, dynamic industry. Firms in travel and airlines are extremely flexible and reactive – it’s an industry I’m proud to work in.

3. In terms of payments, what do you think have been the major developments so far this year?

Within airports, there have been exciting developments around payments. One of the largest providers of airport infrastucture, SITA, have launched payment facilities which will enable airlines to accept Chip & PIN transactions at shared kiosks and check-in desks. Amadeus have launched a similar infrastructure, supporting their check-in application with secure EMV card payment facilities.

This will mean that travellers will be able to pay at the check-in counter rather than be directed to separate ticket counters for ancillary services, excess baggage or upgrades.

Lastly, on-board retail is going to experience a boom thanks to the roll-out of on-board WiFi. Apart from charging for connectivity service, airlines will be able to offer higher-value items such as watches and cosmetics as well as destination services. As authorisations can be obtained on-line the risk of fraud is reduced. To find out more about our research in the field, take a look at our Seamless Travel pages here.

4. At the start of the year, we highlighted India as the eCommerce rising star. Do you still think it is? Or have things changed?

Absolutely.  Mobile growth in the APAC region is significant and India is certainly leading this charge.

India is seeing a bigger percentage increase than China, but smartphone reach is going up in all markets, according to a recent report by Euromonitor and Criteo. They predict a compound annual growth rate of 62.2% for mobile bookings in India between 2017 and 2020.

5. How do you see IoT impacting payments within the travel and airlines industry?

So this year has been the first time we’ve seen chatbots being deployed in a meaningful way. I have seen quite a few Facebook Messenger launches for selling tickets, flights and destination content. We’re going to see huge growth in this area.

Artificial intelligence and geo-location combined will become even more useful to the consumer. Where a travel agency knows your itinerary,they can offer you  personalised services based on this, they know where you are and can build a picture of your preferences during your trip. And they know your payment profile – enabling payments with a swipe of your finger.

So let’s say you arrive in Heathrow and your provider knows your hotel is a fair distance from you. They can offer a tailored messageoffering you the best travel options to get there.

Another time you are on holiday with your family and you just got to Paris. Your travel agency’s chatbot  could offer you tickets to Euro Disney theme park or other attractions which closely fit your current profile.

Using AI to interact with consumers is going to develop – it’s already here but is increasing right now!

6. Do you think VR/AR will become mainstream this year?  If not – what do you think is preventing it?

We will see VR used most heavily in the inspiration phase of travel. It’s a natural evolution of the pre-booking experience. Once upon a time you used to look in a catalogue, and then you looked online at a video. Now we see this as a potential next step to truly envisage your destination before you pay. 

We surveyed 16,000 people in eight countries to find out more about their opinions on VR and AR within travel - here are the results. 

7. Airline passenger numbers continue to rise – with some estimates claiming last year saw just under 4 billion commercial passengers (double the 2005 volume). Do you see this trend continuing? How can businesses benefit?

Yes! We see generally that one of the first things people like to do when they reach a certain level of disposable income is to travel. We have seen this particularly in APAC . The number of low-cost carriers there has grown a great deal and continues to do so because this category of relatively affluent people is expanding too. 

The growth is fuelled by people who have caught the travel bug, combined with lower and lower fares. People are much more likely to cut budget elsewhere in their lives than giving up travelling. You may not go as far, but you can still fly domestic. That’s the true appeal of travel! The amount of planes being purchased in Asia and China in particular is astonishing, it shows how there’s a real demand for air travel thanks to this ever growing consumer base.

I’m excited to work with our customers as they grow and expand in these markets. We want to help them prosper through an optimised approach to taking and processing payments in those countries. So, 2017 has delivered a lot of development so far – but it looks like there more to come.  Find out more about how we support Travel and Airline customers here.

Find out more about Seamless Travel payments.