As the world begins to rediscover travel with COVID-19 restrictions lifting, the travel industry has an opportunity to rebuild and renew by harnessing advances in fintech to improve the traveler experience. That’s why Amadeus has created the ‘Travel fintech investment trends’ report, based on research with over 70 senior leaders from large airlines and travel sellers.
What were the finding’s of Amadeus’ survey?
Fintech and payments were viewed as a high priority by 9 out of 10 respondents. 80% of travel businesses stated that in 2022, they plan to match or go beyond 2019 investment. A third of firms plan to match 2019 levels while a significant 50% plan to increase investment.
When questioned more broadly on company-wide investment, 70% plan on investing through 2022 to capture an expected rebound in travel, with only 30% opting for a more conservative strategy. When asked what is driving fintech investment the top objective was ‘improve the traveler experience’, closely followed by ‘increase revenue through payments’.
Respondents were asked to rank their fintech investment priorities for 2022 from a list of 15 options, revealing two groups of priorities – ‘existing’ and ‘emerging’. More firms expect to invest in ‘existing’ capabilities during 2022 with Alternative Payment Methods (61%); Strong Customer Authentication (46%) and Fraud (44%) ranked as the three top priorities.
A second group of ‘emerging’ priorities also scored highly, with Payments in NDC (47%); BNPL (36%); Multi-Currency Pricing (34%) and Chargeback Management (31%) completing the top half of the priority list. Notably, accepting crypto payments was a priority for the fewest number of firms, although 14% do plan to invest in the capability during 2022.
How instrumental is fintech to the travel industry?
David Doctor, Executive Vice President of Payments, Amadeus commented: “Fintech stands out as an area of the travel business where you can provide new value-added services that bring revenue, whilst also improving the traveler experience. That’s why businesses are channeling scarce resources in this direction and Amadeus is investing heavily too. We expect to double the people in our payments team by the end of next year compared to 2021.”
“We see our clients rethinking challenges, like how to manage elevated levels of chargebacks. Whilst also looking to the future, travel brands are embracing innovations like Buy Now Pay Later and Multi-Currency Pricing to deliver a more flexible and transparent digital experience.”
Chargebacks, the formal process when a cardholder disputes a payment, have risen dramatically during the pandemic as more travelers have become aware of the option.
70% of travel businesses saw a significant increase in chargebacks with 30% choosing to increase headcount to manage the additional disputes. A quarter of firms revealed they have been unable to effectively challenge chargebacks due to the volume increase, raising concerns that the cost of chargeback fraud may have risen since the onset of the pandemic.
The research was conducted in Q1 2022 using an online survey that was completed by senior leaders at more than 70 large airlines and travel agencies. 60% of the survey respondents represent travel companies with annual revenue in excess of €1 billion and a further 40% were drawn from companies with annual revenue over €500 million.