Can the way you Pay for travel drive innovation in airlines and the industry?
Mar 29, 2017
Last week I enjoyed attending Day 1 of the UATP Airline Distribution Conference in Hong Kong.
Of particular note were 2 presentations. The first by Mr Patrick Diemer, MD of AirPlus International, delved into the massive changes in the travel industry due to changes in regulation, automation, choice and technology in payment types and systems. A key takeaway was the opportunities presented by regulation of governments around the world on the costs in credit card payment. This cost reduction is making the use of credit cards acceptable for many more types of transactions. This in turn is driving investment in integration of payment into many company systems including procurement and finance. The other key takeaway was the rise of many in-app payment capabilities including foreign exchange and transfer. These systems are predominately within social media and chat apps and highlight the rise of alternative payment methods and the industry’s rapid investment to integrate these popular methods.
The second fascinating presentation was the World of the Travel Agent. Delving into the perceived decline of the importance of the agent in booking both business and leisure trips, a panel of corporate travel managers (FCm and Expedia), travel association heads (ARC and ACTE) and the leader of Alibaba’s Fliggy discussed new technologies and how TMC’s and the wider traditional industry infrastructure was remaining relevant, or even thriving.
This discussion ranged quite widely but there were a couple of key messages.
- Asia is a lot more complex than the other large markets of the Americas and Europe with many different providers in the region. Some local providers use completely different technologies to the established companies in the more mature markets. This comment was made by Expedia’s James Marshall as the panel discussed new entrants and effects on competition.
- Less than 5% of all transactions are on credit card. This is in stark contrast to Europe and the America’s where card adoption rates are well into the high 40% for travel and this category enjoys the fastest growth rates.
This lack of usage contrasted to availability of acceptance and highlighted that while the society in Asia rapidly adopts technology for consumer and leisure, their adoption of technology for business travel and corporate use was very slow and impeding efficiency and progress in the industry.
Overall, it was a well attended event and a very direct insight to the challenges and opportunities in the travel industry. Payment featured very heavily and is acknowledged as a real driver of innovation and efficiency for companies and the industry alike.
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